- A new report from market intelligence agency BioPharm Insight explains the number and size of initial public offerings (IPOs) increased dramatically during Q4, but the value of worldwide healthcare deals and venture financing decreased.
- "The big question is whether the IPO window in 2017 will remain open or if the unfavorable market sentiment that dominated the first three quarters of 2016 will return,” BioPharm Insight Editor in Chief Querida Anderson said in a Jan. 24 statement.
- President Donald Trump hasn't made predictions on the industry's trajectory any easier either. Trump signaled during his campaign a desire for tax reform, which would encourage drugmakers to bring money back to the U.S. But his recent criticism of rising drug prices has ignited worry across the pharmaceutical that further backlash may be on the horizon.
The global pharmaceutical industry had a confusing fourth quarter, and things might not get much clearer in the new year.
There were 35 healthcare companies worldwide that went public during the fourth quarter, up 67% from the 21 seen in Q3, according to the BioPharm Insight report. The combined value of those nearly three dozen IPOs was $8.15 billion, crushing the $1.75 billion seen in the precursing quarter.
Balancing out the positive IPO environment found in the fourth quarter were lackluster deals. To be fair, the amount of M&A and licensing agreements did increase, but the value of those transactions fell by 5% and 17%, respectively. Venture funding also dropped by 13%.
It's unclear how funding, M&A and IPOs will be affected under the new administration, however. BioPharm Insight cited optimism within the industry concerning Trump and a Republican-controlled Congress.
"Even though Donald Trump’s stance on drug pricing was largely unknown, his surprising victory in the U.S. presidential election created momentum for a healthcare market rally in November," Peter Murphy, senior editorial analyst at BioPharm Insight, said in the statement. "The prevailing wisdom is that there will be no major pricing reform under a new administration and Congress, with overall signs for M&A activity pointing up in large part due to the Republican Party’s stances on tax reform and cash repatriation."
But that wisdom has wavered in recent weeks. Trump commenting that the pharmaceutical industry has been "getting away with murder" with regard to the large price tags on certain medications led to a sharp decline in biotech and pharma stock.
As the President begins his time in office with a medley of executive orders, there's still plenty of ambiguity about where drugmakers stand in 2017.