The biotech market is heading to recovery in 2024, following a marked downturn in investment in 2022 and 2023, according to healthcare industry professionals.
A GlobalData survey ‘The State of the Biopharmaceutical Industry 2024’ found that more than 40% of the healthcare industry professionals surveyed globally expressed an optimistic or very optimistic sentiment on biotech funding starting to bounce back over the next 12 months.
Urte Jakimaviciute, Senior Director of Market Research at GlobalData, commented: “Biotech’s funding and investors are faced with current market uncertainty with high inflation, high interest rates, and geopolitical challenges. As patent cliffs loom for large pharmaceutical companies, they may choose to do more partnerships, merger and acquisition (M&A) deals with biotechs to enhance their drug development and innovation. Stabilising interest rates may also prompt a return for a more promising outlook.”
A 2023 report from Clarivate found that 2022 was a difficult year for biotech globally, as the industry saw a drop off in its ability to raise finance, combined with continued high interest rates and other economic challenges.
In the first quarter of 2023, investment was still subdued, with a 37% year-on-year decline in venture capital support for the biotech sector, according to a study by the UK BioIndustry Association. However, some improvement was already seen in the second quarter of 2023.
Biotech optimistic about 2024 growth
In the new survey, 60% of industry professionals felt optimistic or very optimistic about the industry’s growth in 2024, up by 13% from the last year (47%) projections.
Jakimaviciute added: “There were many challenges and changes for the global economy in 2023, ranging from disruption of international supply chains to turbulence in stock markets to escalating China-West tensions and geopolitical conflicts. Nevertheless, slowing inflation may offer more stability, confidence, and positivity regarding future growth prospects.”
GlobalData spoke to 115 healthcare industry professionals in November 2023.