Total financing: $200 million
Number of deals: 10
Top financing location: US
The global macroeconomic environment has hit shaky ground in the last year as investments and fundraising across many sectors have seen a major dip. This has been particularly apparent across the biotech industry, which saw a major downfall following the all-time highs of 2021.
The longevity market, despite its unprecedented growth over the last 10 years, hasn’t been unaffected by the recent economic and geopolitical turmoil. As we come to the end of Q1 of 2023, we take a look at the emerging trends from this quarter and make predictions for the coming year.
Longevity leaders weigh in on investment downturn
So, what do longevity founders and investors make of the current state of the investment market? We caught up with some of the key figures in the sector for their thoughts:
“Over the long term, I’m bullish on biotech in general and longevity in particular. The patterns in longevity investment in 2023 reflect broader trends in the market, and certainly biotech has seen—and recovered from—fluctuations like this before. Diseases of aging represent a vast unmet medical need, and innovations based on longevity science are unlocking new therapeutic approaches to serve this huge market.”
– Kristen Fortney, CEO and co-founder of BioAge
“It is frustrating that investment flows into longevity science have stalled in the past year, but I am sure this is a temporary phenomenon. At Juvenescence, we have never had so much interest in what we are doing.”
– Jim Mellon, investor and deputy chairman of Juvenescence
“Longevity is a long-term trend that will pass through many economic cycles. Nevertheless, this environment leads to а more selective approach by investors as well as startups. Companies have to prioritize their best and most promising pipeline programs (in other words, reducing their shots on goal). While some of the companies will likely not survive, those that have strong scientific and clinical milestones, supported by investors, will get through this with sufficient cash runway until their value inflection points. This is obviously a challenging time, but in the end, it should make the longevity sector stronger.”
– Sergey Young, founding partner of Longevity Vision Fund
“The longevity VC market will decouple from the currently pressured classical VC financial markets as soon as the first therapeutic rejuvenation approaches have been proven to work. Then it will become obvious that, beyond classical medical approaches that are geared towards curing a disease, it is possible to target the entire western world with preventive therapies against age-related diseases.”
– Michael Greve, CEO and founder of the Forever Healthy Foundation
“LTF is raising its second fund and is not actively deploying capital yet. The problem is rooted all over the money chain. Most LPs have frozen their activity to wait and see what will happen on the global market. But we start seeing recovery signals from realizing that startup valuations bottomed out. I expect an upsurge in the third Q this year.”
– Petr Sramek, co-founder and managing partner of LongevityTech.fund
“Proven scientific and technological advancements will prevail in securing vital funding for the longevity industry. While changing economic conditions may present challenges for longevity startups of all stages, the significance of reliable data and background cannot be overstated. Right now, investment bodies are pursuing data-driven decision-making and thorough due diligence, moving past the inflated valuations of two years ago. Sound business and scientific proof will always guide the market’s success.”
– Sergey Jakimov, founding partner of LongeVC
The longevity market has enjoyed an exponential growth over the last 10 years. 2021 was the peak year for longevity, reflecting the wider trends seen across biotech, pharmaceutical and biomedical sectors. The strong demand fuelled by the COVID-19 pandemic, created significant investment and activity across these sectors.
The year 2022 also saw substantial financing of $5.4bn [Figure 1; Figure 2]. However, majority of the financing was attributed to the $3bn Altos deal [covered in detail in our 2022 Annual Report].
Bank turmoil hasn’t helped
It appears that overall, the total financing and investment has dropped off in 2022. The year 2023 will likely see the biotech industry take a further hit following the recent news on the collapse of Silicon Valley Bank (SVB) and Credit Suisse. SVB acted as a major lender to many technology and life science startups who have relied on its financial services and support. The fall of the bank will lead to a shortage of available capital services and therefore slow down the innovation and investment. New and emerging companies are most likely to be most affected.
