The current biotechnology market: Why we’re feeling optimistic

Following years of success with innovative breakthroughs, exciting partnerships and various companies going public, the recent lull in biotech activity came as a shock to many.?

It’s been a challenging year for the industry, but it looks like the market is ready to emerge out of the other side with a new lease of life. Showing promising signs of growth - predicted to grow at a compound annual growth rate of 13.9% from 2022 to 2030 - we’re still feeling optimistic about what’s in store for the future of biotechnology.?

Here’s a breakdown of the current market, and why we believe we’re on the cusp of a global biotechnology rebound.???

Why has the industry seen a downturn?

Though the COVID-19 pandemic is well and truly behind us, we’re still feeling the weight of its impact across the world.?

Biotechnology was one of the few industries that benefited during the pandemic, with the outbreak spurring a rise in drug manufacturing as well as opportunities for talented individuals. Similarly, the industry soared with venture capitalist investment and rising IPO volumes.?

In more recent times however, the market has seen a significant lull, with company valuations and stocks plummeting, businesses laying off workers and clinical trials disappointing. The all-time industry highs that came out of the pandemic would always be hard to follow up.?

However, with murmurs of a mild US rescission and other potential obstacles, the industry is currently grappling with a challenging market. But we know there’s still reason for optimism.

The biotech rebound

The final quarter of 2022 saw the industry start to make its way towards a rebound, driven by favourable drug launches and successes in clinical trials.?

2023’s rebound will be led in part by capital raised by venture capitalists, world-changing breakthroughs and forged partnerships.?

New therapeutics?

Innovation has always been, and remains, the biggest driver of value within the biotechnology industry. It’s what it relies on. Throughout 2023, innovation is expected to continue at a good pace, with companies on their way to pursue exciting advancements in large therapeutic areas - which should prove whether major markets - like Alzheimer’s, oncology, DMD, haemophilia and more - are penetrable.?

Various new therapeutics are in the development stages, and advancing technologies such as gene editing and cell therapy are driving this even further.

Multiple key FDA decisions are expected to be made this year, which could be huge news for major medical markets looking for their next breakthrough. Hopefully, rather than seeing clinical trials fade into nothingness, we’ll see a huge push with various treatments getting through to commercialisation.??

All in all, the pipeline is an exciting one, with many new breakthroughs gearing up to hit trials.?

Mergers and acquisitions

We’re expecting to see all kinds of partnerships between small to mid-sized biotechs and big pharma companies come 2023. Mergers and acquisitions will always be one of the key ways to drive momentum in the field. And luckily, we’re set to see an uptick in deals that will be a catalyst for biotechnology stocks, alongside working to improve growth and diversification among the larger companies.?

Pharma giants - such as Pfizer and Bristol Myers Squib b (just to name a few) - are ready to target new, innovative biotechs to help optimise their portfolio and keep the biotech industry growing.?

Venture capitalists

Biotechnology companies will always need capital, now more than ever. Though we saw a lull and economic downturns throughout 2021 and the majority of 2022, firms still have plenty of capital to funnel into early-stage companies and ramp up their investments.?

As a result, leading to world-changing breakthroughs that facilitate unmet needs of patients all across the globe.?

Stepping up to the challenge?

The industry is by no means out of the woods, but we’re certain that it’s ready to make a comeback. A promising future is afoot.?

Biotechnology developments will always be a long-term investment. It’s a high-risk environment, but when it pays off - it just makes it all the more worthwhile.?

As we continue through 2023, it’s important for biotechnology companies to not lose hope, step up to the challenge and like us - remain optimistic.