Trends in Life Sciences

The life sciences industry enters 2024 with measured optimism. A flurry of announcements, from fundraising to mergers and acquisitions, closed out 2023. We’re seeing more of that in the first months of 2024, signaling that life sciences has reverted to its long-term growth trend.

Biotech and Pharma: Next Generation Drugs

Global Pharmaceutical Research and Development Spending

^{Source: Statista}

The efficacy of semaglutides or GLP-1s (glucagon-like peptide-1) in weight loss was one of the biggest stories in 2023. In addition to fighting Type 2 diabetes, applications for other conditions, like heart disease, are being studied. It’s no surprise then that these drugs are expected to perform well in 2024, with potential sales of over $35 billion.¹
Pharmaceutical companies that have FDA approval to use semaglutides for weight loss are having difficulty keeping up with demand. Other major pharmaceutical companies are either looking to develop their own products or considering smaller companies for acquisition opportunities.
The robust merger and acquisition (M&A) activity of 2023 saw many pharmaceutical companies acquiring small biotech companies that have promising drug trials. In one of the major deals of the year, Bristol Myers Squibb acquired Karuna Therapeutics for $14 billion at year-end, to add their schizophrenia drug to their offerings.
It is expected that 2024 will be another active M&A year, and we have already seen new announcements of pharmaceutical acquisitions of biotech companies.

^{1 Evaluate’s 2024 preview.}

Key Takeaway: Expect both biotech and pharma R&D to continue to decode treatments and drugs for existing conditions, and in many cases, work together to achieve results.

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A New Operating Manual for Startups

Global and US Quarterly Series A Venture Capital Funding

^{*As of Feb. 7, 2023}

^{Source: PitchBook Data, Inc.; *Data has not been reviewed by PitchBook analysts; RHS=Right Hand Side}

The blank-check environment of 2021 is behind us. Startups looking to venture capital will need to note lessons learned from startups that raised series A funding in 2023—a tough funding year.
Cambridge, Massachusetts-based ReNAgade Therapeutics successfully launched in 2023, with $300 million in series A funding,² reflecting strong investor confidence in the company’s platform.
Globally, series A funding totaled $1.3 billion in the first month of the year. The bulk of activity focused on the U.S., with $1.1 billion in funding, averaging $50 million per deal—nearly double the average deal size over the last three years. The trend of larger check sizes is carrying over from 2023, as investors are willing to commit more capital to companies that meet their investment strategy.

² ^{https://renagadetx.com/news/article1/.}

Key Takeaway: There is reason for optimism among startups, as significant dry powder exists. However, the lessons learned in 2023 still apply in 2024. Strong clinical trials, along with financial discipline, are key components to attract funding.