PitchBook News - VC's pharma play

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The Research Pitch

June 29, 2024

Presented by DC Advisory

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DC Advisory’s US Private Equity Mid-Market Monitor: Rare Sighting

DC Advisory’s US Private Equity Mid-Market Monitor report discusses the opportunities in sight for the US market that are driving strong momentum in M&A activity through private equity adaptability and adjusting to the ‘new normal’ of the market.

Private equity has shown adaptability and flexibility in order to enhance value creation
Investment committees have begun to normalize and accept the macroeconomic and geopolitical overhang to formulate a ‘new normal’ of ranges in which they are willing to transact
Many private equity firms are sitting on a substantial amount of dry powder, ready to deploy capital into promising opportunities as market dynamics evolve

Discover the latest insights and trends impacting the private equity market across various sectors within the US. Read the US Private Equity Mid-Market Monitor.

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Pharma verticals round out our coverage of healthcare VC and PE

Yesterday, we launched our inaugural Pharmatech Report.

Innovation in pharmatech is being driven by traditional and emerging technologies, from small molecules to advanced biologics and cell & gene therapies.

The vertical—comprising contract research organizations (CROs), contract development & manufacturing organizations (CDMOs), and contract manufacturing organizations (CMOs)—is crucial in the drug development landscape.

Pharmatech is a highly consolidated market, with the majority of market revenue concentrated among nine major companies. However, the rapid pace of innovation in drug development, particularly in areas like AI-driven discovery and advanced therapeutics, creates niches for specialized players where VC investments are flowing.

CROs enhance drug discovery and development through advanced technologies, AI, and precision medicine. CDMOs play a pivotal role in transitioning from research to manufacturing, exemplified by companies like Resilience and ElevateBio, which are advancing cell & gene therapy technologies. CMOs address production challenges for established drugs, as seen with the rapid scaling of mRNA production during the COVID-19 pandemic.

Clients can access our full segmentation of 1,200+ companies.

Investors in pharmatech include both VC and PE firms. VCs target emerging technologies and innovative services, such as AI and cell & gene therapy, while PE firms focus on acquiring established entities with a focus on small molecule or biologic drugs.

In Q1 2024, VC activity in pharmatech mirrored broader biopharma trends, with funding levels decreasing post-pandemic. Despite this, the sector remains attractive due to its high stakes and innovative potential, particularly in AI-driven drug discovery and advanced therapeutic modalities.

Download the Pharmatech Launch Report (Preview)

Last week, we also launched our Pharma Services Report, which tracks PE deal flow across 20 niche categories.

Pharma services has become the hottest area of PE healthcare investing as firms chase underlying growth trends in the life sciences industry and pivot away from direct investment in healthcare providers.

Download the Pharma Services Launch Report

With these launches, PitchBook offers a comprehensive suite of analyst reports across healthcare VC and PE investing. Check out our other coverage areas:

Best,

Kazi Helal, Ph.D., Senior Analyst, Biotech

Rebecca Springer, Ph.D., Lead Analyst, Healthcare

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Thematic Research

High-Stakes Foundation Model Horse Race Out of the Gates

OpenAI, Anthropic, and the other huge foundational model providers have emerged as the thoroughbreds of the current AI craze.

The rise in foundation model funding has continued in 2024.

They've raised the largest sums, bested the big tech giants' models, and attracted investors in the secondary market.

Our new research handicaps the AI horse race by sizing up investment opportunities and the progress made by each major startup in AI research:

read the free research

Industry & Tech Research

Improved search platforms and AI chatbots are among the ways startups are helping patients access healthcare, according to our Digital Health Report.

Across the sector, VC investment remained stable in the first quarter—but still down from the telehealth funding boom during the pandemic:

read a free preview

Market Updates

UK Market Snapshot

After a significant rebound during Q4 2023, VC deal value in the UK again plummeted in Q1 amid slow dealmaking.

The PE market followed a similar path, although with a little more resilience. Our report illustrates need-to-know trends across public and private markets:

read the free report

In the News

Our insights and data featured in the press:

VC fund count this year is on pace for the lowest total in a decade. [Fortune]

AI companies now represent 45% of unicorns and the majority of recently added value in private companies. [CNBC TechCheck]

There's been a climb in silent raises and unlabeled rounds in digital health. [Healthcare Dive]

European VC fundraising is fighting hard to match last year's already subdued numbers. [AltAssets]

If you're a journalist interested in interviewing our analysts or requesting data, contact our PR team.

ICYMI

More of our recent research (* - report preview):

Market updates

Thematic research

Industry & tech research

Credit research

Coming next week (subject to change)

PitchBook-NVCA Venture Monitor: First Look
Global PE First Look
Global Markets Snapshot: June
Carbon & Emissions Tech Overview
APAC Healthcare Market Snapshot

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PitchBook News - VC's pharma play

Older messages

Introducing pharmatech VC research

Handicapping the AI horse race

Connexa Capital closes $20M debut VC fund

Charting the path forward for LPs

Revisiting our 2024 VC predictions

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