Silicon Valley Bank (SVB) has released its annual Healthcare Investments and Exits 2017 report.
The document, which discusses the top trends in 2016 within the biopharma, device, tools and diagnostics sectors and provides an outlook for 2017, examines venture investing, fundraising trends and exits.
Key findings from 2016 include:
– Series A activity increased in the biopharma, device, diagnostic and tool sectors, mostly in biopharma due to newly raised venture funds and early-stage exits.
– Following a strong 2015, biopharma M&A activity slightly declined in 2016, and IPOs declined more than 30%.
– For a third year in a row, pre-clinical or phase I companies represented almost half of all biopharma IPOs with crossover investors being a significant part of this trend.
– Device M&A remained stable, but IPOs were down. Diagnostic and tool companies saw a decline in overall exits.
– The slower 2016 IPO market led to lower potential distributions to healthcare investors, off from a record year in 2015, but still above 2013.
Predictions for 2017 include:
– Biopharma will continue as the strongest sector for healthcare investments in 2017.
– the IPO window will remain open in 2017, anticipating 28-32 biopharma deals to occur.
– At least half of the biopharma M&A big exits will be for early-stage companies, with the total number likely between 18-22.
– Series A investment will remain stable for the device and diagnostic and tool sectors. A slight drop in biopharma Series A is expected as funds turn their attention to supporting Series B and later stage companies that are unable to go public. Potential distributions to healthcare venture capital investors are anticipated to remain at similar levels as 2016.
Read the full Healthcare Investments and Exits 2017 report here