Andrew Petrozzi’s Post

LS friends, please find link to a short insight piece on trends and tips for navigating mergers and acquisitions (M&A) in the life sciences sector. Deals in the life sciences sector have characteristics not typically seen in more traditional M&A. Deals often involve negotiating around complexities associated with both the unique nature of assets of life sciences companies and the unique industry ecosystem that brings these assets to life. Innovations—be they to drugs or medical equipment—can take years to develop and are not always guaranteed to succeed in the various clinical trial stages. These innovations can also involve multiple stakeholders from academic institutions, hospitals, startups, and established companies, creating a complex web of ownership issues, competing interests, and priorities. #MLLifeSci, #wearemorganlewis, #biotechnology

Exciting news for San Diego's biotech scene! The first half of 2024 has seen an unprecedented surge in venture capital funding, on track to make it the second-highest funding year yet. This growth is a testament to the thriving ecosystem and cutting-edge research institutions in the metro. The recent wave of mergers and acquisitions has created spinoff companies, leading to increased funding and driving innovation in biotechnology, pharmaceuticals, and medical devices. As a result, lab leasing activity has already surpassed one million square feet, indicating strong demand for space. However, it's worth noting that while funding levels remain high, larger rounds and rising costs are increasing capital requirements and burn rates. Will this capital continue to drive innovation and growth? Only time will tell. #SanDiegoBiotech #VCfunding #Innovation #JLL

A May 22, 2024 article by Patrick Sisson in Bisnow entitled, "Is Big Pharma’s Patent Cliff A Launchpad Or Fall-Off For Lab Real Estate?", does a great job of outlining the looming #PatentCliff in #BigPharma and how it is likely to create a #PerfectStorm for investment in mergers & acquisitions in the #LifeSciences sector. While the article is focused on the US market it is a safe bet that Canada will also see a ripple effect. This is why... Mr. Sisson suggests that while the patent cliff will erode profits at global pharma companies it will also push them to look at mergers with and acquisitions of firms and promising startups developing novel treatments to fill their pipelines. For reference, the patent cliff exposure in 2025 is $59B, an additional $50B in both 2026 and 2027 and $70B in 2028. This huge loss in revenue is expected to be a catalyst for acquisitions as Big Pharma companies look to rebuild their diminishing revenue pipelines. If the historic trend between patent cliffs and industry growth remains, it is worth noting the last big patent cliff in 2010 was followed by a decade of relatively stable growth in biotech and lab real estate. Mr. Sisson points out there has been a record level of $1B-plus M&A #biotech deals in 2024 and US biotech stock prices have surged 23% this year. It is also telling that Big Pharma spent 10.7% more on R&D last year than it did in 2023 & nearly 300 pharmaceutical firms are spending at least $100M on R&D this year. So, reading between the lines, my take-away is that we should fasten our seat belts and hit the gas pedal because a perfect storm of opportunity is on the horizon...

Q2 2024 Report from Locust Walk just reached the shores and it provides a lot of interesting insight over the first half of 2024. Biotech market conditions improved in Q2, driven by increased private market activity, while strategic deal making remained limited. The XBI diverged from the S&P 500 in Q2, mainly due to tailwinds in big tech and AI, rather than biotech headwinds. The continued boom in the AI/tech industry suggests a gradual return to biotech. However, conditions in the private and public biotech capital markets have improved substantially in H1 2024, with total deal value exceeding total value in 2023. Public biotech markets have improved but remain challenging for earlier-stage companies with less robust data. Only three new companies went public in Q2 2024, with two raising a concurrent PIPE. Average capital raised ($178M) in Q2 is up over 47% relative to the 2023 quarterly average, highlighting the accessibility of capital for more de-risked later-stage companies with strong data. Venture financing increased from Q1, making the best quarter in since 2021, signaling positive investor sentiment and belief in private investment exit potential. Average round size increased to $126M, with new investor participation in Series B and later deals reaching highest levels seen in the last 12 months. While the improvements in biopharma private and public markets signal a continued positive recovery for H2 2024, the downturn in strategic deal making and reliance on future rate cuts suggest that the biotech recovery will continue to be a gradual process. https://lnkd.in/g63t6Kcq #biotech #biotechfunding #medicalresearch #clinicalresearch #biopharma #licensingdeal #healthcareipo

Dealmaking in the life sciences sector comes with characteristics not typically seen in more traditional mergers and acquisitions (M&A). Deals often involve negotiating around complexities associated with both the unique nature of assets of life sciences companies and the unique industry ecosystem that brings these assets to life. Innovations—be they to drugs or medical equipment—can take years to develop and are not always guaranteed to succeed in the various clinical trial stages. These innovations can also involve multiple stakeholders from academic institutions, hospitals, startups, and established companies, creating a complex web of ownership issues, competing interests, and priorities. Check out this article by my colleague Laurie Burlingame for more information. #mllifesci #wearemorganlewis

