Many of the world’s most valuable pharma companies have increased their dealmaking into European startups in 2024.
Six of the ten biggest pharma companies by market capitalisation have completed more deals so far this year than they did in 2023, according to data provided by the companies, Sifted data and comparable data from Dealroom.
A seventh tells Sifted it expects its deal count in 2024 and 2025 to surpass 2023 levels.
Among them are the venture arms of Germany’s Merck, Switzerland’s Novartis, the UK’s AstraZeneca and the US’s Johnson & Johnson, Amgen, AbbVie and Pfizer.
The majority of the deals are in biotech — and pharma’s renewed interest follows a resilient couple of years for the sector in Europe.
While funding across the region’s tech sector as a whole fell by nearly half between 2021 and 2023, according to Dealroom, in biotech it fell by just a third. Funding for 2024 is on track to match or slightly exceed last year.
Upping investment
Those positive market signals are having a knock-on impact, says Hakan Goker, managing director of Merck’s corporate venture arm M Ventures.
“Europe’s historical challenge has been the lack of growth capital for those companies that are executing early- and mid-stage clinical trials,” he tells Sifted. “This is now changing. Recently, we have seen positive developments with multiple European VCs raising larger funds allocated for growth.”
Goker adds that M Ventures plans to do more late-stage deals in Europe.
Some VCs tell Sifted that they’re doing more biotech deals because of increased exit opportunities brought about by pharma companies trying to find new revenue streams ahead of an upcoming “patent cliff” — which will see several revenue-driving drug patents expire.
It’s an “unprecedented opportunity”, said Earlybird principal Christoph Massner, when the fund announced a €173m close of its second healthtech fund in February. “[Pharma companies] know they need to buy now.”.
“The encouraging trend of large acquisitions (and thus returns) is attracting LPs to the biotech sector,” Rémi Droller, managing director at Kurma Partners — which closed €140m of a new fund earlier this month, told Sifted. “Acquisitions will continue to drive interest in the sector.”
Who’s co-investing?
Big pharma companies aren’t all that keen on teaming up on deals. Of the 40 startups that Sifted tracked to have received backing from the 10 most valuable in 2024, just six saw pharma companies co-invest.
The most active co-investor was M Ventures, co-investing in four deals with Novo Holdings, Johnson & Johnson Innovation, AbbVie Ventures, Pfizer Ventures and Eli Lilly.
The only investors to co-invest together more than once were Novo Holdings and Johnson & Johnson Innovation, who were both involved in Swiss alzheimer’s treatment discovery startup Asceneuron’s $100m Series C in July and Swedish cancer drug discovery startup Asgard Therapeutics’s €30m Series A in March.
Big pharma’s European deals 2024
Sifted reached out to all the companies mentioned below to confirm figures. Sifted and Dealroom data was pulled on October 8.
Novo Holdings — Copenhagen, Denmark
2024 deals (Sifted data): 11
2023 deals (Dealroom data): 13
2024 average deal size (Sifted data): £35m
Notable 2024 deals:
- Led Swiss alzheimer’s treatment discovery startup Asceneuron’s $100m Series C, July
- Co-led UK cancer treatment startup Myricx Bio’s £90m Series A, July
- Swedish drug discovery startup Asgard Therapeutics’s €30m Series A, March
Earlier this year, Novo Holdings told Sifted that it spends $1bn–2bn a year investing in and building healthtech startups. It’s also earmarked €188m to build a quantum startup ecosystem in Denmark.
Novo Holdings is the parent company of Novo Nordisk — which has seen its valuation skyrocket following the release of weight loss drugs like Ozempic. Novo Holdings makes investment decisions independently of its pharma arm — but is a major shareholder in Novo Nordisk and controls 77% of voting rights.
Novo Holdings has patents expiring for semaglutide, the active ingredient in Ozempic and Wegovy, in China in 2026, Europe in 2031 and the US in 2032.
The company declined Sifted’s request for information.
M Ventures — Darmstadt, Germany
2024 deals (Provided by company): 12
2023 deals (Provided by company): 15
2024 average deal size (Sifted data): £36m
Notable 2024 deals:
- Led British drug discovery biotech LabGenius’s £35m Series B, May
- Co-led British cancer treatment startup Enara Bio’s $32.5m Series B, October
- Swiss alzheimer’s treatment discovery startup Asceneuron’s $100m Series C, July
Merck’s CVC M Ventures was founded in 2009 — 341 years after the pharma company — and invests the majority of its capital into the health and biotech sectors.
M Ventures tells Sifted it invests in startups that align with “strategic interests”, ranging from drug discovery companies to platform tools for pharma and the future of computing.
It’s also paying closer attention to more late-stage deals. The company says it’s contributed to 3 €50m+ rounds in the past 18 months.
Merck has patents set to expire for its cancer medicine Keytruda in 2028, which brought in about $25bn in sales in 2023.
Johnson & Johnson Innovation (JJDC) — Cambridge, US
2024 deals (Provided by company): 5 new deals
2023 deals (Provided by company): 2 new deals
2024 average deal size (Sifted data): £36m
Notable 2024 deals:
- Dutch cancer treatment company Flindr Therapeutics’s €20m Series A, April
- Led Swiss precision medicine discovery startup Bright Peak Therapeutics’s $90m Series C, June
- Co-led Swedish cancer treatment startup Asgard Therapeutics’s €30m Series A, March
JJDC invests directly off parent company Johnson & Johnson’s balance sheet, from seed to later-stage rounds.
