Life Sciences Snapshot – A Quarterly Report on Financing Trends – Q3 2022

This edition of Orrick’s life sciences publication series reviews key trends of venture investment in the life sciences industry during Q2 2022. While life sciences venture deals were resilient in Q1 2022, despite various disruptions in the broader markets, momentum slowed in Q2 2022. Far fewer deals were closed in Q2, presenting the lowest deal value for a quarter since Q2 2020 and a 34.5% decline from the previous quarter. However, on a historical basis, deal value remains steady—the aggregate deal value generated in H1 2022 represents more than half of total deal value in 2020. This edition also features key industry leaders in a roundtable discussion on anticipated changes in antitrust regulation in the life sciences ecosystem.

Key findings include:

• The industry generated $8.8 billion in deal value across 362 deals in Q2, a material decline from Q1, as the public market decline and macroeconomic pressures continued. 
• Median deal sizes remained flat from 2021 for all stages except Series A. Median pre-money valuations rose across the board. A smaller population of deals may account for some of this increase.
• Public market turmoil continued to create ripple effects across the industry, particularly for exit activity. IPO conditions remain unfavorable, and acquisition activity was subdued.