Andrea Alms Video:  Money In Motion 103 - Trends In Private Equity By Therapeutic Area - Cancer Market

TRANSCRIPT Hello, my name is Andrea Alms. I'm technology investor and financial manager. And this is your money in motion. On previous episode, we explored the cancer market size and growth rate. It is big and fueled by the drug sales and revenue. Total cancer market average size is 238.8 billion, with a compound average growth rate of 9.5%. It begs the question if the market is big and robust, what is happening on the other end?

Are investors investing more money into cancer market in 2021? Oncology is by far the most popular therapeutic area globally. Cancer received a total private equity financing value more than three times higher than infection and parasitology. After the rapid growth fueled by the pandemic, venture capital investing peaked in 2021. In 2022, the life sciences industry faced new challenges due to the war in Ukraine.

Private equity rounds of biotech and pharma companies developing cancer drugs declined by 70% from Q1 2021 to Q2 2022. The good news is that the overall biopharma financing volume is still at a relatively high level compared to the pre-pandemic state. Despite the challenging conditions in the market, GlobalData recent survey, the state of the Biopharmaceutical Industry 2024 revealed that 44% of healthcare industry professionals are optimistic on the recovery of the biotech funding in the next 12 months.

This optimism comes after the downturn in private biotech venture financing, seen in 2022 and 23 during 2023, funding decrease by 43.2% compared to 2022, and by 52.3% compared to 2021. Attributed to macro economic pressures causing investors to be more cautious and prioritizing existing portfolios. Venture financing for U.S. based companies peaked in 2021 to 20.7 billion, which in turn saw many early stage biotechs going public that year with inflated valuations. However, this led to overvalued biotechs that were unable to deliver milestone outcomes, causing a decline in investors confidence and selectivity in new investments. Furthermore, recent challenges such as high inflation, high interest rates and global political instability has also prompted investors to be more selective. Over 2023, we've seen breakthroughs in vaccine development, cancer treatments, GLP one drugs like example that have revolutionized obesity management, gene therapy and gene editing technologies for rare diseases, and new treatments for complex diseases like Alzheimer's.

Yet the value problem persists. Investors are still coming up short in 2023, as the sector continues to experience underperformance in capital markets relative to the market index 2024 trending still, 44% are optimistic and the top refinancing by therapeutic area is oncology. Thank you. This is your money, your money in motion.