Biotech

Business Development &amp; Licensing

Cell &amp; Gene Therapy

Contract Services

Diagnostics

Go-To-Market Strategy &amp; Business Cases

Investors

M&amp;A Diligence

Market Opportunity &amp; Competitive Analysis

Oncology

Portfolio Strategy &amp; Prioritization

Pricing Strategy &amp; Willingness to Pay

Primary Research

Abstract
The “Biopharma Confidence Index” is a forward-looking indicator designed to measure executives’ sentiment and confidence in the biopharma industry and key drivers in the industry. It covers biopharma-specific topics like M&amp;A and deal activity while also factoring in current economic and political factors. Kineticos launched a 15-minute online survey and gathered responses from 92 executive and senior-level respondents of biopharmaceutical companies. After analyzing the survey, confidence in Biopharma going into 2023 is low. Industry leaders are pessimistic about the rate of new IPOs for 2023 and fewer of their in-licensing timelines are on target. Now more than ever, early-stage biotech companies need a trusted partner to help with market opportunity assessments, commercial assessments, primary research, business development &amp; licensing, and portfolio strategies. Cutting spending, turning inward, and trying to wait out the storm can cause further delays. Instead, biotechs need to bring on third parties who have been through industry downturns before and can help them navigate strategically through to the other side.
 
