Healthcare and Life Sciences Quarterly Overview – Q2 2024

Healthcare and Life Sciences Quarterly Overview - Q2 2024

Our quarterly overview of the healthcare and life sciences sector delves into R&D partnerships, M&A, venture activity, and highlights notable deals. PeptiDream and Novartis expanded their agreement in April to develop peptide-drug conjugates, with PeptiDream potentially earning up to $2.7 billion. In May, AC Immune and Takeda formed a licensing option deal for Alzheimer’s treatment worth up to $2.1 billion. AbbVie partnered with Gilgamesh in May for neuroplastogen therapies, a deal potentially worth $2 billion. Johnson & Johnson completed a $13.1 billion acquisition of Shockwave Medical in May, while Vertex announced a $4.9 billion acquisition of Alpine Immune Sciences, expected to close in Q2. Merck’s acquisition of EyeBio in May could total $3 billion. On the venture front, Xaira Therapeutics launched with over $1 billion in April, and Hercules CM Newco Inc. secured $400 million in May. Formation Bio raised $372 million in June. The IPO market saw significant activity, with Tempus AI raising $411 million in May, Alumis securing $210 million in June, and Rapport Therapeutics garnering $154 million in May.

 

R&D Partnerships – Global Healthcare and Life Sciences

R&D Partnerships - Global Healthcare and Life Sciences

In Q2 2024, the global healthcare and life sciences sector saw 156 R&D partnerships worth $39 billion, with $2.3 billion in upfront cash and equity. This slightly increased from Q1 2024, when 154 deals valued at $37.4 billion had the same upfront cash and equity. During H1 2024, there were 310 deals totaling $76.3 billion, with $4.6 billion in upfront cash and equity.

 

Top R&D Partnerships – Q2 2024

PeptiDream and Novartis Peptide-Drug Conjugate Deal (Expanded Agreement) – April 2024

PeptiDream granted Novartis exclusive, worldwide rights to develop and commercialize peptide-drug conjugates. Using its PDPS technology, PeptiDream will identify and optimize macrocyclic peptide targets selected by Novartis, which will then be conjugated with radionuclides. PeptiDream will receive $180 million upfront and could earn up to $2.7 billion in development and commercial milestones.

AC Immune and Takeda License Option Deal – May 2024

AC Immune granted Takeda an option to license the development and commercialization of ACI-24.060, an anti-Abeta active immunotherapy candidate for Alzheimer’s disease. This partnership combines AC Immune’s expertise in active immunotherapy with Takeda’s experience in neuroscience drug development and commercialization. AC Immune will receive $100 million upfront and is eligible for up to $2.1 billion in development, commercial, and option exercise fees, plus tiered royalties.

AbbVie and Gilgamesh Research Partnership – May 2024

AbbVie signed a research partnership with Gilgamesh, gaining an exclusive option to license and commercialize Gilgamesh’s undisclosed neuroplastogen therapies for psychiatric disorders. This collaboration leverages AbbVie’s expertise in psychiatry and Gilgamesh’s innovative research platform. Gilgamesh will receive $65 million upfront and is eligible for up to $2 billion in option fees, milestones, and tiered royalties ranging from mid-single to low-double digits.

 

Biopharma, Platform, MedTech, and Diagnostics M&A

Biopharma, Platform, MedTech, and Diagnostics M&A

Our data show 95 M&As in biopharma, platform, medtech, and diagnostics during Q2 2024, totaling $40 billion with contingents and $35.9 billion without contingents. This is a decline from Q1 2024, which had 81 deals worth $43 billion with contingents and $39.8 billion without contingents. In H1 2024, 176 deals amount to $83 billion with contingents and $75.7 billion without contingents. The review indicates a shift in M&As with fewer deals in Q2 and a drop in deal values compared to Q1.

 

Top M&A’s – Q2 2024

Johnson & Johnson acquired Shockwave Medical for $13.1B – April 2024

Johnson & Johnson has acquired Shockwave Medical, specializing in medical devices like Shockwave C2+, Shockwave IVL, and Shockwave L6 for treating calcified cardiovascular diseases. Shockwave will become a business unit within Johnson & Johnson MedTech. Shockwave stakeholders will receive $335 in cash per share of common stock, representing a 4.7% one-day premium, for a total enterprise value of approximately $13.1 billion. The acquisition was completed on May 31, 2024.