The recent collapse of Credit Suisse also caused concern for global markets. Credit Suisse is one of only 30 lenders considered ‘globally systemic banks’, ranks as one of the world’s larger wealth managers and is the private bank for many entrepreneurs, rich and ultra rich individuals and companies. Although the UBS rescue buyout of Credit Suisse bank has been announced in attempt to prevent its failing, the ripple effect has already been felt across the global stock market. It may take a while for the markets to recalibrate.
Annual total financing last 10 years
Figure 1. Longevity companies financing activity 2013-2022 in $bn. Deal types included in analysis are: Accelerator/Incubator, Angel, Corporate, Early Stage VC, Later Stage VC, Equity Crowdfunding, IPO, PE Growth/Expansion, PIPE, Public Investment 2nd Offering and Seed Round. Analysis by Longevity.Technology, according to Pitchbook data as of 31st March 2023, based on 491 companies.
Number of deals in last 10 years
Figure 2. Longevity companies and number of deals 2013-2022. Deal types included in analysis are: Accelerator/Incubator, Angel, Corporate, Early Stage VC, Later Stage VC, Equity Crowdfunding, IPO, PE Growth/Expansion, PIPE, Public Investment 2nd Offering and Seed Round. Analysis by Longevity.Technology, according to Pitchbook data as of 31st March 2023, based on 491 companies.
Longevity: the need hasn’t magically gone away
The one important aspect to consider here is that the need for new and innovative longevity therapies and technologies isn’t going to see a deceleration any time soon. For the longevity sector in particular, the rising pressure of an aging population and the demographic revolution that will follow, will continue to drive the demand for innovation. The environment for new startups will be tough for the foreseeable future – however, the question is not if the investment activity will recover, but rather when.
Longevity companies have seen the lowest financing activity in Q1 of 2023 when compared with the last 4 quarters, marked by the fewest number of deals. With only 10 deals since the beginning of the year, a drop of at least 30%, when compared with the total number of deals across Q1-Q4 of last year, is already evident [Figure3; Figure4].
Equally, the total financing for Q1 this year has been one of the lowest since 2013 [Figure5]. Since Q1 2013, which saw a total financing of $0.2bn, there has been a rise in the total financing.
Q1 2021 saw a total financing of $1.33bn and Q1 2022, $3.7bn – that’s a 565% and 1750% increase, respectively. The exponential growth across this time period can be attributed to the rise of the silver tsunami, the advancements in biomedicine and the growing awareness and interest in the field of longevity, accompanied by a rise in the number of longevity company formations.
The drop-off is evident, both in terms of capital and company formations, and a result of the tail-end of the biotech boom.
Total financing by quarter Q1 2022-Q1-2023
Figure 3. Longevity companies financing activity by quarter from Q1 2022 – Q1 2023 in $bn. Deal types included in analysis are: Accelerator/Incubator, Angel, Corporate, Early Stage VC, Later Stage VC, Equity Crowdfunding, IPO, PE Growth/Expansion, PIPE, Public Investment 2nd Offering and Seed Round. Analysis by Longevity.Technology, according to Pitchbook data as of 31st March 2023, based on 491 companies.
Number of deals by quarter Q1 2022-Q1-2023
Figure 4. Longevity companies and number of deals by quarter from Q1 2022 – Q1 2023. Deal types included in analysis are: Accelerator/Incubator, Angel, Corporate, Early Stage VC, Later Stage VC, Equity Crowdfunding, IPO, PE Growth/Expansion, PIPE, Public Investment 2nd Offering and Seed Round. Analysis by Longevity.Technology, according to Pitchbook data as of 31st March 2023, based on 491 companies.
Q1 financing over the past 10 years
Figure 5. Longevity companies financing activity by Q1 2013 – Q1 2023 in $bn. Deal types included in analysis are: Accelerator/Incubator, Angel, Corporate, Early Stage VC, Later Stage VC, Equity Crowdfunding, IPO, PE Growth/Expansion, PIPE, Public Investment 2nd Offering and Seed Round. Analysis by Longevity.Technology, according to Pitchbook data as of 21st March 2023, based on 491 companies.