Introduction
The life science industry is an evolving ecosystem. This ecosystem is defined by the network of interactions between biopharmaceutical companies, service firms, and diagnostics companies as well as the patients, providers, payers, and regulators that influence market dynamics.
Within the ecosystem, the biopharma segments operate in a relative state of conflict. While the path of bringing new products to market is highly regulated through a predictable FDA approval process, the industry also weathers an ongoing series of changes from one decade to the next.
As market dynamics shift, a company’s ability to succeed is dependent upon its CEO’s ability to navigate these changes while keeping the company on course toward commercializing its products. The C-suite—along with the industry overall—would benefit from an ongoing mechanism to measure confidence in the market consistently.
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BCI
The “Biopharma Confidence Index” is a forward-looking indicator designed to measure executives’ sentiment and confidence in the biopharma industry and key drivers in the industry. This confidence—or lack thereof—is defined by the degree of optimism within key business indicators.
These indicators include:
<ul>
<li>Economy</li>
<li>Capital Markets</li>
<li>M&amp;A and Deal Landscape</li>
<li>Regulatory Landscape</li>
<li>Political Landscape</li>
<li>Price Transparency</li>
<li>Reimbursement &amp; Access</li>
<li>Digital Health &amp; Technologies</li>
<li>Artificial Intelligence &amp; Machine Learning</li>
<li>Innovative Commercial Models</li>
<li>Value-Based Outcome Health</li>
<li>Real World Evidence</li>
<li>Talent &amp; Expertise</li>
</ul>
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Measuring confidence through these indicators over time will demonstrate an ebb and flow of market dynamics and confidence in the future success of companies and growth in the overall market.
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Research Specifications
Kineticos launched a 15-minute online survey and gathered responses from 92 executive and senior-level respondents of biopharmaceutical companies. The survey ran from July to August 2022. Most of the respondents were from North America, had clinical-stage assets only, and were focusing on rare diseases, immuno-oncology, or oncology.
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Report
The past two years have been difficult for the biotech industry, to say the least. 2021 saw a rise in the median and average late-stage venture capital valuations that rapidly fell in 2022. Compared to 2021, respondents are in- and out-licensing less. At the 2023 JP Morgan Healthcare Conference, several companies Kineticos met with expressed interest in out-licensing of non-core assets to conserve funds for the development of their most valuable programs.  In our survey, 60% of companies expressed an interest in out-licensing, while only 40% were looking to in-license assets.  The difference between in- and out-licensing interest reflects companies’ interest in conserving capital and in finding alternatives to the financial markets.  Given the circumstance, those companies that are in- and out-licensing reported more timelines that were not on target.
<img decoding="async" loading="lazy" class="alignnone wp-image-1378" src="https://kineticos3.wpengine.com/wp-content/uploads/2023/01/Picture1-1-300x144.png" alt="" width="785" height="377" srcset="https://kineticos3.wpengine.com/wp-content/uploads/2023/01/Picture1-1-300x144.png 300w, https://kineticos3.wpengine.com/wp-content/uploads/2023/01/Picture1-1-1440x693.png 1440w, https://kineticos3.wpengine.com/wp-content/uploads/2023/01/Picture1-1-768x370.png 768w, https://kineticos3.wpengine.com/wp-content/uploads/2023/01/Picture1-1-1536x739.png 1536w, https://kineticos3.wpengine.com/wp-content/uploads/2023/01/Picture1-1-2048x985.png 2048w" sizes="(max-width: 785px) 100vw, 785px" />
Graph 1. Percent of in-licensing and out-licensing timelines on target for Q1 of 2021 and Q3 of 2022
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Kineticos Life Sciences has been surveying biopharmaceutical executives in the industry since 2015. The COVID-19 pandemic shook confidence early in the pandemic, was buffered by vaccine authorization, and came back with a vengeance with the Delta variant. Now, 12 months after the 2021 report, the number of respondents with high confidence is at an all-time low. Some argue that too many companies were created in 2020 &#8211; 2021 (with excessive valuations) and 2022 sentiment reflects a correction in the marketplace.  Our belief is that these low confidence numbers are due to macroeconomic conditions.  There has been tremendous innovation in the biopharmaceutical industry over the past year, particularly in the cell &amp; gene therapy space, and in treatments for oncology, neurology, and rare diseases.  We expect the biopharmaceutical sector to show a much stronger-than-average rebound as the economy improves reflecting the advancements and value of the industry’s technology.
<img decoding="async" loading="lazy" class="alignnone wp-image-1360" src="https://kineticos3.wpengine.com/wp-content/uploads/2023/01/Picture5-300x174.png" alt="" width="784" height="455" srcset="https://kineticos3.wpengine.com/wp-content/uploads/2023/01/Picture5-300x174.png 300w, https://kineticos3.wpengine.com/wp-content/uploads/2023/01/Picture5-1440x835.png 1440w, https://kineticos3.wpengine.com/wp-content/uploads/2023/01/Picture5-768x445.png 768w, https://kineticos3.wpengine.com/wp-content/uploads/2023/01/Picture5-1536x891.png 1536w, https://kineticos3.wpengine.com/wp-content/uploads/2023/01/Picture5-2048x1188.png 2048w" sizes="(max-width: 784px) 100vw, 784px" />
