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Global: The Future of Capital Raising in Biotech and Pharma

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Wave of opportunities with rising debt, private capital and VC funding

Despite a decline in overall global activity and a wariness from investors toward pre-profit companies in some industries, the biopharma sector continues to see significant levels of interest and investment. This is being driven by a number of factors, including a strong pipeline of innovative technology and new drugs in advanced R&D stages, robust demand from investors, who seek to leverage the higher returns on investment associated with the industry and the need for pharma companies to replenish their pipeline to secure future revenue. 

Although geopolitical factors are expected to impact the overall global market in 2020, the underlying strength of this sector will continue to promote deal making. With the rate of advancement in the AI space facilitating speedier drug and tech development, we expect to see a continued whet of appetite in the biotech and pharma space. 

Our new report, The Future of Capital Raising in Biotech and Pharma, explores the changing landscape of how biotech  and pharma companies are financing their growth, trends in the market and the biggest changes in the sector over recent years. Some of the main themes of the report include: 

  • Funds raised in the debt capital markets (DCM) space have shown significant increases, growing 80% from USD 57 billion in 2017 to USD 103 billion in 2019, driven by the pharma sector issuing large debt offerings to fund strategic and expensive acquisitions as they seek to secure their future pipeline and revenue stream. 
  • Deeper pools of VC are funding biotech development with an increase in investment of 30% between 2017 and 2019. 
  • Private capital raising is on the rise as larger investments are being made — up 45% in 2019 when compared to 2017. 
  • Licensing and collaboration agreements continue to increase as the sentiment on risk sharing and cost sharing grows. 
  • The US continues to dominate the biopharma space, but competition from innovative Asian biotech companies is rising, and equity investment in European biotechs hit a record high in 2019. 

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Koen Vanhaerents is a partner in corporate finance in the Brussels office. Koen joined Baker McKenzie in 1987. He advises Belgian and foreign clients on a wide range of corporate finance operations (both public and private) and complex corporate law issues. He is closely involved in numerous operations and take-overs on the Belgian capital markets, private equity transactions and mergers and acquisitions. From October 2009 to October 2014, Koen was a member of the Executive Committee of Baker McKenzie and Chairman of the EMEA Region of the Firm. From October 2014 to July 2020, he was Head of Global Capital Markets. “Koen Vanhaerents is regarded by commentators as “one of the leading M&A lawyers in Belgium” (Chambers), “In negotiations, he is excellent when assessing complex situations and helping to set the strategy”, “Looking for high-level, sensitive board-level advice, Koen is on my shortlist.”

Author

Ivy Wong is the chair of Baker McKenzie's Capital Markets practice in Asia Pacific and serves on the Global Capital Markets Steering Committee. Based in Hong Kong, Ivy is qualified in Hong Kong, England and Wales and New York. She has led many unprecedented and high-profile securities offerings and cross-border transactions in Hong Kong, including many successful listings that are first of its kind on the Hong Kong Stock Exchange and multiple landmark and innovative deals that won industry awards.

Author

Christopher M. Bartoli provides advice on corporate and securities matters to clients in various industries including technology, healthcare, energy, real estate, manufacturing, travel and consumer products. He serves on the Firm's Global Capital Markets Steering Committee and is a member of the American Bar Association's Task Force on Public Company Acquisitions, the Executives' Club of Chicago, the Illinois Bar Association and the New Jersey Bar Association.

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Pablo Berckholtz is the head of Estudio Echecopar's Banking & Finance practice in Lima and Chair of Latin America Capital Markets Steering Committee. He focuses on capital markets, corporate finance and derivatives, with experience in initial public offerings, high-yield debt and project bonds, representing both issuers and investment banks. He also has experience in derivatives matters, advises derivatives counterparties on regulatory and other Peruvian law matters.

Author

Ben McLaughlin is a partner in Baker McKenzie's Sydney office. He has over 25 years' experience in advising leading Australian and international public companies on mergers and acquisitions (M&A) and equity capital markets. Ben invented the Baker McKenzie Healthcare MapApp, an acclaimed mobile application that enables clients to access over 5,000 pages of legal summaries. He has been recognized by Chambers for his work in Australian and international M&A matters, as well as in healthcare and life sciences. Ben has also been recognised as "Lawyer of the Year" for Life Sciences Practice in Sydney and as one of the Best Lawyers in Australia for Corporate / Corporate Governance and M&A Law, Best Lawyers 2022 Edition. Ben is admitted to practice law in Australia and the US, and previously practised as a CPA.

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