2024 shaping up to be a strong year for
biopharma
SAN
FRANCISCO, Aug. 7, 2024 /PRNewswire/ -- In the
first half of 2024, 89% of US venture capital (VC) funds at or
above $25M hit their fundraising
targets, marking the second-highest rate in history, according
to the latest report from Silicon Valley Bank (SVB), a
division of First Citizens Bank. The 2024 report also found that
the biopharma sector could be on track for a record-setting year
after reaching high investment levels, particularly in larger
deals, with 55 biopharma companies securing deals of $100M or more.
Leveraging 20 years of research and proprietary data analysis on
healthcare venture trends, SVB's 2024 Mid-Year Healthcare
Investments and Exits Report analyzes venture capital
investing, fundraising and exit activity across the healthcare
sector.
The latest report found that VC fundraising in the first half of
the year has found its footing, with fundraising forming a new
baseline of just under an estimated $20B raised per year. As valuations remain under
increased scrutiny, more than 1 in 4 of US healthcare companies
that closed a venture capital deal of at least $15M in 2024 reported a flat or down round,
according to SVB.
"Companies are still working to achieve growth that matches high
pandemic-era valuations," said Jackie
Spencer, Head of Relationship Management for Life Science
and Healthcare Banking at Silicon Valley Bank and author of the
report. "While each sector has its own story to tell, it's clear
that 2024 activity shows investment in life sciences and healthcare
is finding a path forward despite headwinds. With a continued focus
on prioritizing profitability over growth and rationalizing
valuations, we expect healthy and sustainable investment for the
second half of the year."
SVB's mid-year report also provides in-depth analysis for
sectors across healthcare including biopharma, healthtech, medical
device, diagnostics/tools (dx/tools).
Key Findings:
- Biopharma: Private investment in biopharma had a strong
start to the year, with H1 2024 being the largest half for Series A
biopharma investing since H1 2021. Investment in rare disease
companies ($508M in H1 2024) is on
pace to improve from 2023, but still falls behind the dollars
raised pre-pandemic ($2.1B in
2019).
- Healthtech: H1 of 2024 was the second strongest half for
Series A healthtech investment since 2021. For later-stage
companies, those that received lofty valuations during the height
of the pandemic healthtech bubble generally appear to have fallen
into a valuation trap.
- Medical Device: Fundraising to finance a pivotal study
for regulatory approval is trending, and some companies have
already gained capital due to business performance and
acquisitions.
- Dx/Tools: While it's been a challenging year raising
capital for DX/Tools, investors are aiming to reduce the risks
associated with innovation that drives value creation, seeking
solutions that define new categories.
- 2024 could finish on an upswing heading into next year,
dependent on sectors capable of spurring market-wide momentum in
the broader industry. These focus areas include healthcare
companies landing mega deals ($100M+), leveraging AI, and
performing well in the public markets.
Learn More
Read the complete 2024 Mid-Year Healthcare Investments and Exits
report here: Healthcare Investments and Exits Mid-Year Report |
Silicon Valley Bank (svb.com)
SVB is a leader in providing market insights on sectors across
the innovation economy. For the complete library of SVB's signature
reports, please visit Market Research Industry Trends &
Insights | Silicon Valley Bank (svb.com)
About Silicon Valley Bank
Silicon Valley Bank (SVB), a division of First Citizens Bank, is
the bank of some of the world's most innovative companies and
investors. SVB provides commercial and private banking to
individuals and companies in the technology, life science and
healthcare, private equity, venture capital, and premium wine
industries. SVB operates in centers of innovation throughout
the United States, serving the
unique needs of its dynamic clients with deep sector expertise,
insights, and connections. SVB's parent company, First Citizens
BancShares, Inc. (NASDAQ: FCNCA), is a top 20 U.S. financial
institution with more than $200
billion in assets. First Citizens Bank, Member FDIC. Learn
more at svb.com.
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SOURCE Silicon Valley Bank