Investor confidence may be returning, with biopharma venture funding, deal value and exit activity all rising in 2024’s third quarter compared to the second.
The uptick could also reflect normal quarterly fluctuations amid current macroeconomic challenges, according to PitchBook’s third quarter biopharma report published Nov. 20.
In the third quarter, biopharma brought in $7.2 billion across 187 deals, jumping from $5.8 billion across 176 deals in 2024’s second quarter, according to the report.
Megarounds primarily drove the funding increase, with larger VCs behind most of the high-value deals and growing competition for smaller firms backing founder-friendly seed rounds. Financings of particular note include antibody-focused Candid Therapeutics’ $370 million series B and radiopharma biotech Aktis Oncology’s $175 million series B.
Biopharma’s total exit activity value hit $9.7 billion across 23 deals in the third quarter compared to $5 billion across 14 deals in the quarter before. Of note are IPOs from autoimmune disease-focused Zenas BioPharma and obesity biotech BioAge.
When looking at M&A, Merck & Co.’s $3 billion acquisition of EyeBio sticks out, plus Boehringer Ingelheim’s $1.3 billion buyout of Nerio Therapeutics and AstraZeneca’s $1.1 billion Amolyt Pharma purchase. All three of the deals emphasize Big Pharma’s aim to boost specific or specialized offerings amid broader market uncertainty.
While the data suggest improvement, the venture landscape is still a challenging one, according to PitchBook. This is largely due to larger market uncertainties like the BIOSECURE Act, the Inflation Reduction Act and Donald Trump’s upcoming presidency.
Looking at the remainder of the year, the market for biopharma deal activity appears steady and may represent the industry’s “new norm,” according to PitchBook. M&A and IPO activity are “likely to remain robust,” with the data analyst citing last year’s trends and the need for exits to return capital.
As the fourth quarter nears a close, VC deal activities may face a drop-off in anticipation of the annual J.P. Morgan Healthcare Conference held in January. Attending companies often wait to share big news until the meeting starts.