Cautious Optimism Surrounds 2024: Emerging Trends and Investment Outlook in Pharma and Biotech
As 2024 approaches, there’s a sense of cautious optimism in the pharma and biotech sectors, following a challenging period marked by a significant drop in investment post-pandemic. Anticipating a reset, there’s hope for renewed funding in vital clinical research and cutting-edge technologies that could reshape treatment options for diseases with limited or no existing solutions.
While investors are expected to remain risk-averse, the consensus is that the extraordinary investment boom witnessed during the pandemic is unlikely to repeat. However, certain ‘hot’ areas are attracting attention due to recent successes, notably in obesity and neurology.
Roche’s $2.7 billion acquisition of obesity biotech Carmot Therapeutics in 2023, with its dual GLP-1 and GIP agonist in phase 2 development, stands out. This drug aims to treat obesity in patients with and without type 2 diabetes, potentially competing with established treatments like Eli Lilly’s Zepbound and Novo Nordisk’s Wegovy.
In neurology, there’s notable progress with new Alzheimer’s drugs, such as Biogen’s Aduhelm and Eisai’s Leqembi. Dr. Jörg-Thomas Dierks of Neuraxpharm highlights that these successes, while significant, only slow the disease’s progression. He emphasises the high investment and risk associated with addressing unmet medical needs in neurology, but notes the recovery of pre-pandemic investment flows.
In medtech, Anne Osdoit of Sofinnova Partners predicts increased investment in neurotechnology, particularly neurostimulation, alongside robust activity in orthopedics and cardiovascular interventions, specifically heart failure.
However, caution prevails in digital health and medtech. Osdoit notes a 35% drop in medtech investment in the first half of 2023, attributing it to a decrease in new investor-led financings and a dip in large financings over $200 million.
Renée Aguiar-Lucander, CEO of rare disease biotech Calliditas Therapeutics, warns that capital markets will “remain difficult to navigate” for public biotechs in 2024. Despite challenges, she sees opportunities for companies with strong data and significant catalysts.
In conclusion, the pharma and biotech landscape in 2024 is characterised by optimism tempered by caution, with specific therapeutic areas and technologies presenting attractive investment prospects amid evolving market dynamics.
