2023 March Life Sciences Update

Global Funding Slows

Global life sciences venture capital (VC) funding and initial public offering (IPO) markets experienced a slowdown in 2022. Funding totaled $66.6 billion, down 45% from peak 2021 levels, based on a Cushman & Wakefield analysis of Pitchbook data. The funding drop was less pronounced in the VC sector, which fell 35% YoY, while public offerings fell 71% YoY. All global regions experienced a drop in funding in 2022. Funding totaled $38.7 billion in North America (-40% YoY), $7.5 billion in Europe (-59% YoY) and $20.5 billion in APAC (-48% YoY). North American private equity (PE) funding totaled $37.3 billion, down 24% YoY. There was a dearth of life sciences IPOs, totaling $1.5 billion, which was a significant drop from $15.4 billion in 2021. Other global regions have also experienced a drop in VC funding and IPOs. VC funding in major European markets totaled $7.4 billion, down 42% YoY, and IPO activity was muted at $90 million, significantly lower than the $5.6 billion of public offerings in 2021. APAC saw slightly more deceleration with VC funding—down 53% YoY to $12.3 billion—but APAC IPO volume was the strongest of all three global regions at $8.2 billion, 36% lower than the peak 2021 volume of $13 billion. Although overall life sciences VC funding levels fell on a YoY basis, some markets saw higher funding activity. Among the major hub markets, the San Francisco Bay Area (+32%), New Jersey

(+76%) and Raleigh-Durham (+36%) saw increased VC funding in 2022. Funding also increased in some emerging markets, including Denver (+6%), Austin (+80%), Minneapolis (+26%) and Atlanta (+2%). Looking at individual deal activity, three of the five largest deals transacted were in the San Francisco Bay Area, including Altos Labs’ $3 billion deal. Deals for San Diego-based Resilience ($625 million) and New Jersey-based Areteia Therapeutics ($350 million) rounded out the top five. The sector is facing increasing headwinds with the recent demise of Silicon Valley Bank (SVB), where many venture capital-backed biotech companies bank. 2 The federal government stepped in quickly to guarantee access to deposits, regardless of the size, which allowed companies to use their funds for ongoing operations. Additionally, current loans will be transitioned to a new lender or lenders once a buyer or buyers are identified. While the government has worked to return confidence, the uncertainty introduced into the banking sector will have reverberations throughout the venture capital sector and may impact funding flows to the life sciences sector in 2023.

2 https://www.fiercebiotech.com/biotech/biotech-bank-svbs-capital-crunch-sparks-bank-run-companies-huddle-consider-exposure

Global Life Sciences Venture Capital

Global Life Sciences Public Offerings

$10 $15 $20 $25 $30 $35 $40 $45 $50

$0 $5 $10 $15 $20 $25 $30 $35 $40 $45 $50 $0 $2 4 $6 $8 $10 $12 $14 16 18

$10 $15 $20 $25 $30 $35 $40 $45 $50

Billions

Billions Billions

Billions

$0 $5

$0 $5

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2 10 2011 2012 2013 2014 2015 2016 2017 2018 2019 20 021 022 2010 201 2 12 1 1 1 2 21 2

North America Europe APAC

North America

Europe

APAC

North America

North America

Europe

Europe

APAC

PAC

Source: PitchBook Data, Inc.; *Data has not been reviewed by PitchBook analysts. 2022 as of December 31, 2022

9 / CUSHMAN & WAKEFIELD

LIFE SCIENCES UPDATE | 2023 MARCH