BIO Releases 5th Annual Emerging Therapeutic Company Trend Report Showing Record Year for Venture Capital Funding

May 31, 2019 Off By BusinessWire

WASHINGTON–(BUSINESS WIRE)–Today, the Biotechnology Innovation Organization (BIO) released the 2019
Emerging Therapeutic Company Trend Report
, highlighting ten
years (2009-2018) of biotechnology funding and deal making across five
areas: venture capital, Initial Public Offerings (IPOs), follow-on
public offerings, licensing, and acquisitions. The report also contains
a 2019 snapshot of the industry’s clinical pipeline to highlight the
significant contribution of emerging companies.

Some of the key findings include:

  • Venture Capital: A record $12.3 billion in venture funding went
    to U.S. emerging therapeutic companies in 2018, with 95% toward novel
    R&D and only 5% into drug improvement R&D for existing drugs. Venture
    investment into innovative U.S. therapeutic companies continues to
    outpace Europe (5.7x), Asia (4.6x), and the rest of the world (35x)
    despite a record $5.2 billion for Ex-U.S. companies. First-time Series
    A financing broke a record in the U.S. with 109 new companies
    receiving funding, indicating a robust interest in early-stage biotech.
  • IPOs: U.S.-based R&D-stage emerging therapeutic companies were
    able to raise $5.1 billion from 47 IPOs in 2018, a record dollar
    amount and the 2nd highest number of IPOs in a decade. Ex-U.S. based
    R&D-stage emerging therapeutic companies raised $2.3 billion from 22
    IPOs, a record dollar amount.
  • Follow-On Public Offerings: Public market follow-on offerings
    for U.S.-based R&D-stage emerging therapeutic companies remained
    strong, with $11.5 billion raised in 2018 across 118 offerings (valued
    at $10 million or more). Ex-U.S.-based R&D-stage emerging therapeutic
    companies raised $3.2 billion from 28 transactions in 2018, a record
    year in dollars raised and the number of financings.
  • Licensing: Global R&D-stage licensing deals (valued at $10
    million or more) brought in $9.1 billion in upfront payments, a 107%
    increase over 2017. Asian emerging company assets accounted for a
    record 18 of these deals in 2018, albeit reaching only 11% of the
    total funds raised.
  • Acquisitions: The number of global R&D-stage emerging
    therapeutic company acquisitions rebounded from a decade low of 21 in
    2017 to 28 in 2018. A record $32.5 billion was paid upfront for the 28
    R&D-stage companies. U.S.-based companies accounted for 66% of the
    R&D-stage emerging company acquisition targets. The number
    of global market-stage emerging therapeutic company acquisitions
    reached a decade low of four acquisitions for $2.2 billion (upfront).
  • Global Clinical Pipeline: Total active clinical-stage programs
    reached a record 6,984 with emerging companies accounting for 73% of
    these programs. Emerging companies have 94 marketing applications for
    new drugs (NDA/BLAs) under review at the U.S. FDA. U.S.-based emerging
    companies account for 62% of these submissions.

“A favorable public policy environment for investment and licensing is
critical for today’s emerging biotechnology companies searching for
cures and treatments for patients suffering from devastating and
life-threatening diseases,” said BIO President and CEO Jim Greenwood.
“As this report demonstrates, biotech investors and innovators continue
to view the U.S. and its free-market system for biopharmaceuticals as
the most hospitable environment for their lifesaving research, investing
nearly six times as much venture capital into U.S. firms than in Europe
– where governments, not markets, often determine the price of drugs.

“As Asia-Pacific countries accelerate their investment into biotech, it
will be more important than ever for Congress and the Administration to
ensure that proposed changes to America’s pharmaceutical reimbursement
system do not jeopardize U.S. leadership in biomedical innovation.”

The report, authored by David Thomas and Chad Wessel of BIO’s Industry
Analysis team, documented decade highs in 2018 for both investment and
deal making, and highlighted the indispensable role emerging of
biotechnology companies in filling the pipeline of new treatments and

“Overall, this report shows that the state-of-the-industry has been
strong in recent years and we expect to hear more about recent success
stories from emerging companies at next month’s BIO International
Convention in Philadelphia,” said report co-author David Thomas, CFA,
BIO’s Vice President for Industry Research. “Emerging companies now
drive 73% of the clinical-stage pipeline. For this group of companies to
transform the future of medicine, it is imperative that the right
regulatory and financial policy environment be maintained.”

Thomas will be discussing the report’s findings at the following
sessions during the BIO
International Convention
, June 3-7, 2019 in Philadelphia:

Next: The Landscape of Innovation in 2019 and Beyond

3 PM ET,
June 3

Intentions: 2019 Market Outlook

12:15 PM ET, June 5

The report and other BIO Industry Analysis reports are available for
download at

About BIO

BIO is the world’s largest trade association representing biotechnology
companies, academic institutions, state biotechnology centers and
related organizations across the United States and in more than 30 other
nations. BIO members are involved in the research and development of
innovative healthcare, agricultural, industrial and environmental
biotechnology products. BIO also produces the BIO
International Convention
, the world’s largest gathering of the
biotechnology industry, along with industry-leading investor and
partnering meetings held around the world. BIOtechNOW
is BIO’s blog chronicling “innovations transforming our world” and the
BIO Newsletter is the organization’s bi-weekly email newsletter. Subscribe
to the BIO Newsletter

Upcoming BIO Events

International Convention

June 3-6, 2019

World Congress

July 8-11, 2019
Des Moines, Iowa


Daniel Seaton