Biotech financing: darkest before the dawn

After a difficult three years, biotech financing may slowly be returning to health.

August 8, 2024 | By Melanie Senior

“It was the best of times, it was the worst of times,” wrote Charles Dickens in A Tale of Two Cities. The same might be said for biotech financing today.

On the plus side: flourishing innovation, robust mergers and acquisitions (M&A) activity, and average private biotech funding round sizes at a 15-year high (Fig. 1) On the downside: stubbornly muted public markets and cautious, choosy venture capitalists (VCs) struggling to raise their own new funds in “the worst [environment] I have ever seen” for VC fundraising, according to Antoine Papiernik, chairman and managing partner at Sofinnova. Most biotechs are stuck in a deep, long-lasting downcycle.