It's undeniable that a thaw is occurring in the biotech funding space. While we would like to see more near-term activity, the data supports a strong rebound in mid-2024 and beyond, which will ultimately equate to increased leasing activity. #lifesciNYC #lifescience #labspace #biotech #biotechnology #ipo

Exciting times in the life sciences and health tech sector! Castrén & Snellman is deeply engaged in facilitating impactful deals and supporting innovation-driven ventures. Check out some of our recent cases highlighting our expertise in navigating complex legal matters within this dynamic industry. #LifeSciences #HealthTech #MandA #PrivateEquity #VentureCapital #LegalExpertise

I’ve been watching the upturn in biotech investment and acquisitions in 2024 with interest….is this a “one off” surge or the start of more sustained optimism for the sector? I’m not an investor or market analyst so please don’t read on for robust predictions of the market….but what does very much interest me is which types of biotechs are faring best and worst- and how innovation communications might be able to help. In short, there is a move by investors to safer bets. In 2020 and 2021, a majority of the companies going public were either in preclinical or Phase 1 testing. Now, companies with early, or broad drugmaking technologies are having a tougher time. We are always advising clients to build their innovation narrative as early as possible - and this reiterates the rationale why. Innovation means operating in unchartered territory - but alongside this to build confidence with investors - and all other key stakeholders involved in the journey of scientific and clinical discovery- it’s critical to take the time to educate and articulate the game changing potential of a new scientific field of discovery and the ambition of your biotech, why you could be a “partner of choice”. IPOs are an important indicator of the biotech industry’s health- they are showing signs of life. We all know patients are waiting. We all know we need a hotbed of innovation to flourish in the lifesciences sector to make a genuine difference. We of course all hope this surge in biotech market growth is sustained. What do others think? #strategiccommunications #innovation #biotech #leadership

The growing life sciences and health tech industry saw a significant uptick in deal-making throughout 2023, in contrast to the fluctuating global M&A market. Castrén & Snellman’s recent transactional work vividly reflects this heightened industry activity. In 2023 and 2024, our firm has been deeply immersed in facilitating mergers and acquisitions, securing funding and refinancing and supporting manufacturing projects for innovative companies, investors and entrepreneurs in the health tech and life sciences sphere. With favourable economic conditions driving acquisitions, continued interest from private equity and venture capital firms, and the strategic importance of acquisitions for fostering growth, we anticipate continued vibrancy in the industry through the remainder of 2024. Our recent cases showcase Castrén & Snellman’s expertise in navigating complex legal matters within the industry: – Advising Mérieux Equity Partners’ leveraged buyout of Labquality, a Nordic player specialised in EQA, CRO activities and regulatory affairs, with a strong local presence in Central and Eastern Europe – Advising BYG4Lab and Keensight Capital on BYG4Lab’s acquisition of Finbiosoft, an innovative software company founded in 2011 with a mission to help laboratories reach higher quality and better efficiency – Advising Keensight Capital, a leading growth buyout investor, on the Finnish legal aspects of the combination of Biovian and 3P Biopharmaceuticals, two leading biologics contract development and manufacturing organisations (CDMOs) backed by Keensight Capital, to establish 3PBIOVIAN, a new pan-European leader in its field – Advising DigiTx Partners, a venture capital firm specialised in the digital health space, on the USD 10 million series A funding round of CardioSignal, the developer of the first technology to detect major heart deceases without specialised medical hardware – Advising Inventure, Tesi and Presidio Ventures on the EUR 13.7 million series A funding round of Algorithmiq, a growth company developing quantum computing algorithms and solutions for drug development and discovery – Advising Biovian, a globally operating GMP (Good Manufacturing Practice) contract development and manufacturing organisation (CDMO) of biopharmaceuticals, on its EUR 50 million manufacturing facility project in Turku, Finland – Advising Biovian on the debt refinancing initiative and new funding package with Eurazeo to support organic growth and GeneCity facility expansion – Advising Voisin Consulting Life Sciences on the acquisition of MedEngine, a leading medical science agency in the Nordics. Read more on our website: https://lnkd.in/dpTT-Mmb #LifeSciences #HealthTech

Interesting summary of changing investor perspectives based on lessons learned from 2023. Public investors appear more focused on later stage companies with VC firms making more substantive investments but in fewer companies Preclinical companies are working to control headcount to under 50-100. https://lnkd.in/e4nKksUr Weekly Roundup: BioPharma Dive: Daily Dive 01-13-2024&utm_term=BioPharma Dive Weekender #ipo #strategy #biotech