Pharma Fundraising Surge Presents Investor Dilemma

At the Advanced Therapies 2024 conference, held on 19-20 March in London, a panel of experts on investors discussed the current scenario of early-stage investment in biotech and pharma.

As per Balfour, the waiting time for responding to an email from a company seeking investment has increased. Earlier, the response time was two to three weeks, but now investors lack bandwidth. Due to a downturn in the market, many companies are fundraising, and thus, every investor has a lot of options to choose from.

To stand out, Paola Pozzi, a partner at Soffinova Partners, stated that a strong science-backed platform is the first thing investors look for. Early-stage companies with a sound science-backed platform have a higher chance of increasing the value of their initial public offerings (IPOs), especially in a "poor biotech ecosystem."

Dominic O’Regan, an investor at the life sciences consultancy New Mosaic, emphasized that during the early stages, biotech companies must determine where their assets fit within specific indications and show clarity on where they may fit in the landscape in the next three to four years.

According to GlobalData, private biotech venture financing was reduced by 43.2% in 2023 compared to 2022, and there was a 52.3% drop in 2021. As a result, several pharmaceutical companies reduced operations to fund their lead assets. 

For instance, Neximmune laid off over half of its staff in September, and Kinnate Biopharma followed suit by laying off 70% of its workforce.