Foreword
The first quarter of the year got off to a predictably shaky start for a biopharma market which is marked by increasing uncertainty and turmoil. Huge cuts at the FDA, coupled with the will-they/won’t-they situation on tariffs for pharmaceutical players are making it hard for investors and dealmakers to make bold moves in almost any part of the industry.
The good news is that M&A in the first quarter of 2025 was significantly up on the end of 2024, though that is a low bar to clear. The fourth quarter was exceptionally low in terms of potential deal value. Q1 saw a total value of $33.6bn which came mostly from the smaller deals we’ve come to expect in recent years, with three outliers doing the heavy lifting to hit that mark. One of these – Johnson & Johnson’s $14.6bn acquisition of Intra-Cellular – was the largest biopharma deal in close to two years.
The last year's hot modalities continue to feature in the dealmaking list. Developers with assets in ADCs, CAR-Ts and radiopharma were all snapped up and have the potential to break the billion-dollar mark in total deal value.
The long-awaited revival of first-time offerings continues to elude the industry. There were six IPOs on western exchanges (five in the US and one Swiss), which makes the 13th consecutive quarter of single-digit activity. And all of those six took place in January and February before the most recent ramping up of uncertainty.
The stock market continues to be tough on biopharma, with the XBI seeing its largest single-day decline on 4th April (just outside our Q1 remit, but worthy of note regardless). Most of the new entrants to the stock market are now trading below their initial offering price and it is hard to see many new companies racing to follow them any time soon.
Venture capital funding was well down on the quarterly average for last year with both the largest and smallest categories falling. Those stock value drops and the challenging dealmaking environment make it hard for investors to justify backing early stage companies, at least while there are so many questions about what the year ahead holds.
One thing that is certain is that there is plenty to consider in these pages, so let’s get into it.
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