However, COVID-19 has brought its fair share of challenges, especially for the pharmaceutical sector. Will this impact capital investment?
In part two of our life sciences investment blog series, we’re looking at the state of investment in pharma and examining what the future might hold.
The 2020 pharma investment scene
2020 has been both a challenging and exciting year for the pharma sector.
COVID-19 thrust pharmaceuticals onto the centre stage and demonstrated the importance of the industry to a global audience. As big and small pharma companies battled to develop the first COVID-19 vaccine and treatments, rising share prices and company valuations followed. For example, Pfizer shares rose 9% after preliminary analysis of its coronavirus vaccine indicated 90% effectiveness.
However, 2020 has been a challenging year for the sector too. Social distancing and lockdown measures resulted in fewer doctor visits, delays to new treatments, cancellation of routine operations and delays to hundreds of clinical trials. In June, 976 organisations reported specific disruption to clinical trials in the public domain, and in April, the number of visitors to ambulatory care decreased by 60% - wiping $7.85 billion off biopharma sales forecasts for 2020 in the process.
Despite these challenges, the pharma sector has flourished in 2020, allowing companies to forecast positive sale increases and raise considerable investment. Notable achievements include:
Notable pharma investments in 2020
There were many pharmaceutical investments in 2020, some of the most notable being:
Germany-based CureVac closed a $640 million private financing round in July. The mRNA technology platform aims to optimise the properties of mRNA medicines based on protein design, RNA optimisation and mRNA delivery. The technology could provide vaccines for infectious diseases, such as Rabies, and immunotherapies for cancer treatment.
Full-service digital pharmacy, Medly Pharmacy, closed a $100 million Series B funding round in July. The three-year-old company has quickly become one of the leading digital pharmacies, growing 100 times in revenue since its inception. Medley will use the investment to continue expanding its platform, enter new markets and meet new customer needs.
San Diego-based Autobahn Therapeutics raised $76 million in Series B financing this June. The regenerative medicines developer is using the funds to advance a thyroid hormone receptor beta agonist therapy to treat MS and AMN, and for a portfolio of transformational CNS programs leveraging its brain-targeting chemistry platform.
Perhaps most notable was the billions of government money invested into pharma companies in the fight against COVID-19. AstraZeneca ($1.2bn), J&J ($1.5bn), Moderna ($2bn), Novavax ($1.6bn), Pfizer ($1.95bn) and Sanofi/GSK ($2bn) all received funding from the US government’s Operation Warp Speed, through purchase agreements and early stage investments.
The future of pharma investments
What are the future challenges for the pharmaceutical industry in securing investment in 2021 and beyond?
Advancement of drugs will invariably be delayed because of COVID resource constraints, supply chain disruptions, local lockdowns, delayed trials and delayed regulatory decisions. For example, last month FDA delayed a decision on Spectrum Pharma's drug candidate due to COVID-19 travel curbs. This could have a temporary disruptive impact on other therapeutic areas and smaller pharma companies, making investors less willing to invest.
Large pharma companies are under increasing pressure to cut costs and reduce drug prices, especially following the Presidential election. ACA reforms and lower drug prices are a big topic, and investors will turn their interest to the pharma companies that can offer competitive pricing while maintaining profits through increased efficiencies. For example, Amgen’s R&D group now has efficiency as its prime focus because of escalating drug cost concerns.
Investors in the US and Japan historically use the UK to access the broader European market, which is why pharma companies currently invest 16% of their European R&D budget into the UK. However, Brexit may make the UK less attractive to investors and for R&D spend. This year, Cambridge-based AstraZeneca announced it was spending a half a billion-dollar investment into research and manufacturing solely in France. And, with UK companies potentially losing access to EU funds such as the EIB and EIF, this could be a sign of the times to come.
The pharmaceutical industry has had an interesting year and has flourished despite the COVID-19 challenges. 2021 will be an interesting time for the sector, as we wait to see how COVID, Brexit and the US Presidential election influence future funding rounds.
At Panda International, we follow the latest trends and development in pharmaceuticals closely, so we can best support our candidates and clients.
If you want to learn more about the future of pharma and how this year’s investment activity affects your career or candidate search, get in touch with our pharma experts today.