Each quarter, Locust Walk deal team members compile key statistics and trends on strategic transactions and financings. Our 2021 Q2 Report: Global Trends in Biopharma Transactions applies the latest data to analyze current activities in the life sciences deal landscape.

A few more key insights across geographies in Q2 2021:

United States

• Biotech indices recovered from their tumble in Q1, tracking with the 8.2% gains of the benchmark S&P 500 this quarter
• While still healthy by historic standards, the US biopharma IPO momentum in the first quarter of 2021 slowed in Q2 2021 with lower aggregate deal value and deal volume
• The healthcare SPAC IPO boom of Q1 2021 lost momentum in Q2 in light of accounting guidance set by the SEC at the start of the quarter and other headwinds to new SPAC offerings
• Public and private financing activity remains robust as earlier-stage companies seek to take advantage of growing interest from private investors
• 2019 and 2020 biopharma IPOs underperformed the major biotech indices this quarter
• Strong deal flow among licensing deals demonstrated sustained interest in strategic licensing transactions while the dramatic drop in M&A deal activity reveals that the market has shifted away from acquisitions this quarter

Europe

• Private financings set a record again in Q2 with over $1.6B in private funding, a 19% increase over the previous record set in Q1 2021
• Public financings slowed down slightly in Q2 after picking up a lot of speed in Q1 2021. In total, six IPOs and two secondary offerings continue to indicate a strong demand for innovation made in Europe. Not surprisingly Nasdaq IPOs were larger than IPOs in Europe.
• European M&A activity saw a rebound with 5 completed transactions and total deal value back towards levels seen in Q3 or Q4 2020
• Importantly Q2 EU biopharma licensing agreements surpassed $7.8B in aggregate value, nearly doubling the total from Q1 2021. The impressive deal activity in this quarter was unsurprisingly driven by a strong focus on immuno-oncology, but there was also a resurgence in “unpopular” areas, such as cardiopulmonary diseases. Together, these two therapeutic areas accounted for over half of the closed licensing transactions

Japan

• The Japanese stock market was down -2.6% in Q2 2021 with noticeable drops in mid-May and mid-June in 2021 due to concerns about the rise in US interest rates
• The pharma and biotech sector in Q2 2021 fell -5% and -3.6%, respectively, and overall growth of the two sectors since the beginning of 2020 is performing below market
• The volume of deals in Q2 2021 was fewer than 2020 but with similar aggregate deal value, which was largely due to a strong out-licensing quarter led by Eisai and Kyowa Kirin’s deals with over $1B in total deal size
• Following a strong quarter in venture financing in Q1 2021, the trend continues in Q2 which featured 9 deals with aggregate value of $87M

China

• After a slow start for the Chinese stock market in Q1 2021, Q2 recovered as the SSE Composite Index was up 4% and average share price of top Chinese pharma companies was up 13.3%
• In-licensing deal volume in Q2 2021 is similar as Q2 the previous year, but with larger value: 16 in-licensing deals closed including 11 deals with over $50M in total deal size and 12 with over $5M upfront payment
• Out-licensing activity was slow in Q2, with only 1 deal over $100M
• Venture financing for biotech companies continue to exceed previous levels, as 45 companies raised capital for an aggregate total of $2.7B in Q2 alone