Q4 2022 Quarterly Insights

In This Report

M&A and IPO Activity

  • M&A Activity

  • Top Headlines

  • Dynamk Capital Insights

  • VC Investments

  • Recommended Reads

Deal volume decreased in Q4 while deal value was driven by a $5B+ LBO for Citeline. Overall, M&A activity was quiet and light on value. There were a few smaller acquisitions in the Life Science Industrials space as acquirers appear to be hunting for deals.

That said, there remains plenty of firepower for M&A - Novartis, Pfizer, and J&J are sitting on $20B+ while Sartorius and Danaher are sitting on $10B+.

Top Headlines

Samsung Biologics Secures 10yr $296M GSK Contract

The 10 year contract, beginning October 11 2022 and ending December 31 2030, is sure to fill capacity with Samsung’s newest “Super Plant” boasting 6x 10,000L capacity.  The deal came days after Samsung Biologics began operations at its fourth facility in Songdo, Incheon. 
Press Release

Dynamk Capital Insights

022 look back and 2023 outlook

2022 started with a sense that the venture ecosystem was going to experience a slowdown. This was true in aggregate as well as for the Life Science Industrials sector. There has been a pullback throughout the year, which has been especially strong in the second half of 2022. VCs deployed $283.3B in 2022 compared to $344.7B in 2021. Yet taking these numbers in their historical context, it was still a banner year with amounts deployed eclipsing all years before 2021.

In addition, 2022 saw many changes that will continue to catalyze the need for innovation in Life Science Industrials for years to come. The Inflation Reduction Act provided new sources of funding as well as pressure on drug pricing and a push towards biologics. The FDA Modernization Act provided a path to animal-free drug development, a growth driver for companies offering solutions in this area. Pharma and biotech continued to emphasize the criticality of CMC with cell and gene therapy modalities.

We believe 2023 will drive toward a new normal. We expect flat rounds, inside rounds, and even down rounds as companies adjust from the highs of 2021 and 2022. Valuations multiples will more closely resemble pre-pandemic numbers. Startups with product market fit, positive unit economics, and strong leadership teams will raise capital.

While the end of 2022 saw investors pause and take stock, healthcare VCs raised over $50B in the last two years and will need to deploy. Acquires are also sitting on record cash, creating an environment ripe for M&A activity.

Venture & Growth Investing in Life Science Industrials

Investments in Life Science Industrials remained tepid through the end of the year. Fewer deals with lower financing amounts were done in Q4. There is a continued sense that investors focused on their existing portfolio companies before going out to invest in new deals.

Funding amount was flat compared to Q3, although deal volume continued to decrease. Overall, the second half of the year saw a roughly 60-70% reduction in amount invested across all stages compared to the start of the year. There appears to be a return to pre-pandemic levels as the the total amounts remain on par with amounts raised in 2020.

Dynamk Recommended Reads

Business/Industry News

  • Xcell Biosciences and aCGT Vector Collaborate to Accelerate Development of Cell and Gene Therapies

  • FUJIFILM Diosynth Biotechnologies and RoosterBio Announce Collaboration to enable GMP Manufacturing of Cell and Exosome Therapies

VC Deals

  • Cellarity’s $121M series C round will help harnesses single-cell technologies and machine learning to digitize and quantify cellular behaviors

  • China-based Qitan Tech: completes $98.6M Series C to fund next generation sequencing technology

  • Strand Therapeutics: Series A, $98M, developing the first platform for the creation of programmable, long-acting mRNA drugs

  • Resolve Biosciences: Series B, $71M, platform produces deep contextual data sets that illuminate molecular interactions at subcellular resolution

  • US-based, CDMO August Bioservices completes Series B, $65M, offering end-to-end cGMP manufacturing

M&A/IPO

*Note: reported transaction amounts and timing are subject to change dependent on final closings. 

Dynamk Capital