Biopharma Funding, Deals Fall Sharply in 2023 in ‘Strategic’ Shift: PitchBook

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Pictured: Concept art showing a tunnel of money/iStock, alexfiodorov

The biopharmaceutical industry will have raised $24 billion in venture capital funding across approximately 840 transactions by the end of 2023, a steep decline compared to the last three years, according to a new quarterly report by market data firm PitchBook launched Wednesday.

This year’s downward trend in overall dealmaking “is starkly different from the high-water marks of 2020 through 2022, when annual values reached $38.1 billion, $53.9 billion, and $36.9 billion, respectively,” the report concludes.

The 2021 total of $53.9 billion was driven by a flurry of investor activity due to the pandemic. However, PitchBook’s report contends that the current business climate “indicates a recalibration toward pre-pandemic investment norms, despite the sector’s explosive growth amid COVID-19.”

Exit activity was likewise slow this year, with only 84 projected deals totaling $17.9 billion. In 2021, there were 200 deals and acquisitions across the biopharma industry, reaching $86.4 billion. There were fewer deals in 2022—only 77—but they raised $23.4 billion compared to this year’s $17.9 billion.

Much of the decrease in exit activity is due to initial public offerings (IPOs). According to PitchBook’s report, this year saw a 71% decrease in deals, dropping from 154 in 2021 to 45 in 2022, while acquisitions dipped 28% from 45 to 32. Exits in 2023 will not substantially differ from 2022, PitchBook projects, with 55 expected IPOs and 29 acquisitions by the end of the year.

This reflects a September 2023 analysis from BioSpace, which found that this year has been a relative winter in biopharma IPOs. Among the few companies that have filed for IPOs are Acelyrin, which raised $540 million in April 2023 and RayzeBio, which targeted $311 million in September. Carmot also filed an IPO last month before being bought by Roche on Monday.

The slowdown in funding is indicative of a “strategic shift” in investments, according to PitchBook’s analysis, revealing a “trend toward fewer but more significant deals.” Funders are being more prudent with their money, prioritizing larger and more stable investments.

Investors backed more Phase I clinical trials in 2020 and 2021, followed by a sharp decline in 2022 and a slight rebound this year. This fluctuation reflects investors’ appetite for risk, particularly when it comes to “novel high-stakes modalities” such as cell and gene therapies, according to PitchBook’s analysis.

“In this climate, strategic patience emerges as a key virtue for investors looking to fully capitalize on the prolific pandemic-era investments,” the report states.

Tristan Manalac is an independent science writer based in Metro Manila, Philippines. He can be reached at or

Correction (December 22): This story has been updated to clarify that IPOs dropped significantly since 2021 but not since 2022. BioSpace regrets the error.

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