Graph 2. Percent of biopharma executive respondents with high overall confidence in the next 12 months.
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2022 saw the largest percentage year-to-year drop in biotech IPOs since the Great Recession of 2008.  From 96 biotech IPOs in 2021, that number had fallen to just 17 in 20221,3.  Respondents to our survey believe the instance of IPOs will remain flat over the next 12 months (the actual value from our survey was a decrease of 6%). While the overall market is a drag on biotech, the healthcare industry has typically not seen the drops reflected in other parts of the market.  In our review of previous market downturns, they typically last 18 months, and given there were signs of a downturn at the beginning of 2022 we expect the biotech market to open up in the second half of 2023.  Biotech companies are currently in a conservative mode weathering the economic storm, but they need to be ready for when the financing window reopens with a sound strategy and fully developed business plan.
<img decoding="async" loading="lazy" class="alignnone wp-image-1379" src="https://kineticos3.wpengine.com/wp-content/uploads/2023/01/Picture2-2-300x174.png" alt="" width="784" height="455" srcset="https://kineticos3.wpengine.com/wp-content/uploads/2023/01/Picture2-2-300x174.png 300w, https://kineticos3.wpengine.com/wp-content/uploads/2023/01/Picture2-2-1440x835.png 1440w, https://kineticos3.wpengine.com/wp-content/uploads/2023/01/Picture2-2-768x445.png 768w, https://kineticos3.wpengine.com/wp-content/uploads/2023/01/Picture2-2-1536x891.png 1536w, https://kineticos3.wpengine.com/wp-content/uploads/2023/01/Picture2-2-2048x1188.png 2048w" sizes="(max-width: 784px) 100vw, 784px" />
Graph 3. The number of IPOs and the amount raised ($ millions) for biotech IPO activity from 2011-2021.
<img decoding="async" loading="lazy" class="alignnone wp-image-1361" src="https://kineticos3.wpengine.com/wp-content/uploads/2023/01/Picture6-300x185.png" alt="" width="785" height="484" srcset="https://kineticos3.wpengine.com/wp-content/uploads/2023/01/Picture6-300x185.png 300w, https://kineticos3.wpengine.com/wp-content/uploads/2023/01/Picture6-1440x886.png 1440w, https://kineticos3.wpengine.com/wp-content/uploads/2023/01/Picture6-768x473.png 768w, https://kineticos3.wpengine.com/wp-content/uploads/2023/01/Picture6-1536x945.png 1536w, https://kineticos3.wpengine.com/wp-content/uploads/2023/01/Picture6-2048x1260.png 2048w" sizes="(max-width: 785px) 100vw, 785px" />
Graph 4. Average percent change of new IPOs over the next 12 months. Data are from April 2020, August 2020, January 2021, and August 2022.
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Respondents to our survey believe that M&amp;A will pick up by 18% in the next 12 months. Deal activity was certainly down in the latter half of 2022, so it seems it can only go up.  Further, given low valuations in both public and private biotechs, and challenges for smaller companies attracting follow-on financing, coupled with large pharma being relatively flush with cash and viewing patent cliffs in their current portfolios, we expect to see deal-making pick up dramatically.
The advancements of new modalities of treatments in oncology and recent drug approvals in neurology and neuropsychiatric disease make these indications attractive for M&amp;A and partnership activity. These indications led to deal-making in 2022 (Nature Reviews) and we see strong interest continuing for these indications in 20232.
<img decoding="async" loading="lazy" class="alignnone wp-image-1362" src="https://kineticos3.wpengine.com/wp-content/uploads/2023/01/Picture7-300x193.png" alt="" width="785" height="505" srcset="https://kineticos3.wpengine.com/wp-content/uploads/2023/01/Picture7-300x193.png 300w, https://kineticos3.wpengine.com/wp-content/uploads/2023/01/Picture7-1440x927.png 1440w, https://kineticos3.wpengine.com/wp-content/uploads/2023/01/Picture7-768x494.png 768w, https://kineticos3.wpengine.com/wp-content/uploads/2023/01/Picture7-1536x989.png 1536w, https://kineticos3.wpengine.com/wp-content/uploads/2023/01/Picture7-2048x1319.png 2048w" sizes="(max-width: 785px) 100vw, 785px" />
Graph 5. Average percent change of M&amp;A activity over the next 12 months. Data are from April 2020, August 2020, January 2021, and August 2022.
<img decoding="async" loading="lazy" class="alignnone wp-image-1380" src="https://kineticos3.wpengine.com/wp-content/uploads/2023/01/Picture1-300x120.jpg" alt="" width="785" height="314" srcset="https://kineticos3.wpengine.com/wp-content/uploads/2023/01/Picture1-300x120.jpg 300w, https://kineticos3.wpengine.com/wp-content/uploads/2023/01/Picture1.jpg 624w" sizes="(max-width: 785px) 100vw, 785px" />
Figure 1. Breakdown of biopharma dealmaking by therapeutic area in 2022. Source: Nature Reviews2
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Conclusion 
Now more than ever, early-stage biotech companies need a trusted partner to help with market opportunity assessments, commercial assessments, primary research, business development &amp; licensing, and portfolio strategies. Cutting spending, turning inward, and trying to wait out the storm can cause further delays. Instead, biotechs need to bring on third parties who have been through industry downturns before and can help them navigate strategically through to the other side. Partners can help with pivoting from ABC to XYZ to prepare for when VC valuations rise again. Meanwhile, the competition will be at a disadvantage because they lacked the confidence to make executive decisions during the downturn.  
 