Deal sizes are holding-up
On the other hand, the average deal size is showing a much steadier trend [Figure 6], but with fewer deals, the spread across the data is far lower than in previous quarters, as is the overall number of sizeable deals. Nonetheless, the steady average is suggestive of at least a few significant deal sizes, suggesting some promise of larger investments [Table 1].
Average deal size ($mn) by quarter
Figure 6. Longevity companies median and average deal size in $mm by quarter. Deal types included in analysis are: Accelerator/Incubator, Angel, Corporate, Early Stage VC, Later Stage VC, Equity Crowdfunding, IPO, PE Growth/Expansion, PIPE, Public Investment 2nd Offering and Seed Round. Analysis by Longevity.Technology, according to Pitchbook data as of 31st March 2023, based on 491 companies.
Together, this suggests is that financing opportunities will remain, but investors are expected to be more selective about the companies in which they invest, with fewer large financing opportunities than in previous years.
Regulatory and structural challenges for the years ahead.
Apart from investment challenges, the regulatory environment has also become tougher, particularly in the US, which so far has enjoyed the majority of financing activity [Figure 7].
In 2022, the FDA approved 37 new drugs compared with 50 in 2021 and 53 in 2020 (Al-Faruque, 2023), and in recent months it has tightened its rules on Accelerated Approvals (Senior, 2023). The FDA is now asking for confirmatory trials and enrolling patients to be started prior to granting an accelerated approval. Companies should expect that as a result, the competition for approval is likely to be fiercer, and investors will need to do deeper due diligence.
Longevity supplement companies might have to face another hurdle – the race to the market between drugs and supplements. At the end of 2022 the United States Food & Drug Administration announced that a popular longevity supplement ingredient beta-nicotinamide mononucleotide (NMN) cannot be sold as a dietary supplement in the US. What underlies these new regulations is not a matter of the safety of NMN products but rather a set of criteria that prevent a supplement from being sold and marketed in the US if it has been “authorized for investigation as a new drug” (Sullivan, 2023). In the case of NMN, the FDA’s decision was driven by clinical-stage pharma company Metro International Biotech‘s which is researching NMN as a drug.
In essence, the new ruling protects the drug companies research investment, preventing supplement companies from selling the same ingredient as a lower-cost supplement. The current ruling has caused much upheaval across the supplement space, and pressure is mounting on FDA to reconsider this decision, in the case of NMN and any future cases.
Deals by location Q1 2023
Figure 7. Longevity companies financing activity by location in Q1 2023 as percentage of total. Deal types included in analysis are: Accelerator/Incubator, Angel, Corporate, Early Stage VC, Later Stage VC, Equity Crowdfunding, IPO, PE Growth/Expansion, PIPE, Public Investment 2nd Offering and Seed Round. Analysis by Longevity.Technology, according to Pitchbook data as of 31st March 2023, based on 491 companies.
Are more M&A deals on the horizon?
The biotech and pharma stocks have also been affected by the inflation pressures that have been hitting the economy, leading to increasing company operating costs, as well as the costs associated with running clinical trials. This has resulted in mass layoffs seen over the last year across the biotech sector as companies are decreasing their workforces to conserve cash (Bushak, 2023; Skerrett, 2023; Armstrong et al., 2023). The impact of a decreasing workforce can also be a challenge in itself, as companies are under increasing pressure to continue driving their development pipeline forward.
Although VC investment is still the main driver behind Q1s investment activity [Figure 8], VC investors are less likely to aggressively fund early-stage companies as before. The current difficult climate may lead to a spike in the number of M&A deals in 2023. As Big Pharma companies are still enjoying the large cash flow received during the pandemic, they may be particularly inclined to acquire smaller companies with promising and innovative pipelines. Many big pharma companies are also expected to lose their patents by 2030, meaning they are under increasing pressures to replace their pipelines of drugs to prevent major losses to revenue (Gibney, 2023). M&A deals with promising biotech companies that are struggling may provide a quicker solution than trying to develop internal portfolio of drugs and therapies.
