USA Trends and Developments Contributed by: David McIntosh, Matt Byron, Ryan Kramer, Sabrina Kim and Zoe Dettelbach, Ropes & Gray LLP
Opportunities and Complexities Shaping the US Life Sciences Landscape The US life sciences industry experienced a dynamic year in 2024. As the public markets gained traction, IPO activity and venture invest- ment saw a resurgence, signalling renewed investor confidence and reflecting sustained interest in biotech innovation. However, the M&A market presented a mixed picture, with overall deal values declining but deal volumes remain- ing robust. Licensing deals, particularly those involving biologics, later-stage assets, gluca- gon-like peptide-1 (GLP-1)-targeted therapies and glucose-dependent insulinotropic polypep- tide (GIP)-targeted therapies, continued to play a crucial role in shaping the industry landscape. This article delves into the key trends in the sector in 2024 and offers insights into what lies ahead for 2025, given driving trends and the new The public financing markets gained modest traction in 2024, allowing for a steady resur- gence for the life sciences industry. The US bio- tech stock average, as measured by the S&P XBI, was generally volatile during the course of 2024 but ended the year modestly higher than it began. IPO activity also saw a significant uptick, with USD3.8 billion raised by 19 compa- nies going public in 2024 (compared to USD2.7 billion from 13 IPOs in 2023), according to JP Morgan. administration. Market trends The largest IPO occurred early in the year, set- ting high expectations, when CG Oncology raised USD380 million in January. Later in the year, there were signals of continued investor confidence when Bicara Therapeutics, Zena BioPharma, and MBX Biosciences collectively raised more than USD700 million during a sin- gle day in September. According to Stifel , bio -
tech and healthcare IPOs accounted for 23% of total US IPO proceeds in 2024, indicating a renewed interest by investors in the sector. However, many of these companies experi- enced significant declines in their share price following the IPO. Similarly, follow-on offerings began strong in 2024, but tapered off as the year progressed. While the strong start to 2024 was not sustained throughout the year, the authors still view the public follow-on market as trending upwards, with annualised follow-on value reach- ing USD52 billion in 2024, compared to USD36 billion in 2023 and a historic peak of USD86 bil- lion in 2020. Commentators expect this positive trend to continue into 2025, but certainly not to the extent of the peak levels seen during the COVID-19 boom. Venture equity investment in the life sciences sector experienced a significant surge in 2024. According to Stifel, annualised venture equity deals in the sector totalled more than USD50 billion – a significant increase from USD33 billion in 2023. Notable deals included Xaira Therapeu- tics raising more than USD1 billion in April in a Series A round, reflecting sustained interest in AI for drug discovery, and Mirador Therapeutics securing USD400 million in a Series A round for precision medicine. Overall, 2024 was the third- most active year for biotech fundraising in his- tory, based on aggregate deal value. Series A and Series B venture financing in biotech com- panies also saw a substantial increase in 2024, but with a notable focus on certain “hot” assets, as well as a flight away from certain other asset classes (including expensive-to-develop cell therapy treatments). In 2025, analysts expect an overall increase in venture capital volume, with the trend towards larger funding rounds and the continued incur- sion of tech venture capitalists into healthcare,
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