Pharma and medtech sectors struggle in first half of 2016
Falling stock markets, political uncertainty and continued global economic weakness all contributed to a mixed first half, says market intelligence firm, Evaluate.
Falling stock markets, political uncertainty and continued global economic weakness all contributed to a mixed first half for the pharma and medtech industries. While M&A activity and drug approvals remained buoyant, falling equity markets in the first months of the year had a clear impact on IPO and venture financing for pharma. Similarly, the first half of 2016 saw no end to the worrying developments in the medtech industry, with the venture crisis worsening and the IPO window all but shut. The second half promises further turmoil with nervousness growing ahead of the US presidential elections - both candidates have promised to train their sights on the healthcare sector - according to first half reviews of 2016 from EP Vantage, the editorial arm of life science market intelligence firm Evaluate.
Pharma & Biotech Half-Year Review 2016 Highlights:
“Concerns about the pressures on drug prices continue to scare investors, who also have tepid economic recoveries in the west and a slowdown in China to grapple with,” said Amy Brown, author of the pharma report. “There are no obvious triggers on the horizon to improve matters, meaning these trends could deepen over the remainder of the year. However, it is not all doom and gloom, as many companies remain well capitalised. The sector is a long way from plunging into the depths of the last recession.”
Medtech 2016 Half-Year Review Highlights:
“While concerning developments plagued the medtech industry during the first half of 2016, the sector could be moving away from megadeals and back to mid-sized acquisitions which would be beneficial for smaller groups,” said Madeleine Armstrong, author of the medtech report. “The fundamental problem is a dearth of funding for young companies, which leads to a lack of new products and a dip in the quality of innovation available for acquisition by bigger players. The rest of 2016 is shaping up to be rocky, but delivering innovation to patients and returns to investors are key to the health of the industry.”
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