Although we have not seen any M&A activity so far this year across the longevity industry, it will be interesting to see how this develops as the year goes on.
Has the ‘down round’ emerged yet?
No. A down round is when a company raises a financing round of venture capital funding and the pre-money valuation of the company is lower than the post-money valuation of the previous round. We haven’t seen any longevity down rounds from our analysis for 1Q23, however, should current trends continue there will be a few tricky board meetings ahead of the summer.
Deals by stage Q1 2023
Figure 8. Longevity companies financing by deal type in Q1 2023 as percentage of total. Deal types included in analysis are: Accelerator/Incubator, Angel, Corporate, Early Stage VC, Later Stage VC, Equity Crowdfunding, IPO, PE Growth/Expansion, PIPE, Public Investment 2nd Offering and Seed Round. Analysis by Longevity.Technology, according to Pitchbook data as of 31st March 2023, based on 491 companies.
Partnerships – an advantage in a difficult ecosystem?
Q1 of 2023 has seen a number of strategic partnerships forming between companies, as they leverage on the other’s resources to bring novel and strengthened assets and innovation to the industry. It is possible that in the difficult economic ecosystem, forming such partnerships is a way to improve the position in the market and gain a competitive advantage.
Here are our top 5 Q1 2023 partnerships:
- TruDiagnostic and NADMED launch new blood diagnostic in US.
Health data company TruDiagnostic has entered a new partnership with Finnish nicotinamide adenine dinucleotide (NAD) diagnostic company NADMED to launch a new NAD+ blood diagnostic test for patients in the US. Claimed to be the only CE-marked NAD+ testing product, the Q-NADMED Blood Kit can measure NAD+ and NADH from a small blood sample for several clinical applications.
- BlueRock Therapeutics to use Rune Labs’ clinical trial platform to better characterize Parkinson’s disease state in cell therapy trials.
Rune Labs, a precision neurology software and data platform company, today announced a partnership with BlueRock Therapeutics, a clinical stage biopharmaceutical company. BlueRock will use StriveStudy, Rune Labs’ clinical trial platform featuring data collection and patient monitoring tools, to capture a holistic and precise picture of Parkinson’s disease activity and to better engage patients in the study.
- Capsida and AbbVie strike $674mn gene therapy development deal.
Capsida and AbbVie announced an expanded strategic collaboration on Feb. 23, 2023. Building on a neurodegenerative disease partnership announced in 2021, the expanded partnership will see AbbVie work with Capsida’s novel adeno-associated virus (AAV) platform to identify and advance three programs. Capsida will lead capsid discovery efforts for all programs using its AAV engineering platform and will be responsible for process development and early clinical manufacturing. AbbVie will lead innovative therapeutic cargo approaches and be responsible for development and commercialization.
- NeuroSense partners with QuantalX for its Delphi-MD brain imaging technology.
NeuroSense Therapeutics has partnered with QuantalX Neuroscience to improve early diagnosis and treatment of neurodegenerative diseases. QuantalX is the developer of Delphi-MD brain imaging technology, a clinically objective neurodiagnostic medical device. QuantalX will use its Delphi-MD device for early diagnosis and ongoing monitoring of trial participants in NeuroSense’s Phase 3 trial of PrimeC. The trial will evaluate efficacy of Prime C in people living with amyotrophic lateral sclerosis (ALS), based on successful completion of its ALS Phase 2b trial.
- Oura partners with Hapbee Technologies to improve accuracy of its sleep data.
Hapbee Technologies, Inc. and the Finnish sleep wearables company Oura have partnered to leverage and combine their technology and offer more accurate elaborate sleep data to users. Hapbee announced the partnership on Tuesday and said that its Smart Sleep Pad and mobile application will now be able to provide customers with sleep recommendations based on data generated by the Oura Ring.
Longevity.Technology annual longevity report 2022 launch.
