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Biotech in 2024: A retrospective
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Earlier this year, we collected expert insight into what the year 2024 would look like for biotech – from AI reshaping the industry, and CRISPR’s growth potential to strong merger and acquisition (M&A) activity – which of those predicted trends became a reality in 2024?According to Artem Trotsyuk, operating partner at LongeVC, “the biotechnology industry experienced significant shifts and innovations, reflecting a dynamic and evolving landscape.” David Del Bourgo, chief executive officer (CEO) of WhiteLab Genomics, describes 2024 as a year of cautious optimism for the biotech sector. “The industry rebounded from broader economic challenges in recent years, including macroeconomic instability. The focus has been on innovation-driven growth, with significant advancements in gene editing, cell and gene therapies, and AI-driven drug discovery. As of Q3 2024, a total of 32 gene therapies and 34 RNA therapies have been approved, according to the American Society of Gene and Cell Therapy (ASGCT), underscoring the rapid growth and regulatory progress in these advanced therapeutic modalities.”So what has it been – a triumphant 2024 or another year of cautious optimism? Without further ado, let’s delve into 2024 one last time before 2025.Table of contents2024, a year of biotech megadeals but not-so-strong M&A activityIn 2024, startups saw a notable resurgence in large-scale funding rounds. By May, over 100 startups had secured funding rounds of $100 million or more, already surpassing the number of such deals in 2023. And biotech startups were extremely well represented in this trend, as almost half of these deals fell into the biotech sector. The biotech megadeal trend kept on giving as The Wall Street Journal reported in August that 68 biotech startups across the U.S. and Europe had secured rounds surpassing $100 million, demonstrating renewed investor confidence in the sector. This surge highlights a positive shift following the funding constraints of 2022–2023.While mega-rounds increased, the total number of deals declined compared to previous years, signaling a quality-over-quantity approach by investors. This approach prioritized high-potential companies with robust pipelines or novel technologies, often at the expense of less mature or riskier ventures.Pharmaceutical M&A activity hit a low in 2024, with only 558 deals completed by late November, totaling $67.2 billion in value. This marked the lowest level of dealmaking in nearly a decade, reflecting cautious strategies among large pharmaceutical companies.“We saw a considerable decrease in the average M&A deal size across the industry. This was partially driven by high biotech valuations and political and macroeconomic uncertainty. The industry saw an increased focus on niche immunological indications with deals like Biogen acquiring HI-Bio and Vertex acquiring Alpine,” said Fady Riad, CEO at Centurion Life Sciences.In 2024, the biotech sector experienced a resurgence in public market activities, notably in initial public offerings (IPOs). After a subdued period, the year began with a promising uptick in biotech IPOs, with momentum building significantly by late summer. A remarkable instance was in September, when three companies – Bicara Therapeutics, Zenas BioPharma, and MBX Biosciences – collectively raised over $700 million on Nasdaq in a single day, signaling renewed investor confidence in the sector.Suggested Articles Can AlphaFold3’s open-source platform revolutionize the way we discover drugs? Are we in an AI bubble? Biotech AI startups’ value plummet and leads to restructuration CRISPR technology’s next wave: Eight companies to watch in 2024 Second biotech IPO boom of the year: what does it mean for the industry? This revival was further exemplified by Upstream Bio’s October debut, where shares opened 26.5% above the initial public offering (IPO) price, valuing the company at $1.1 billion. Overall, the healthcare sector, with biotech as a significant contributor, led U.S. IPO activities in 2024, accounting for 23% of total IPO proceeds and raising $6.6 billion. This resurgence indicates a robust recovery in biotech public market activities, with expectations of continued momentum into 2025. Europe’s biotech IPO landscape was more subdued.The biotech industry sent mixed signals in 2024, with startups reaching record funding rounds and bigger players being more cautious with their investments.CRISPR building on its end-of-2023 momentum2023 ended strong with approvals by the U.S. Food and Drug Administration (FDA) and the United Kingdom’s Medicines and Healthcare products Regulatory Agency (MHRA) of