Over 800 private pharmaceutical companies have had their first exit since 2012. Total exit activity saw annual increases each year from 2012 through 2015, reaching a peak of 201 exits that year. In parallel, dealflow to private pharma companies also reached a high in 2015 with startups seeing nearly $11B in funding spread over 633 deals.
While IPOs quieted down since seeing a rush of activity in 2014, there has been significant growth in M&As over the past 4 years. Recently, the pharma sector saw the IPO of India-based Eris Lifesciences and the $775M acquisition of California-based Delinia by Celgene.
Using CB Insights data, we analyzed M&A and IPO activity since 2012 among private pharma companies (examining only first exits). We define pharma startups as those working across drug delivery, drug development, and drug manufacturing. Medical devices, digital health companies, and diagnostics are not included.
Annual pharma exit trends
Annual pharma exits reached a 4-year high in 2015 with 201 exits spread across 129 M&A deals and 72 IPOs. Last year was roughly on par with 2015, coming in at 193 exits. And 2017 has so far seen 83 first-time exits of pharma companies, spread over 50 M&A deals and 33 IPOs.
The past 4 years have seen a marked increase in first-time M&A activity of private pharma companies and a steady decline in IPOs. In 2016, there were 140 first-time M&A deals to pharma companies, up 8.5% over 2015. This year, though, M&A activity is somewhat depressed, with only 50 so far through 06/22/17.
IPOs continued to drop last year, down 27% in 2016. But this year is off to a stronger start with 2017 seeing 33 IPOs year-to-date. A few notable deals this year include the $1.5B IPO of Switzerland-based Idorsia in June, the $968M IPO of Tiansheng Pharma in May, the $607M IPO of Athenex in June, and the $482M IPO of Jounce Therapeutics in January.
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