Investment rounds and fundraising will likely take longer given the crowded landscape of companies wanting to raise funds, say investors. “Most investors have a big stack of funds to look at, and more things to look at than they have time,” said Robert Balfour PhD, an investment director at Alsa Ventures.
At the ongoing Advanced Therapies 2024 conference, being held 19-20 March in London, experts at an investor-focused panel discussed the current state of early-stage investment in biotech and pharma. Balfour explained that previously, upon receiving an email from a company seeking investment, he would be able to respond within two to three weeks. But now the waiting time has been extended as investors lack bandwidth. “There has been a downturn in the market as a lot of companies are fundraising, so every investor has a lot of choice,” he added.
In order to stand out, “The first thing I want to see is science,” said Paola Pozzi, a partner at Soffinova Partners. She explained that with a stronger science-backed platform, early-stage companies improve the chances of increasing the values of their initial public offerings (IPOs), which is even more important in a “poor biotech ecosystem”.
Apart from the science, Dominic O’Regan an investor at the life sciences consultancy New Mosaic, declared that at the early stages, it is important for biotechs to establish where its assets may fit within specific indications and show clarity on where they may fit in the landscape in the next three to four years.
GlobalData reports that private biotech venture financing dipped in 2023, showing a reduction of 43.2% when compared to 2022, and a 52.3% drop in comparison to 2021. This amongst other factors saw several pharmaceutical companies cut down operations to fund their lead assets. For example, Neximmune removed over half of its staff in September and Kinnate Biopharma followed, laying off 70% of its workforce, in the same month.
GlobalData is the parent company of Pharmaceutical Technology.
Despite the previously difficult funding environment, GlobalData predicts that there may be a shift in investor sentiment. In GlobalData’s Thematic Intelligence report, “The State of the Biopharmaceutical Industry 2024,” the company found that 44% of healthcare professionals surveyed globally are optimistic or very optimistic about biotech funding recovery in the next 12 months.