It looks to back startups working on new medicines in the fields of immunology, oncology and neuroscience, alongside medtech companies in the surgery, orthopaedics and vision verticals. The company’s venture capital investments globally, including in the EMEA region, are led by Chris Picariello, president of JJDC.
Johnson & Johnson’s patent on Stelara — which is approved to treat plaque psoriasis, psoriatic arthritis, Crohn’s disease and ulcerative colitis — expired last year. The drug made the company $10.9bn in sales in 2023.
JJDC did not respond to Sifted’s request for follow-on deal numbers and only provided deal count for new deals.
Novartis Venture Fund — Basel, Switzerland
2024 deals (Sifted data): 5
2023 deals (Dealroom data): 2
2024 average deal size (Sifted data): £37m
Notable 2024 deals:
- German cancer therapeutic startup Catalym’s $150m Series D, July
- British neurodegenerative disease treatment discovery startup LoQus23 Therapeutics’s £35m Series A, October
- British drug discovery startup Enterprise Therapeutics’s $26m Series B, January
The Novartis Venture Fund writes tickets of $5m-10m and mostly focuses on seed and Series A deals. It tells Sifted it manages more than $750m in committed capital and has more than 40 portfolio companies across Europe and North America — but declined Sifted’s request for information on deal count.
While Novartis is currently contesting several patents to extend exclusivity on heart failure drug Entresto, which was its second best selling drug in 2022, it expects generic copycats to enter the market in 2025.
Pfizer Ventures — New York, US
2024 deals (Sifted data): 5
2023 deals (Dealroom data): 4
2024 average deal size: £25m
Notable 2024 deals:
- Led British Curve Therapeutics’s £40.5m Series A, February
- British Grey Wolf Therapeutics’s €46m Series B extension, May
- Co-led British cancer treatment startup Enara Bio’s $32.5m Series B, October
Pfizer Ventures has $900m capital commitment for investment and backs companies at all stages. The company tells Sifted that about a third of its investments are in Europe.
Pfizer primarily backs startups working in its own core therapeutic areas: inflammation and immunology, internal medicine, oncology, anti-infectives and vaccines. The pharma company also tells Sifted it considers deals into companies in the platform technologies, diagnostics, drug delivery and pharmaceutical services verticals.
Four of Pfizer’s products are facing expiring patents between now and 2028, including anticoagulation medication Eliquis and breast cancer treatment Ibrance, which brought in 20% of total revenue in 2023.
Pfizer did not share deal count with Sifted.
Eli Lilly — Indianapolis, US
2024 deals (Sifted data): 3
2023 deals (Dealroom data): 3
2024 average deal size: £38m
Notable 2024 deals:
- UK cancer treatment startup Myricx Bio’s £90m Series A, July
- Belgian Augustine Therapeutics’s €17m Series A, June
- British NanoSyrinx’s £10m round, September
Eli Lilly declined Sifted’s request for information.
The maker of weight loss medications Mounjaro and Wegovy will be hoping the upcoming sales of those drugs offset the 31% of revenue it could end up losing to patent cliffs by 2030.
AstraZeneca — London, UK
2024 deals (Sifted data): 3
2023 deals (Dealroom data): 0
2024 average deal size (Sifted data): £57m
Notable 2024 deals:
- Swiss longevity startup SixPeaks Bio’s €80m convertible round, May
- British digital health company Huma’s $80m Series D, July
- Swedish biotech SmartCella’s €50m round, July
AstraZeneca did not respond to Sifted’s request for information.
The pharma company’s patent on its diabetes drugs Farxiga, which made it $5.8bn in revenue in 2023, is due to expire in 2025.
Roche Venture Fund — Basel, Switzerland
2024 deals (Sifted data): 2
2023 deals (Dealroom data): 2
2024 average deal size (Sifted data): £12m
Notable 2024 deals:
- Co-led British drug discovery startup Mission Therapeutics’s £12m round, March
- Swiss immunology startups GlycoEra’s undisclosed round, January
Roche declined Sifted’s request for information.
Roche’s best selling pharmaceutical product Ocrevus — which treats people with multiple sclerosis — is due to expire in many European countries in 2028 and the US by 2029.
AbbVie Ventures — Chicago, US
2024 deals (Sifted data): 1
2023 deals (Dealroom data): 0
2024 average deal size (Sifted data): £17m
Notable 2024 deals:
- German cancer care startup Disco Pharmaceuticals’s €20m seed round, January
AbbVie tells Sifted that it has participated in “several” VC rounds with European startups at seed and Series A stage in 2024, but declined to share specific numbers. The company says it looks to deploy more than $50m annually into 6-8 new investments globally, in the fields of immunology, oncology, neuroscience, eye care and aesthetics and platform technologies.
AbbVie’s patent for inflammatory medication Humira expired last year — the drug brought in $21bn revenue in 2022.
Amgen Ventures — Thousand Oaks, US
2024 deals (Sifted data): 1
2023 deals (Dealroom data): 0
2024 average deal size (Sifted data): $300m
Notable 2024 deals:
- British quantum computing company Quantinuum’s $300m round, January
Amgen Ventures did not respond to Sifted’s request for information.
The pharma company has 67% of revenue at risk over patent cliffs by 2030, with its top four products, including two cancer drugs, set to lose their patents.
Read the orginal article: https://sifted.eu/articles/big-pharma-european-startup-funding/
