The biopharma industry saw a resurgence in 2024, with an increase in funding and R&D expenditures, as well as a shift towards innovation from emerging biopharma companies. However, challenges such as a shifting regulatory landscape and economic uncertainties still loom over the industry’s future.
Funding levels reached a 10-year high of $102 billion in 2024, driven by IPOs, follow-on funding, and public and private sources. The uncertainty in the market may impact funding decisions in 2025, especially for early-stage companies.
In terms of clinical trials, there was a slight increase in new trials in 2024, with a focus on oncology and obesity. Emerging biopharma companies led the way in conducting new trials, accounting for 63% of the total. Novel drug mechanisms in oncology, such as antibody-drug conjugates and cell therapies, were prominent in new trials.
Despite the positive trends, there was a decline in R&D deals between pharma companies in 2024. Most deals were between emerging biopharma companies, with partnerships between larger companies remaining relatively rare. M&A activity was also down, although the median deal value increased significantly.
The use of AI in R&D is a trend that is expected to continue, with AI companies sponsoring or collaborating on new trials each year. AI/machine learning deals totaled nearly $10 billion in 2024.
Looking ahead, there are potential bright spots for the industry, including a focus on preventing chronic illnesses and streamlining regulatory reviews. The momentum around scientific discovery and the increasing unmet medical needs of patients are driving factors for continued R&D investment.
Overall, while uncertainties persist, the biopharma industry remains resilient and poised for growth, driven by a commitment to innovation and meeting the healthcare needs of patients.