 
Sources
<ol>
<li>DeFrancesco L, Lähteenmäki R. Public biotech in 2021 — the numbers. Nature Biotechnology. 2022;40(10):1427–1427. doi:<a href="https://doi.org/10.1038/s41587-022-01496-8">10.1038/s41587-022-01496-8</a></li>
<li>Giglio P, Micklus A. Biopharma dealmaking in 2022. Nature Reviews Drug Discovery. 2023 Jan 11 [accessed 2023 Jan 12]. <a href="https://www.nature.com/articles/d41573-023-00012-0">https://www.nature.com/articles/d41573-023-00012-0</a>. doi:<a href="https://doi.org/10.1038/d41573-023-00012-0">10.1038/d41573-023-00012-0</a></li>
<li>Ritter JR. Initial Public Offerings: Biopharma (Biotech and Pharma) IPOs Through 2022. Warrington College of Business University of Florida. 2023 Jan 5.</li>
</ol>

After analyzing the survey, confidence in Biopharma going into 2023 is low. Industry leaders are pessimistic about the rate of new IPOs for 2023 and fewer of their in-licensing timelines are on target. Now more than ever, early-stage biotech companies need a trusted partner to help with market opportunity assessments, commercial assessments, primary research, business development & licensing, and portfolio strategies.

Kineticos launched an online survey to measure confidence in the biopharma market for Q3 of 2022

2022 Q3 Biopharma Confidence Index Data &ndash; Kineticos

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CEO Biopharma Confidence Index

2022 Q3 Biopharma Confidence Index Data

Kineticos

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Executives overall confidence in the biotechnology industry has dropped to a level similar to the start of the pandemic. Economic risks continue to decline as we approach the 1-year mark since the start of the pandemic and M&amp;A activity continues to soar.

Executives overall confidence in the biotechnology industry has dropped to a level similar to the start of the pandemic. Economic risks continue to decline as we approach the 1-year mark since the start of the pandemic and M&A activity continues to soar.

Executives overall confidence in the biotechnology industry has dropped to a level similar to the start of the pandemic.

Kineticos Life Sciences | 2021 Q3 Biopharma Confidence Index Data

2021 Q3 Biopharma Confidence Index Data

Executives’ confidence in the industry was shaken early in 2020 due to the impact of the COVID-19 pandemic. Yet, this survey (January 2021) shows that confidence has rebounded and even surpassed current levels, showing the highest level of confidence since data collection began in 2015.  
To watch the panel discussion, click here: <a href="https://www.kineticos.com/resources/videos/the-2021-q1-biopharma-confidence-index-panel-discussion">https://www.kineticos.com/resources/videos/the-2021-q1-biopharma-confidence-index-panel-discussion</a>

Executives’ confidence in the industry was shaken early in 2020 due to the impact of the COVID-19 pandemic. Yet, this survey (January 2021) shows that confidence has rebounded and even surpassed current levels, showing the highest level of confidence since data collection began in 2015.  

Executives’ confidence was shaken early in 2020 due to the impact of the COVID-19 pandemic but, our survey shows that has rebounded & at its highest levels since data collection began in 2015.

Kineticos Life Sciences | 2021 Q1 Biopharma Confidence Index Data

2021 Q1 Biopharma Confidence Index Data

Confidence in the biotechnology industry rebounded after the dip in April 2020 due to the COVID-19 pandemic. Confidence in commercial activities has also increased, including more innovative models and higher confidence in internal capabilities of field sales/MLS.

