Biopharma innovation trends during COVID-19 and beyond: an evidence from global partnerships and fundraising activities, 2011-2022

Abstract

Background: Co-development alliances and capital-raising activities are essential supports for biopharmaceutical innovation. During the initial outbreak of the COVID-19, the level of these business activities has increased greatly. Yet the magnitude, direction, and duration of the trend remain ambiguous. Real-time real-world data are needed to inform strategic redirections and industrial policies.

Methods: This observational study aims to characterize trends in global biopharma innovation activities throughout the global pandemic outbreak. Our extensive deal dataset is retrieved from the commercial database GlobalData (12,866 partnership deals and 32,250 fundraising deals announced between 2011 and 2022). We perform Chi-squared tests to examine the changes in qualitative deal attributes during and beyond the outbreak. Our deal-level sample is further aggregated into category-level panel data according to deal characteristics such as therapy area, molecule type, and development phase. We run a series of regressions to examine how the monthly investment amount raised in each category changed with the onset of the pandemic, controlling for the US Federal funds rate.

Results: The temporary surge of partnership and capital-raising activities was associated with the increase in infectious disease-related deals. Academic and government institutions played an increased role in supporting COVID-related co-development partnerships in 2020, and biopharma ventures had been securing more investments in the capital market throughout 2020 and 2021. The partnership and investment boom did not last till the later pandemic in 2022. The most significant and enduring trend was the shifting focus toward discovery-phase investments. Our regression model reveals that the discovery-phase fundraising deals did not suffer from a bounce back in the late pandemic, consistent with a persistent focus on early innovation.

Conclusions: Despite the reduced level of partnership and fundraising activities during 2022, we observe a lasting change in focus toward biopharmaceutical innovation after the pandemic outbreak. Our evidence suggests how entrepreneurs and investors should allocate resources in response to the post-pandemic tight monetary environment. We also suggest the need for policy interventions in financing private/public co-development partnerships and non-COVID-related technologies, to maintain their research capacity and generate breakthroughs when faced with unforeseen diseases.

Keywords: Biopharmaceutical industry; COVID-19; Fundraising; Innovation; Partnership.

Fig. 1

Data sets and methods. Figure 1 visualizes our research flow and provides detailed information about our data sets

Fig. 2

Cumulative Count/ Amount of the Partnership and Fundraising Deals (Monthly). Figure 2(A) shows the cumulative count of partnership deals since January 2011 by different disease types. Note that not all deals are presented in the charts. We pick only deals in the 5 major disease therapy categories for simplicity because the numbers of deals and average deal sizes in other categories are relatively trivial. The light yellow area indicates the main time period of our descriptive analysis (2018-2022). The darker yellow area represents the early phase of the pandemic (2020 alone), during which partnership deals experienced a significant increase. Similarly, Fig. 2(B) displays the cumulative amount of fundraising deals by development phase. The light-yellow area indicates the main time period of our descriptive analysis (2018-2022). In contrast to Fig. 2(A), the darker yellow area corresponds to the period between 2020 and 2021, during which fundraising deals observed a notable increase. In both Fig. 2(A) and 2(B), the pink numbers indicate the label of the corresponding time-points, while the white numbers on pink-filled circles represent the differences between the two time-points. As these are cumulative charts, the white numbers signify the number of deals during the darker-yellow periods

Fig. 3

Trends in the 32 categories of fundraising deals by therapy area, molecule type, and development phase. Figure 3 presents the cumulative amount raised in each category since January 2011

Fig. 4

The correlation between the US Fed rate and the monthly biopharma deal characteristics, 2018-2022. These panels demonstrate the relationship between the US Fed fund rate and the deal count/value and the percentage of discovery-phase deals in each year-month. We remark the months in which the count, value, or percentage is abnormally high or low