Mid-year review 2022 - Biotech: it's a bloodbath, any survivors?

Challenges like never before hit the biotech sector. Despite science making tremendous progress, the various market indexes rolled back to 2016-2017 levels, all the while Big Pharmas are drenched in cash with more than $500bn deployable for M&A or licensing. Get ready for an exciting, thrilling, gut-wrenching 2H22 between FDA decisions, clinical results, and massive capital deployments.

Bottom line

Healthcare indexes tracking innovation and growth are badly down (XBI= -40%, NBI= -30%).

Big pharmas are generally sucking the blood out of the biotech to keep afloat, so it is time they unload their war chest, estimated at $500bn. They better do it fast; by 2030, over $170bn of annual combined drug sales will face a patent cliff, and the biosimilar players are lining up.

Another reason to speed up is that the FDA is only slowly opening the doors to innovation, so securing the next blockbusters in 2022 and 2023 is an opportune time window to get them on the market in 2027-2028. We believe they will come from gene therapy, cell therapy, and protein degraders.

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