Vertex Pharmaceuticals acquiring Alpine Immune Sciences – April 2024

Vertex is acquiring Alpine Immune, whose critical assets include Acazicolcept (ALPN-101) in phase 2 for Systemic Lupus Erythematosus and Povetacicept (ALPN-303) in various stages of development for Lupus Nephritis, immune thrombocytopenia, idiopathic thrombocytopenic purpura, autoimmune hemolytic anemia, agglutinin, and other diseases, along with a directed evolution platform. Alpine Immune shareholders will receive $65 per share in cash, reflecting a 38.18% one-day premium, for a total deal value of $4.9 billion. The agreement is expected to close in Q2 2024.

Merck acquiring EyeBio – May 2024

Merck is acquiring EyeBio, whose lead assets include Restoret, a phase-Ib/2a candidate for diabetic macular edema and age-related macular degeneration, and preclinical assets targeting retinal diseases. EyeBio is eligible for up to $3 billion, including $1.3 billion upfront and up to $1.7 billion in development, regulatory, and sales milestone payments.

 

Venture Activity – Global Healthcare and Life Sciences

Venture Activity - Global Healthcare and Life Sciences

During Q2 2024, the global healthcare and life sciences sector saw 305 venture rounds, raising $12.4 billion, nearly the same as Q1 2024, which had 307 rounds and raised $12.4 billion. In total, H1 2024 saw 612 funding rounds totaling $24.9 billion.

 

Top Ventures Q2 2024

Xaira – Series A – $1B – April 2024

Xaira Therapeutics launched with over $1 billion in capital. The company is jointly incubated by ARCH Venture Partners and Foresite Labs, with additional investors including Lux Capital, Two Sigma Ventures, F-Prime, and Sequoia Capital. Xaira uses AI/ML/Data Models to develop drugs for difficult-to-target diseases.

Hercules CM – $400M – May 2024

A 4-investor syndicate provided $400 million to establish Hercules CM Newco Inc., which holds global rights to a portfolio of diabetes and obesity medicines from Hengrui. The start-up launched with a valuation of about $570 million. Investors include Bain Capital Life Sciences, RTW Investments, Atlas Venture, and Lyra Capital.

Formation Bio – Series D – $372M – June 2024

Formation Bio raised $372 million in series D financing, led by a16z. Significant participation came from Sanofi and existing investors like Sequoia and Thrive. The funding will be used to acquire and in-license candidate drugs and expand the company’s AI capabilities.

 

IPOs – Global Healthcare and Life Sciences

IPO Activity - Global Healthcare and Life Sciences

In Q2 2024, the global healthcare and life sciences sector had 6 IPOs, raising $1.5 billion, a significant drop from Q1 2024, with 11 IPOs raising $5.1 billion. The H1 2024 saw 17 IPOs, generating $6.6 billion.

 

Top IPO’s Q2 2024

Tempus – IPO – $410.7M – May 2024

Tempus AI Inc., a company leveraging AI to process medical data, raised $411 million in its IPO by selling 11 million shares at $37 each. The shares opened at $40 and closed at $40.3, giving the company a market value of approximately $6.6 billion. Founded in 2015 and based in Chicago, Tempus AI specializes in “intelligent diagnostics” for precision medicine, focusing on oncology, neuropsychiatry, cardiology, and radiology.

Alumis – IPO – $210M – June 2024

Alumis, an immune drug developer, raised $210 million in its IPO, selling 13 million shares at $16 each. The IPO was supplemented by a $40 million private stock sale to AyurMaya Capital Management. Alumis’s lead program is a TYK2 inhibitor, an oral drug promising in treating various immunological conditions. This IPO is part of a trend where companies like Acelyrin, Kyverna Therapeutics, AbiVax, and Apogee Therapeutics have raised over $200 million since early 2023.

Rapport Therapeutics – IPO – $156.4M – May 2024

Rapport Therapeutics raised $154 million in its IPO, achieving a valuation of about $601 million. The company sold 8 million shares at $17 each, supported by Johnson & Johnson’s venture capital arm. Rapport develops small-molecule medicines for central nervous system disorders, with proceeds from the IPO advancing RAP-219, its lead product candidate for treating focal epilepsy.

All of this by stage, disease indication, modality, target…

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