To call 2020 a “unique year” for life sciences companies would be an understatement. The COVID-19 pandemic transformed the industry, creating immense opportunities for institutions and investors to drive healthcare through innovation.
Peter Meath, Co-Head of Healthcare and Life Sciences for Commercial Banking, notes that investment in life sciences reached record-high levels across almost every category and subsector—despite unprecedented business challenges. Here are a few of the highlights:
Mega rounds—VC funding in excess of $100 million—continued to increase across biopharma, medical technology, and tools and diagnostics. Meath says the “go big” trend of larger fund sizes, i.e., mega funds, could continue to play a larger role in the funding ecosystem as well.
Activity within life sciences subsectors evolved as investors adjusted to the ebb and flow of the economic and business landscape during the pandemic.
“Biopharma notably had a banner year, and we’ve seen some interesting moves in tools and diagnostics, pharma services and healthcare IT funding, not just among our clients, but in the industry overall,” Meath says.
Take a deeper dive into these subsectors along with the DealForma data below.
Biopharma continues to dominate the industry landscape in terms of dollars invested and number of funding rounds. Investors are indicating record-high levels of innovation at a faster pace than before the pandemic.
The diagnostic space continues to take in new capital from tech investors who have only recently emerged on the life sciences scene. Meath says this is due, in part, to a growing crossover subsector that uses data, AI and machine learning in combination with diagnostic tools to better drive value delivery and clinical outcomes.
COVID-19 has made the public, the market and investors rethink the pharma supply chain and its capacity to solve fast-moving problems.
The healthcare IT space expanded rapidly last year as telehealth visits and other forms of virtual healthcare skyrocketed, setting the stage for continued growth and innovation in 2021.
If there was one soft spot in life sciences investment in the latter half of 2020, it was in the medical devices space. Demand for medical devices—and funding—likely dipped, Meath says, due to patients delaying elective procedures to reduce COVID-19 exposure, coupled with the pandemic’s strain on healthcare systems.
Meath says the major question for this space is: “How long will COVID-specific moves last and how will their value be created and retained long term?”
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DealForma, data as of 1/7/2021. Healthcare and Life Sciences sector coverage across biopharma, medtech, device, diagnostics, tools, CDMOs, and related companies. Financials based on disclosed figures. M&A are for whole company acquisitions (or majority acquisitions) and not product, pipeline, or business unit purchases. Excludes terminated offers. Partnerships involving development and commercialization, joint ventures, options to license, partnerships with an option to acquire the company, and research partnerships. Excludes regional sales/distribution only and academic/government deals.
Source: DealForma, data as of 1/7/2021. Healthcare and Life Sciences sector coverage across biopharma, medtech, device, diagnostics, tools, CDMOs, and related companies. Financials based on disclosed figures. Multiple tranches of the same Series are counted as one together.
Source: DealForma, data as of 1/7/2021. Biopharma companies developing therapeutics and technology platforms engaged in drug discovery, clinical R&D, and commercialization. Financials based on disclosed figures. Multiple tranches of the same Series are counted as one together
Source: DealForma, data as of 1/7/2021. Companies developing diagnostics, biomarkers, lab based assays, and research technologies. Financials based on disclosed figures. Multiple tranches of the same Series are counted as one together.
Source: DealForma, data as of 1/7/2021. Companies developing medical technologies, therapeutic devices, digital health therapeutics, and wearables with a clinical diagnostic or therapeutic focus. Financials based on disclosed figures. Multiple tranches of the same Series are counted as one together.
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