Green shoots and cautious optimism: Insights from BIO-Europe Spring

With thousands of pharma and biotech dealmakers attending last months’ BIO-Europe Spring, appetite for partnering looked alive and well. But what are those leading the way in scouting, negotiating, and securing tomorrow’s partnerships saying about how the deal-making landscape is shaping up in 2024?

Over the three days of the conference, I spoke with ambitious innovators, industry leaders, entrepreneurs, and investment experts – here’s what I learned.

The long, cold winter of 2023 is over and spring is in the air

After a relatively long run of slowed activity and economic headwinds in 2023, most projections made at the beginning of 2024 cautiously suggested we would be seeing green shoots of recovery in the deal-making space.

Sentiment on the ground at BIO-Europe Spring mirrored this optimism: spring is most definitely in the air. Innovators and industry leaders alike are talking about ‘recovery momentum’, with more favourable economic conditions setting the stage for a lively and evolving landscape this year.

‘Right fit’ must come before ‘right now’

Though the overriding sentiment coming out of the event was that deal-making is coming out of the doldrums, it won’t all be plain sailing ahead.

The pharma industry is facing big challenges, including upcoming patent cliffs, ongoing legislative discussions, and a need to replenish pipelines.

Given these headwinds, there will be great temptation to start a buying or deal-making spree to refill those innovation pipelines, as the market improves and valuations are still down. Perhaps the biggest challenge for acquiring companies will be showing restraint, ensuring they do ‘the right deals’, and are not lured by the siren song of what is on trend, exciting or affordable right now. In deal-making, we reap what we sow – and the seeds we sow today have the potential to determine our strength and shape our success for many seasons to come.

That’s why a strategic view to building partnerships is so important.

Remember to tend to the garden you have, don’t just rush to plant a new one

In a resurgent market, we must avoid falling into the trap of reaching for something new at the expense of nurturing what we already have.

I spoke with several savvy dealmakers who noted their priority is now taking stock of what they signed in the last 12 months – evaluating how well these acquisitions or partnerships are integrating and progressing. This is important for two reasons.

First, armed with this information, you will be in a much stronger position to gauge strategic fit. Looking beyond short-term wins to long-term opportunity is key in delivering innovation that offers positive, sustainable, and meaningful value to patients. For example, Astellas’ acquisition of Iveric Bio in 2023 brought in leading development, medical, commercial, and regulatory capabilities in ophthalmology that complemented our innovation expertise in blindness and regeneration. Enterprise-level adoption of knowledge and technologies gained from such deals shapes broader work across R&D and business development, fuelling progress.

Second, as deal-making appetite and opportunities increase, it will also demand a higher level of discretion to avoid stretching yourself too thinly. Pursuit of new opportunities must be preceded by asking ourselves: “Have we done all we can to ensure recently signed partnerships are receiving the attention and support necessary for success”?

Overcoming the bottleneck in Series A funding

At the start of 2024, some – including myself – predicted Series A funding would be the first form of investment to recover as big pharma and investors pursued promising early-stage innovation. What I have seen in practice has been quite different. While the NASDAQ has bounced back – largely due to big pharma merger and acquisition deals boosting market confidence – the benefits haven’t yet seemed to trickle down to seed and Series A financing.

There still seem to be some roadblocks in this regard, in my view driven by a lack of confidence in funding the earliest stages of innovation. While the challenge this poses is very real, it is one that we can overcome.

My prediction is that the ongoing stream of pharma deals and acquisitions, along with the public market recovery we are seeing already, will likely drive an increase in confidence and investment upstream. This will create new investment vehicles and remove roadblocks, helping to restore confidence in the market and drive recovery at the seed and Series A level in the second half of 2024. Maybe even earlier.

Unlocking Europe’s innovation potential

Beyond predictions and trends, I was enormously encouraged to witness our vibrant European innovation community in action at BIO-Europe Spring.

There is strength in numbers. But there is also strength, ingenuity, and real power in diversity. No individual European cluster – the Golden Triangle in the UK, Medicon Valley in Scandinavia, or the hubs in Catalonia, Benelux, and Italy – can yet claim to rival the critical mass of the US innovation ecosystem. But by building bridges and working together at a continental level, rather than purely nationally or locally, Europe’s innovation community is becoming an increasingly strong, creative, and dynamic force to be reckoned with.

Bearing fruit for patients

Growth is returning and green shoots are emerging, but we must nurture them through smart collaborations, tenacity, and a clear, long-term strategic view. If we do so, they will bear fruit, helping us to unlock the potential of the transformational science underway across the region – and, ultimately, transforming the lives of patients worldwide.