Life Sciences Snapshot – A Quarterly Report on Financing Trends – Q1 2024

This edition of Orrick’s life sciences publication series reviews key trends of venture investment in the life sciences industry during Q4 2023. This edition also features key industry leaders in a roundtable discussion about women’s healthcare, which is going through a period of significant development to address persistent challenges in access and quality.

Key findings include: 

• Life sciences VC deal value in Q4 2023 totaled $6.6 billion, representing a 25.0% decrease from the prior quarter. Total deal value for 2023 reached $28.3 billion—a 23.2% decline from 2022 and the lowest annual total since 2019, indicating a return to pre-pandemic levels of activity as the VC environment has yet to fully regain its momentum.
• Deal sizes declined for most company stages in 2023 as fundraising slowed and investors shifted toward portfolio monitoring. Early-stage companies experienced a decline in the median deal size for the first time since 2019.
• Valuations also declined for all company stages except pre-seed/seed, as companies and investors continued to face funding headwinds but recognized opportunities within the earliest stages of development.
• The exit environment for life sciences VC also remained in the shadows of its 2021 record high, with a total of $16.3 billion generated across 120 deals, which represents a further moderate decline from 2022. Acquisitions and buyouts emerged as more popular exit routes in 2022, and this trend continued throughout 2023.