Life Sciences Snapshot - A Quarterly Report on Financing Trends

The market meets COVID-19

Q1 2020 | May.11.2020

photo of two copies of Life Sciences Snapshot Q1 2020In this new series, our expert lawyers explore trends in venture investing across the life sciences sector. Using data from PitchBook, in this first quarter issue we establish historical context to inform our trend analysis and navigate the impact of COVID-19.

To read the report, click here.

Key Takeaways

  1. Throughout the 2010s, life sciences saw a nearly uninterrupted boom in venture investment, with capital investing nearly tripling while deal volume more than doubled.

     

  2. Large rounds of $25 million+ grew steadily in frequency, from 9.8% of the total number of rounds in 2010 to 18.4% in 2019. Average valuations also increased, from $43.2 million to $81.1 million across the same timeframe. Median valuations remained constant, suggesting valuation increases in select areas rather than across the board.

  3. Comparing Q1 2020 to Q1 2019, PitchBook data shows an increasing percentage of dollars flowing into late stage deals.This could reflect the beginning of the impact of COVID-19, but also extends a trend that existed over the prior three quarters.After the last recession, PitchBook data show a steep decline in the amount of pre-clinical and Phase 1 companies, and we will be watching to see if this trend repeats.

  4. An in-depth Q&A with Orrick details the hurdles investors are encountering in the current environment, which life sciences’ segments are likely to garner more interest in the time of a global pandemic, what VCs should prioritize now and more.