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Dealmaking Gives Biotechs Needed Financial Relief, But Deal Terms Are Under Pressure

Pharma Partners And Buyers Are In The Driver’s Seat

 
• By Mandy Jackson

Biotechs are ready to partner or sell assets to raise cash while turmoil continues in the financial markets, but they are doing so at lower valuations, with IRA and FTC concerns putting further pressure on deal terms.

Two businessmen shaking hands during a meeting in the office, success, dealing, greeting & business partner concepts - soft light.
DEALMAKING OFFERS AN ATTRACTIVE FUNDING ALTERNATIVE IN A TOUGH FINANCIAL MARKET • Source: Shutterstock

Biotechnology firms that may have been reluctant to do a deal when venture capital and public market financing options were plentiful in 2020 and 2021 are now ready and willing to partner or find a buyer. But with companies facing the prospect of shutting down research and development programs or ceasing operations altogether without new funding, prospective partners and buyers are in the driver’s seat, and big pharma is further adjusting deal terms because of pressures they are facing.

The Inflation Reduction Act (IRA) signed into law in the US in 2022 requires the Centers for Medicare and Medicaid Services (CMS) to negotiate pricing for an escalating number of...

Key Takeaways

  • Dealmaking activity is robust as biotechs look to license or sell assets as a means of raising cash for in-house R&D while the financial...

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