Casgevy – the CRISPR-based therapy developed by Vertex Pharmaceuticals and CRISPR Therapeutics for the treatment of sickle cell disease (SCD).This marked a pivotal moment as Casgevy was the first CRISPR therapy authorized in the United States, but did the field manage to build on this momentum in 2024?In 2024, the gene-editing landscape, particularly concerning CRISPR technologies, has seen significant advancements in clinical trials targeting various genetic disorders. For instance, Beam Therapeutics commenced a phase 1/2 clinical trial for BEAM-302, a base-editing therapeutic candidate designed to correct mutations in the SERPINA1 gene responsible for alpha-1 antitrypsin deficiency (AATD). The therapy aims to restore normal levels of alpha-1 antitrypsin, potentially preventing associated lung and liver diseases.Intellia Therapeutics also reported encouraging interim data from its phase 1/2 trial of NTLA-2002, an in vivo CRISPR therapy targeting the KLKB1 gene to reduce plasma kallikrein levels, thereby preventing Hereditary Angioedema HAE attacks. The therapy demonstrated significant reductions in attack rates.Additionally, KSQ Therapeutics dosed the first patient in a phase 1 trial of KSQ-001, an autologous CRISPR-edited tumor-infiltrating lymphocyte (TIL) therapy designed to enhance anti-tumor activity in solid tumors. Gene editing has also seen its share of deals, with one notable collaboration between Editas Medicine and Genevant Sciences. The objective is to develop novel gene editing therapeutics by combining Editas Medicine’s CRISPR platform with Genevant’s lipid nanoparticle (LNP) delivery technology. Genevant is eligible to receive up to $238 million in upfront and contingent milestone payments.The approval and commercialization of CRISPR-based therapies like Casgevy signify a new era in gene editing, with several companies holding the potential to address previously untreatable genetic conditions. This 2023 milestone has allowed several other assets to progress through the pipeline in 2024 and there is no doubt CRISPR and, more broadly, gene editing will continue to play an important part in the industry.Artificial intelligence kept on giving in 2024This year, the question of the true potential of artificial intelligence AI in biotech was raised – we wondered whether we were in an AI bubble about to burst or if the market was just experiencing a correction. We leaned toward the explanation of a market correction as the expectation might have been too big in comparison with AI contributions to the biotech industry so far. There is still a lot going on with AI and it’s sometimes difficult to decipher if it’s just hype or if there’s a real benefit. It’s also difficult to pinpoint exactly what AI is bringing to the equation as it’s getting more and more involved in different areas of the industry. “The integration of AI became a notable trend across biotech operations, with companies leveraging it for applications ranging from drug design to predictive analytics. This trend is expected to continue, with AI becoming an integral component of biotech research and development,” said Trotsyuk.Andrea Bortolato, vice president of drug discovery at SandboxAQ, noted that 2024 has been marked by tech giants like Google, Microsoft, and NVIDIA taking more space in drug discovery in various ways.“In different ways, these tech giants are taking more space. Through direct initiatives like Google DeepMind and Isomorphic Labs, which are developing cutting-edge AI-driven solutions for drug discovery. Also by forming strategic partnerships with biotech firms, such as Microsoft’s collaboration with 1910 Genetics and NVIDIA’s investment in Recursion. Finally, through close collaborations to create tailored AI solutions for challenging, previously undruggable targets”According to Bortolato, this new wave, often referred to as “Techbio,” is reshaping the biotech landscape, enabling faster and more efficient development of novel therapeutics. “In parallel, the first generation of AI-driven biotech companies has begun to see initial success, with several AI-discovered molecules now advancing through clinical development stages. Some early results are promising, signaling the potential of AI to significantly impact drug discovery,” Bortolato added.However, similarly to how we might have thought we were in an AI bubble because of the overhype around the technology, Borolato notes it’s important to have a nuanced understanding of AI applications in biotech to distinguish genuine innovation from marketing hype in the rapidly evolving Techbio space.Beyond AI, Carter Caldwell, Penn Medicine co-investment program director at the University of Pennsylvania, confirms this overlap of tech in biotech.