Earlier in the year, we publish our 2022 Annual Longevity Investment Report – a full-year report on the state of investment in the longevity sector. In our report, we have analysed the companies and investors behind technologies designed to not only extend our lifespan but also extend our healthspan – compressing morbidity to extend the number of years we live in good health.
Our new 2022 annual report shows longevity is out-trending biotech and fintech – and it’s not just the Altos effect.
Retro: A longevity biotech triple-threat?
Betts-LaCroix founded Retro in 2021 to develop cellular reprogramming, autophagy and plasma-inspired therapeutics, with the goal of increasing healthy human lifespan by 10 years. Last year, the company announced it had secured funding of $180 million from an undisclosed source, revealed last week to be Sam Altman, the CEO of OpenAI.
So, what is it about longevity that makes Betts-LaCroix tick as both a founder and an investor?
Petr Sramek: Now is the right time to invest in longevity.
We spoke to serial entrepreneur and investor Petr Sramek, co-founder and managing partner of LongevityTech.fund. The fund is now accepting new investors for its second fund, with a target fund size of $50 million up to a maximum of $100 million USD.
“Now is the right time to start investing in longevity, both in order to benefit from more favourable valuations, but also to help companies at a critical stage in the development of this market,” Sramek told us.
Cerevance’s $51mn boost takes Series B total to $116mn.
Bill Gates and Takeda have contributed $51 million to Cerevance, bringing the total funding for its Series B round to an astounding $116 million.
“We are well positioned to continue to advance our clinical and pre-clinical programs and proprietary NETSseq platform. With this financing, we expect to reach several key clinical milestones across multiple disease areas with unmet needs” said Craig Thompson, CEO of Cerevance.
Cambrian Bio reveals new pipeline company with focus on AMPK activation
Amplifier Therapeutics is going after “one of the most sought-after drug targets in aging research”.
Mapping out the longevity investment landscape.
Longevity.Technology CEO Phil Newman shares his outlook for longevity investing, exploring longevity domains and categories and the clinical stages of longevity biotechs.
Al-Faruque, F. (2023) Researchers call on FDA to get tough on accelerated approval labeling, Regulatory Affairs Professionals Society (RAPS). Available at: https://www.raps.org/news-and-articles/news-articles/2023/3/researchers-call-on-fda-to-get-tough-on-accelerate (Accessed: March 28, 2023).
Senior, M. (2023) “Fresh from the Biotech Pipeline: Fewer approvals, but biologics gain share,” Nature Biotechnology [Preprint]. Available at: https://doi.org/10.1038/s41587-022-01630-6.
Bushak, L. (2023) Inflation will have the biggest negative impact on pharma industry in 2023: Survey, MM+M – Medical Marketing and Media. Available at: https://www.mmm-online.com/home/channel/inflation-will-have-the-biggest-negative-impact-on-pharma-industry-in-2023-survey/ (Accessed: March 28, 2023).
Skerrett, P. (2023) Is the golden age of biotech stocks over?, STAT. Available at: https://www.statnews.com/2023/01/10/is-the-golden-age-of-biotech-stocks-over/ (Accessed: March 28, 2023).
Armstrong, A., Masson, G. and Bayer, M. (2023) Fierce Biotech Layoff tracker 2023: Another layoff wave at EVOFEM; Neoleukin cuts 70% of staff, CEO, Fierce Biotech. Available at: https://www.fiercebiotech.com/biotech/fierce-biotech-layoff-tracker-2023 (Accessed: March 28, 2023).
Gibney, M. (2023) Biopharma M&A may get the push it needs in 2023, but with a face lift, PharmaVoice. Available at: https://www.pharmavoice.com/news/pharma-deals-mergers-acquisitions-forecast-partnering-2023/640190/ (Accessed: March 28, 2023).
Sullivan, D. (2023, February 24). FDA says NMN cannot be sold as a dietary supplement in the US. Longevity.Technology – Latest News, Opinions, Analysis and Research. Retrieved from https://longevity.technology/news/fda-says-nmn-cannot-be-sold-as-a-dietary-supplement-in-the-usa/