Our consultants summarise activity in their sector across life sciences and healthcare for this year
Strategy
2023 has been another bumpy ride. Capital markets have continued to be challenging and access to private funding has been tougher than ever. Unfortunately, we have seen an increase in hiring freezes, mass layoffs and liquidations. But it hasn’t all been doom and gloom. Whilst this will understandably be a year to forget for many in biotech, the industry has served up some incredible breakthroughs. Of note was Eisai/Biogen’s FDA approval for Leqembi, the first ever drug shown to slow the progression of Alzheimer’s disease, and Lilly and Novo uncovering a new category of drugs (worth a projected $80 billion) for their game changing GLP-1 obesity medicines, Mounjaro and Wegovy.
Reset year for biotech
From a business perspective, 2023 felt like a bit of a reset year for biotech. Whilst there was a slight uptick in the IPO market, we are still well short of where we were two years ago. And VC investors are now much more cautious about the biotechs they back, increasingly wanting to see clinical data before pulling the trigger on any deal. Follow-on financings have also been in short supply for both private and public biotechs, with crossover rounds notably down. This squeeze on access to capital has forced a lot of companies to tighten their belts and extend runway with redundancies and cost-cutting measures. Planned periods of growth and hiring have in many cases been shelved until further funding is in place – in the meantime, for key appointments, biotech boards are placing real emphasis again on securing seasoned executives with good investor relationships and the experience to navigate choppy waters.
M&A activity
At the start of this year, I posted about our expectations for a busy year of M&A deals, citing the appetite of Merck CEO, Rob Davis, for acquisition opportunities: ‘when the science and value align, we will act’. Within a few months, Merck had dropped $10.8 billion on Prometheus, and Pfizer paid $43 billion for Seagen – both highly competitive bidding processes with several interested parties. (Seagen reportedly had five companies in their data room; Prometheus, 15!) A lot of this activity has been pushed by Big Pharma battling key patent expirations (LOEs) and/or loss of revenue from COVID-related products. Overall, these deals are good for the industry and good for patients. I look forward to seeing how Pfizer can take forward Seagen’s ADC technology, and how Merck, as well as Roche, who acquired Telavant for $7.1 billion in October, can move the needle for IBD patients with their newly acquired TL1A directed antibody programs.
Predictions for next year
So as 2023 draws to a close, what can we expect from 2024? We see a steady stream of M&A activity continuing as Big Pharma doesn’t seem to be done with plugging revenue and pipeline gaps. And as the IPO window gradually reopens, we expect that access to public funding again will enable private investors to place their bets more confidently, albeit still with caution. These are challenging times in biotech for sure, but scientific advancement remains at an all-time high and that will always bring new opportunities for those looking to deliver value to patients. I’ll cheers to that over the holidays.
CNS & Rare Disease
Although it has definitely been a tricky and challenging year for neuroscience and rare disease, we have also seen some fantastic successes that are very much worth celebrating. As Ben mentioned above, the approval of Leqembi and the development of other late-stage Alzheimer’s assets (including Donanemab) have given many dementia patients hope for effective and safe treatment. From a talent perspective, this has meant a massive increase in demand for candidates with a clinical background, especially those who can bridge the gap between R&D and commercial.
Scientific and clinical breakthroughs aside, we’ve also witnessed some notable investment wins. In 2023 we saw a combined investment of over $3.5 billion directed towards early-stage companies in the CNS and neuroscience space. Although the investment has been pretty evenly split across modalities and therapeutic areas, there has been a clear presence of precision medicine biotechs. Exemplifying this is Neumora, one of the few companies that have conducted an IPO this year. Another relevant example is Rapport Therapeutics, breaking the mould with both Series A and B raises in 2023. It’s not just VCs that have demonstrated interest in the CNS space. Big Pharma also seems to be showing an increased appetite for these therapeutic areas with preclinical and clinical acquisitions made this 2023. Some notable deals include AbbVie’s acquisition of Mitokinin and Cerevel, and Merck’s acquisition of Caraway Therapeutics.
Predictions for next year
As the market recovers, we will expect more investment to be directed towards CNS & Rare Disease biotech with novel platforms and promising assets. Subsequently, from a talent perspective we will inevitably see an increase in leadership team building for these VC-backed companies with the right culture fit and technical skill sets. As we see more assets reach FIH studies, we’ll also see a rise in clinical hiring and, importantly, we’ll see an increased demand for seasoned CMOs with the right balance between strategic and scientific strengths. Looking forward to discussing all of this (and more!) on my R&D Hiring Strategy podcast this year.
Commercial Consultant
While 2023 was a somewhat challenging year for hiring in the commercial biopharma ecosystem, we’ve seen numerous small and mid-size biotech companies starting to build commercial teams as they approach pivotal read-outs. We’re also already working with companies who are planning further commercial builds in 2024. There’s a global slump in the biotech market, and that’s reflected in the hiring slowdown, but we’re hoping for more movement as we go into next year.
The upcoming changes in the US with the Inflation Reduction Act mean that companies are starting to think more about their access teams and preparing their organisations to weather the storm. It’s a good time to have expertise in this area, as you’ll be significantly in demand!
The year has rounded out well for Big Pharma companies looking to consolidate their pipelines and acquire smaller companies – for instance, Biogen’s acquisition of Reata Pharmaceuticals in a $7.3 billion buyout. The volume of M&A deals has affected hiring and that, combined with a slimming down in headcount among some of the largest players, has contributed to a tough market for jobseekers.
In the Life Sciences commercial team at Venari Partners, we’ve been working with clients both big and small to help them grow their commercial practices across marketing, access, sales, general management, and C-level roles. Throughout the year, we’ve also curated a series of podcasts with Chief Commercial Officers in biotech, discussing their route into a C-level commercial role and best advice for execs who have ambitions of being a Chief Commercial Officer. We recorded ten episodes in the first season, with Amy Mahery, CCO at Roivant, Eric Matthews, CCO at Arcus BioSciences and Robert Francomano, CCO at SELLAS, among the guests. If you’d like to hear their thoughts on building out commercial teams and preparing for a CCO role, give it a listen now. Series two is in the works and the first episode is out now, with Patricia Drake, CCO at Trevena.
Oncology Consultant
Investment in the radiopharmaceutical field continued to flow during 2023. Eli Lilly entered the field and are set to acquire Point Biopharma and its pipeline of Radioligand Therapies (RLT) for a reported $1.4 billion. RayzeBio is now listed on the NASDAQ too, marking it out as of the few biopharma IPOs of the year. The growth in activity across the sector has meant a sharp spike in demand for experts in radiopharmaceutical development across CMC, radiochemistry, dosimetry, clinical development, regulatory and more. Owing to the field’s roots and the need for access to nuclear pharmacies, cyclotrons etc., a few hubs are emerging across North America and Europe (Toronto, Vancouver, Indiana, Belgium) which should encourage a more stable supply of talent for companies that base themselves there. However, clients are still struggling to identify and attract CMO and CSO candidates that combine both radiopharmaceutical and executive leadership experience. Companies seem to be countering this by assembling teams that cover the skills ordinarily sought in a single candidate.
Overall, the outlook for 2024 looks strong with more therapies entering into clinical development, continued investment in novel approaches, and additional isotope capacity being added to the system by new and existing suppliers. We will be discussing all these topics on our Talking Radiopharma podcast series soon, featuring business and academic leaders from across the globe. Stay tuned!