The biopharma vertical is looking for the correct dose of medicine.
Despite a 24% increase in startup investment quarter-over-quarter in Q3, the landscape remains challenging. IPO opportunities remain stymied, and the regulatory outlook is uncertain with a new US presidential administration.
While nearly every biopharma segment stalled or declined, the chemistry sector witnessed growth in Q3, with deal value increasing 39% over Q2. The segment, which includes the development and research of traditional small-molecule drugs, has routinely led the way in biopharma funding.
The market map below provides an overview of where capital is going throughout the vertical and highlights the chemistry segment. Explore the sector by clicking on the teal tile.
To go deeper, read PitchBook’s Q3 2024 Biopharma Report. PitchBook subscribers can also explore the full market map with more than 3,300 companies.
Spotlight: Chemistry
PitchBook analysts have broken down the chemistry segment into three categories:
Small molecules: Startups within this concentration focus on researching and developing low-molecular-weight compounds, which are the basis for most pharmaceuticals in the market.
Degraders: A novel form of molecular therapies; companies operating in this category research and develop ways to recruit the body’s own protein degradation systems to attack harmful pathogens.
Radiopharma: Compounds that are created using radioactive isotypes; startups working within this field typically focus on therapeutic agents for cancer and diagnostic imaging.
Biopharma VC investment totaled $7.2 billion from 187 deals in Q3, up from $5.8 billion across 176 deals in Q2. The chemistry segment received $3.2 billion, up from $2.3 billion in Q2. Deal count remained mostly flat, with 79 deals recorded in Q3.
Notable deals include SiteOne Therapeutics, a developer of chronic pain treatment drugs, raising a $100 million Series C in December led by Novo Holdings. Also in December, Angitia Biopharmaceuticals raised a $120 million Series C led by Bain Capital Life Sciences for its musculoskeletal disease treatments.
Unlike much of the broader environment, exits in biopharma have been on the rise. As of Q3, exit value had surpassed last year’s total figure, up 21.6% to $24.7 billion. The chemistry segment has accounted for half of all exit value in 2024, generating $12.15 billion and surpassing last year’s total.
Key exits include Boehringer Ingelheim’s $1.3 billion acquisition of Nerio Therapeutics, a small-molecule drug discovery startup focusing on cancer treatment, in July 2024. Amolyt Pharma, a drug therapy startup tackling endocrine diseases, was purchased by AstraZeneca for $1.05 billion, also in July.
IPOs have been far and few between for biopharma, though some companies have gone public. Septerna, a small-molecule drug discovery company, went public on the NASDAQ in October. Earlier that month BioAge Labs, a metabolic diseases research and treatment startup, also went public, listing on the NASDAQ as well.
Featured image by Jenna O’Malley/PitchBook News
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