Pharmatech Report

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Research & clinical-focused service deals continue to grow in pharmatech

Contract research organizations (CROs), companies that provide research and clinical services to pharma and biotech clients, are finding success in an otherwise stagnant pharmatech dealmaking   landscape.

Despite relatively flat dealmaking overall in Q2 2024, CROs received $953.2 million across 35 deals driven by advancements in needs for next-generation therapeutics development and adoption of AI and precision medicine in clinical trials, according to our latest Emerging Tech Research report.

Key takeaways

• VC Funding: Deal value was up from $1.0 billion in Q1 to $1.1 billion in Q2, but deal count was down from 65 to 48, indicating a focus on larger but fewer deals.
   
• Notable deal: Formation Bio's Series D of $372.0 million was the largest deal, showing confidence in late-stage companies.
   
• Exit activity: Exits are slow, but Tempus AI's recent IPO might signal a potential uptick for other startups.
   
• Private equity: Activity in pharmatech continues to decline from 2021 highs, with 21 buyout deals and nine growth-equity deals in 2024.
   
• CRO market growth: In Q2 2024, CRO saw $953.2 million invested across 35 deals, CDMO had $44.4 million across four deals, and CMO had $150.6 million across nine deals.
   
• Investment focus: AI, precision medicine, cell and gene therapy contract services, and tools for next-generation medicine development are attracting investments.
   
• Companies to watch: Unlearn (digital twins and machine learning for clinical trials) and AmplifyBio (cell and gene therapy development services) align with emerging trends.