The impact of the COVID-19 pandemic has brought significant change in the Life Sciences industry sector in the last couple of years, whether it be an increase in logistical and supply chain complexities, changes to regulatory requirements, or obstacles to patient recruitment for clinical trials; all leading to a decline in profitability.
These obstacles have meant organic growth has proven to be difficult in the short term therefore inorganic growth through M&A activity has become a key focus strategically for corporate development teams and investment funds in the Life Sciences field.
The advantages of acquiring smaller businesses in this sector are clear: building scale through the accumulation of product lines, talent, intellectual property and expansion into new markets both jurisdictionally and offering wise has become a critical and vital tool for those investors looking for immediate returns.
The steady growth in venture capital invested in Life Sciences globally since 2010 however shows no signs of slowing so innovation into research and development (especially into the forced adoption of Digital Health as a consequence of COVID-19) should continue to thrive.
“Venture investment in Life Sciences has grown steadily over the 2010s, with 2021 seeing a jaw-dropping USD 67.9 billion invested worldwide across nearly 3,000 transactions” “2021 has already seen a record volume of corporate acquirers snapping up venture-backed portfolio companies, with a total of 330 acquisitions, paying out no less than USD 122.6 billion in total. Given the rates of VC funding within Life Sciences, such strategic acquisitions seem likely to continue at a rapid rate”