Life Sciences Snapshot – A Quarterly Report on Financing Trends – Q4 2022

This edition of Orrick’s life sciences publication series reviews key trends of venture investment in the life sciences industry during Q3 2022. This edition also features key industry leaders in a roundtable discussion on non-dilutive financing and how it can be a viable and valuable option for early-stage life sciences companies.

Key findings include:

• The industry generated $6.2 billion in deal value across 352 deals in Q3, exhibiting further quarterly declines as punishing macroeconomic conditions continued. YTD deal value, however, remains higher than before the onset of the pandemic.
• Deal volume has continued to decline, with Q3 deal volume returning to prepandemic levels.
• Median deal sizes for Series A and Series D or later companies experienced material growth, but some other stages saw declines. Median pre-money valuations rose for both angel, seed and early-stage venture-backed companies but declined slightly for late-stage deals.
• Exit prospects remain unfavorable, with just $463.6 million generated across nine deals in Q3. In contrast to deal value, YTD exit value of $13.8 billion lags far behind the annual totals of previous years, including before the pandemic. Public market volatility continues to impact IPO candidates, and many have adopted a wait-and-see approach.