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June 19, 2023 | Tom Ballard

Big pharma not the funding source it used to be for start-ups

M&A activity was the lowest it had been since 2013, while partnerships with big pharma was the lowest it had been since 2018.

Crunchbase News reports that pharma companies usually partner with start-ups to drive them through clinical trials, but large pharmaceutical organizations have been laying low since the funding downturn.

In 2022, merger and acquisition activity in the space was the lowest it had been since 2013, according to Clarivate Analytics. Partnerships, through which pharmaceutical companies fund the development of drugs and commercialize them themselves, was the lowest it had been since 2018. Per Crunchbase data, funding in 2022 was as low as it was in 2020.

“It is, in a sense, somewhat surprising that partnership and acquisition activity has been so low,” writes Keerthi Vedantam in this recent article. “Without large research and development arms themselves, large pharma companies rely on smaller startups to discover and develop new drugs, which they later buy to commercialize, market, and patent.”

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