Bio/Pharma Financing and Drug Approvals Bounce Back in 2017

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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.

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Saul is PharmSource’s Director of Market Intelligence. He brings over 15 years of experience in market analysis, having worked in business intelligence roles at Evaluate Pharma, Cardinal Health (now Catalent) and Abbott Laboratories. Prior to that, he was a Post-doctoral fellow in Neuropharmacology at the Universities of Birmingham and Bristol.  Saul holds an MSc (Neuroscience) from the Institute of Psychiatry (King’s College London) and a D.Phil in Neuropharmacology from the University of Oxford.

More posts by Saul Richmond