Confidence in the biotechnology industry rebounded after the dip in April 2020 due to the COVID-19 pandemic. Confidence in commercial activities has also increased, including more innovative models and higher confidence in internal capabilities of field sales/MLS. 

Confidence in the biotechnology industry rebounded after the dip in April 2020 due to the COVID-19 pandemic.

Kineticos Life Sciences | 2020 Q3 Biopharma Confidence Index Data

2020 Q3 Biopharma Confidence Index Data

In the first of a set of weekly discussion panels, moderator Philip Gialenios (Kineticos) and panel members Aman Khera (Worldwide Clinical Trials), Dan McCormick (Kineticos), Kevin Hampton (Kineticos), and Tom Zietlow (Kineticos) join to discuss the insights gleaned from the 2020 Q1 Biopharma Confidence Index Survey, and the confidence of the respondents regarding their company’s capabilities to address specific critical development functions.

In the first of a set of weekly discussion panels, moderator Philip Gialenios (former president and COO of Kineticos) and panel members Aman Khera (Worldwide Clinical Trials), Dan McCormick (Kineticos), Kevin Hampton (Kineticos), and Tom Zietlow (Kineticos) join to discuss the insights gleaned from the 2020 Q1 Biopharma Confidence Index Survey, and the confidence of the respondents regarding their company’s capabilities to address specific critical development functions.  

In the first of a set of weekly discussion panels, our panel discusses the insights gleaned from the 2020 Q1 Biopharma Confidence Index Survey.

Kineticos Life Sciences | Fundamentals of Running a Biopharmaceutical

Fundamentals of Running a Biopharmaceutical

In the second panel discussion, moderator Philip Gialenios (Kineticos) and panel members Aman Khera (Worldwide Clinical Trials), Dan McCormick (Kineticos), Kevin Hampton (Kineticos), and Tom Zietlow (Kineticos) discuss the insights gleaned from the 2020 Q1 Biopharma Confidence Index Survey regarding the impact of artificial intelligence, machine learning, and new technologies.

In the second panel discussion, moderator Philip Gialenios (former president and COO of Kineticos) and panel members Aman Khera (Worldwide Clinical Trials), Dan McCormick (Kineticos), Kevin Hampton (Kineticos), and Tom Zietlow (Kineticos) discuss the insights gleaned from the 2020 Q1 Biopharma Confidence Index Survey regarding the impact of artificial intelligence, machine learning, and new technologies. 

Our panel discusses the impact of artificial intelligence, machine learning, & new technologies gleaned from the 2020 Q1 Biopharma Confidence Index Survey.

Kineticos Life Sciences | Impact of AI, Machine Learning, & New Technologies in Biotech

Impact of AI, Machine Learning, and New Technologies

In the third panel discussion, moderator Philip Gialenios (Kineticos) and panel members Peter Benton (Worldwide Clinical Trials), Dan McCormick (Kineticos), Kevin Hampton (Kineticos), and Tom Zietlow (Kineticos) discuss the insights gleaned from the 2020 Q1 Biopharma Confidence Index Survey regarding raising capital and mergers and acquisitions.

In the third panel discussion, moderator Philip Gialenios (former president and COO of Kineticos) and panel members Peter Benton (Worldwide Clinical Trials), Dan McCormick (Kineticos), Kevin Hampton (Kineticos), and Tom Zietlow (Kineticos) discuss the insights gleaned from the 2020 Q1 Biopharma Confidence Index Survey regarding raising capital and mergers and acquisitions.

In the third panel discussion, moderator Philip Gialenios (Kineticos) and panel members Peter Benton (Worldwide Clinical Trials), Dan McCormick (Kineticos), Kevin Hampton (Kineticos), and Tom Zietlow (Kineticos) discuss the insights gleaned from the 2020 Q1 Biopharma Confidence Index Survey regarding raising capital and mergers and acquisitions.

