Bio/Pharma Financing and Drug Approvals Bounce Back in 2017
The bio/pharma sector enjoyed a healthy first half of the year, as several key metrics rebounded strongly from a disappointing 2016. The sector raised $18.1 billion in the first six months of the year, more than double the figure seen for the same period last year, although 12% lower than the record amount recorded in 2015 (see Figure 1, below).
The first half of 2017 also saw 17 companies completing IPOs to raise a total of $1.2 billion, 45% more than the same period in 2016, but down compared to 2014 and 2015. Secondary fundraising (SPO) more than tripled to $13.4 billion, just shy of the record $14.3 billion raised in 2015. The average IPO and SPO increased to $70 million and $90 million, respectively, in the first half of the year, up from $55.1 million and $55 million in 2016, providing still more evidence of the ready availability of capital.
Contributing to the positive backdrop, the Arca Biotech Index of emerging bio/pharma companies rose by nearly 20% in the first six months of 2017. The one sour note was a 19% decline seen in venture capital (VC) from $4.3 billion in 2016 to $3.5 billion in 2017. While average VC funding remained steady at $25 million per round, just 143 rounds were recorded in the first half of the current year; 168 rounds were recorded in 2016 and 190 in 2015.
This article is reprinted from the July issue of Bio/Pharmaceutical Outsourcing Report. The full article addresses the increase in NME approvals and what it means for the industry. To learn more, click here.