Each quarter our team at Locust Walk compiles key statistics and trends on strategic transactions and financings. Our 2020 Year End Report: Global Trends in Biopharma Transactions applies the latest data to analyze current activities in the life science deal landscape.

2020 turned out to be a record year for financings across the globe, in the US, Europe and Asia alike. Will the treasure chest of private capital begin to run low or stack higher in the new year? Perhaps we’ll see an increase in licensing transactions or M&A as capital is put to work and begins to bear fruit. We look forward to following the trend lines in Q1 2021.

A few more key insights across geographies from 2020:

United States

• Approval of two COVID-19 vaccines led biopharma indices and the S&P 500 to finish the year in an upswing
• The healthy domestic biopharma IPO landscape established 2020 as a record year for deal value, with SPAC exchange listings and SPAC IPO aggregate deal value also reaching record highs
• Public and private financing activity remains notably robust, as companies seek to take advantage of the open IPO window and positive industry perceptions from investors
• Private financings in Q4 closed out the strongest year on record, and 2019/2020 biopharma IPOs continue to perform well in the public markets, suggesting investors are bullish long-term on new biopharma opportunities
• M&A activity has lacked the ‘mega deals’ of prior years, but strong deal flow among licensing deals and a spike in M&A deal volume in Q4 demonstrate sustained interest in strategic transactions

Europe

• European biotech financings set a historical record this year with no signs of slowing, considering Q4 had the highest volume to date
• Financings in Europe were weighted more heavily towards earlier stage investments in Q4 as in the robust market environment investors are willing to infuse capital into more risky, earlier stage rounds
• Despite the high influx of capital into private markets, the public European biopharma markets slowed with only one IPO in Q4 2020
• The total value of M&A deals increased significantly in Q4 and is expected to continue gaining momentum through 2021 as a few large deals have already been announced

Japan

• Another strong year in licensing, led by Daiichi Sankyo’s second ADC deal with AstraZeneca in a row. Number of deals with over $10M in deal value was 31 (1 less from 2019) but aggregate deal value was up 5% from 2019
• More noticeable in 2020 was the volume and total size of venture financing (24 deals and $159M, respectively) which vastly surpassed the previous record set in 2018 (14 deals and $114M, respectively)

China

• China continues its torrid pace of in-licensing deals (75 in 2020, up 7% from 2019) and features transactions with substantial size, including 6 deals with upfront payment of $30M and above.
• New drug candidates by Chinese companies are starting to be recognized, as there were 13 out-licensing deals announced, many with major pharma companies such as Abbvie, Bayer, Eli Lilly and Pfizer
• Financing in biotech benefitted from the growing interest in health care due to emergence of COVID-19, as 28 companies went public and venture investment volume and aggregate venture investment amount far exceed past results​