Raising Capital and Mergers and Acquisitions &ndash; Kineticos

Raising Capital and Mergers and Acquisitions

In the fourth panel discussion, moderator Philip Gialenios (Kineticos) and panel members Aman Khera (Worldwide Clinical Trials), Dan McCormick (Kineticos), Kevin Hampton (Kineticos), and Tom Zietlow (Kineticos) discuss the insights gleaned from the 2020 Q1 Biopharma Confidence Index Survey regarding in- and out-licensing activities and CRO outsourcing.

In the fourth panel discussion, moderator Philip Gialenios (former president and COO of Kineticos) and panel members Aman Khera (Worldwide Clinical Trials), Dan McCormick (Kineticos), Kevin Hampton (Kineticos), and Tom Zietlow (Kineticos) discuss the insights gleaned from the 2020 Q1 Biopharma Confidence Index Survey regarding in- and out-licensing activities and CRO outsourcing.

In the fourth panel discussion, moderator Philip Gialenios (Kineticos) and panel members Aman Khera (Worldwide Clinical Trials), Dan McCormick (Kineticos), Kevin Hampton (Kineticos), and Tom Zietlow (Kineticos) discuss the insights gleaned from the 2020 Q1 Biopharma Confidence Index Survey regarding in- and out-licensing activities and CRO outsourcing.

In- and Out-Licensing Activities and CRO Outsourcing &ndash; Kineticos

In- and Out-Licensing Activities and CRO Outsourcing

In the fifth and final panel discussion, moderator Philip Gialenios (Kineticos) and panel members Aman Khera (Worldwide Clinical Trials), Dan McCormick (Kineticos), and Tom Zietlow (Kineticos) discuss the insights gleaned from the 2020 Q1 Biopharma Confidence Index Survey regarding Sales and Marketing Concepts, Political Pressures, and Overarching Economic Effects.

In the fifth and final panel discussion, moderator Philip Gialenios (former president and COO of Kineticos) and panel members Aman Khera (Worldwide Clinical Trials), Dan McCormick (Kineticos), and Tom Zietlow (Kineticos) discuss the insights gleaned from the 2020 Q1 Biopharma Confidence Index Survey regarding Sales and Marketing Concepts, Political Pressures, and Overarching Economic Effects. 

In the fifth and final panel discussion, moderator Philip Gialenios (Kineticos) and panel members Aman Khera (Worldwide Clinical Trials), Dan McCormick (Kineticos), and Tom Zietlow (Kineticos) discuss the insights gleaned from the 2020 Q1 Biopharma Confidence Index Survey regarding Sales and Marketing Concepts, Political Pressures, and Overarching Economic Effects.

Sales and Marketing Concepts, Political Pressures, and Overarching Economic Effects &ndash; Kineticos

Sales and Marketing Concepts, Political Pressures, and Overarching Economic Effects

COVID-19 has been a change agent in four areas of the biopharma industry: digital technology, artificial intelligence (AI) and machine learning, regulation, and real-world evidence. In this two-part survey, the impact of the pandemic and its substantial influence on biopharma executives’ expectations in these areas is apparent.

COVID-19 has been a change agent in four areas of the biopharma industry: digital technology, artificial intelligence (AI)  and machine learning, regulation, and real-world evidence. In this two-part survey, the impact of the pandemic and its substantial influence on biopharma executives’ expectations in these areas is apparent. 


The two-part survey shows the impact of COVID-19 in the biopharma industry and its influence on biopharma executives’ expectations.

Kineticos Life Sciences | C-Suite Survey Underscores Digital Technology’s Growing Role in Clinical Trials

C-Suite Survey Underscores Digital Technology’s Growing Role in Clinical Trials

In this two-part survey, Kineticos Life Sciences explores the changes in perceptions and approaches to clinical research over six months (pre-COVID and amid the pandemic) through a set of 259 questions posed to C-Suite executives.

In this two-part survey, Kineticos Life Sciences explores the changes in perceptions and approaches to clinical research over six months (pre-COVID and amid the pandemic) through a set of 259 questions posed to C-Suite executives.

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