Q3 2023 Quarterly Insights

M&A and IPO Activity

In This Report

  • M&A Activity

  • Top Headlines

  • Dynamk Capital Insights

  • VC Investments

  • Recommended Reads

M&A activity remained slow over the summer. Thermo Fisher completed the acquisition of data intelligence platform, CorEvitas, for $912M. While strategics continue to sit on large pools of capital, acquisitions have tended to focus on the consolidation of smaller players or around strategically valuable assets with strong revenue and profitability profiles, making them immediately accretive.


Venture & Growth Investing in Life Science Industrials

On the VC side, LSIs continue to capture a similar amount of value while deal count continues to stagnate. There is a continued trend of extensions and flat rounds which is also reflected in the broader venture financing landscape. According to Cooley the percentage of down rounds reached their highest levels since 2014. It’s been a challenging fundraising environment for startups as the bar and traction expectations for any given round have shifted up.

Top Headlines

Thermo Fisher completes $912.5m acquisition of CorEvitas
ThermoFisher completed the acquisition of CorEvitas, LLC for $912M. The deal sheds light on Thermo’s strategy of “disciplined capital deployment” as described by their CEO.  CorEvitas is a leading provider of regulatory-grade, real-world evidence for approved medical treatments and therapies.

Sartorius Completes $2.6bn Polyplus Deal
The deal completed in July broadening broadens Sartorius's portfolio for gene therapies.  Polyplus is a leading provider of innovative technologies for cell and gene therapies. Transfection reagents developed and produced by Polyplus are key components in the manufacture of viral vectors.

Dynamk Capital Insights

Fewer deals this summer continued the “cautious optimism” theme of 2023.  Deal activity remained slow while transaction volume was relatively stable. At a macro level, the biopharma slowdown and China softness contributed to a sense of stagnation. 

Most agree we are now seeing signs of a leveling off to pre-pandemic norms as noted in a recent Endpoint News article.  Many life science strategics including Lonza, citing biotech funding slowdown as it lowers sales outlook, and Danaher, bringing its revenues down another 7%, revised their growth projections as they normalize to pre-pandemic trends.

At the early stage, there continues to be signs of BD activity and progress.  Having recently attended Biotech Week Boston and Cell and Gene Meeting on the Mesa conferences the message is clear, innovators are focusing on their core products and soft-pedaling secondary strategies.  Areas where we’re hearing exceptions are process technologies that can reduce costs or accelerate timelines.  This is particularly true for advanced therapies, a message that was echoed repeatedly at the Mesa conference. 

All of this directly translates to the advice we have been giving our portfolio companies: implement strategies to extend your runway and focus resources on long-term growth.  Founding Partner, Daniella Kranjac, shared this message during a widely noted panel at the Mesa conference which was echoed by Valerie Dixon, Managing Director at Morgan Stanley.  Valerie was quoted in a Genetic Engineering and Biotechnology News article covering the panel saying; “You need to be managing your own business for a two to three-year timeframe, not for next quarter or making that month’s quota.” 

Dynamk Recommended Reads

M&A/IPO

  • Apton Biosystem: M&A by PacBio for $110M for their high throughput short-read sequencer using state-of-the-art optics and image processing, paired with novel clustering and chemistry, to enable the sequencing of billions of clusters of DNA on one flow cell.

VC Deals

  • Cellares raises $255M Series C to commercially scale their Smart Factory, which seamlessly integrates advanced robotics, purpose-built technology, and interconnected software for cell therapy manufacturing.

  • Inceptive Nucleics raises $100M Series A to continue building tools to develop biological software for the rational design of novel next-generation RNA molecules through a singular combination of highly scalable experiments and deep learning.

  • Causaly raises $60M Series B to Catalyze AI-powered Preclinical Discovery.

Dynamk Capital Portfolio Company Rounds

Research

  • With $82 million in FDA funding, MIT will conduct a three-year research program to design a fully integrated continuous mRNA platform.

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

Dynamk Capital