Life Sciences Snapshot – A Quarterly Report on Financing Trends – Q1 2023

This edition of Orrick’s life sciences publication series reviews key trends of venture investment in the life sciences industry during Q4 2022. This edition also features key industry leaders in a roundtable discussion about behavioral health and how venture capital funding for startups in this space rose during the pandemic.

Key findings include:

• Deal value reached $7.1 billion in Q4 across 392 deals, bringing the 2022 annual total to $38.0 billion across 1,795 deals. Aggregate value dropped between Q2 and Q3 and plateaued between Q3 and Q4 amidst prolonged global volatility.
• Median deal sizes declined for all company stages except Seed and Series A, which saw modest growth. Early-stage deals accounted for 53.7% of total deal value in 2022, up from 49.0% in 2021.
• Late-stage companies experienced a modest decline in median pre-money valuations, while early-stage companies saw material growth.
• Exit activity stagnated in 2022, reaching just $16.2 billion, marking the worst year for exit value since 2012. Acquisitions accounted for 70.3% of exit count compared to 44.3% in 2021, underscoring the impact of public market volatility.