“A new trend is the crossover between biotech and tech venture capitals (VCs). Typically, venture capital has a very specific sector focus. However, I am seeing more and more crossover between these investors because of 2 things: AI in biotechnology is bringing together biotech and technology VCs, and academic institutions are progressing biotech technology further before a spinout emerges, which lowers the amount of capital needed to commercialize and brings in venture capital investors with less dry powder.”While it was fair to ask the question of the true potential of AI in biotech, the truth is that AI has very much been the center of attention in 2024, and rightfully so. “The 2024 prize was awarded to John Jumper and Demis Hassabis of Google DeepMind in London for their development of AlphaFold, a groundbreaking AI tool for predicting protein structures, and to David Baker of the University of Washington in Seattle for his pioneering work on computational protein design, which has been increasingly enhanced by AI in recent years,” reminded Del Bourgo.On several occasions, including this year, we wrote about how AI was contributing to and reshaping biotech in key areas such as cancer or Alzheimer’s. Time will tell if AI will meet our very high expectations, but there is no doubt it’s been a big part of 2024.What did 2024 have in stock for neurological disorders? In 2024, significant advancements have been made in the understanding, diagnosis, and treatment of neurological disorders, with a particular focus on Alzheimer’s disease.In July 2024, the U.S Food and Drug Administration (FDA) approved donanemab, marketed as Kisunla, for the treatment of early symptomatic Alzheimer’s disease. This monoclonal antibody targets amyloid-beta plaques in the brain, aiming to slow disease progression. Clinical trials demonstrated that donanemab could significantly reduce cognitive and functional decline in patients with mild cognitive impairment or mild dementia stages of Alzheimer’s.But while the treatment landscape is still vastly dominated by amyloid-beta plaque-targeting therapies such as Kisunla, new approaches are also progressing. Tau tangle is one example, with Asceneuron raising $100 million in 2024 to advance its tau-protein targeting therapy. ASN51 – the company’s lead candidate – aims to prevent tau protein aggregation, a key factor in Alzheimer’s progression, by inhibiting the OGA enzyme. This approach offers a potential paradigm shift in treatment, especially given its convenient oral administration.Jeremy Levin, CEO of Ovid Therapeutics, compares the rising success of GLP-1 therapies in cardiometabolic diseases to the earlier breakthroughs in immuno-oncology and anticipates a similar trajectory in the field of neurology.“These breakthroughs in obesity and immuno-oncology have ignited interest in applying similar approaches to neurology, to target fundamental pathways and mechanisms underlying brain dysfunction. The aging population and increasing prevalence of neurodegenerative diseases have galvanized neurology R&D, just as obesity and diabetes did for weight loss therapies.”According to Levin, Pharmaceutical companies are rapidly renewing their focus in neurology after years of retreat. Levin gave the example of Longboard and Aliada which cumulated $4 billion for their acquisitions this year by Lundbeck and AbbVie.In 2024, drugs also completed their journey through the pipeline and received their precious FDA approval.Some notable drug approvals in different areas in 2024In 2024, the FDA approved several notable drugs across various therapeutic areas.Oncology FDA approvalsTecelra – Adaptimmune: Approved in August 2024, Tecelra is the first T-cell receptor gene therapy authorized for treating unresectable or metastatic synovial sarcoma, marking a significant milestone in engineered cell therapy for solid tumors.Bizengri – Merus: In December 2024, the FDA granted accelerated approval to Bizengri for adults with advanced non-small cell lung cancer and pancreatic adenocarcinoma harboring neuregulin 1 gene fusions, offering a targeted treatment for these malignancies.KRAZATI (adagrasib) in combination with Cetuximab – Bristol Myers Squibb: Granted accelerated approval in June 2024, this combination therapy is for adults with previously treated KRAS G12C-mutated locally advanced or metastatic colorectal cancer.Rybrevant – Johnson & Johnson: The FDA expanded Rybrevant’s indications in March and September 2024, approving it in combination with chemotherapy for adults with locally advanced or metastatic non-small cell lung cancer with specific EGFR mutations.FDA approvals in other disease areasVyalev – AbbVie: Approved in October 2024, Vyalev is indicated for the treatment of motor fluctuations in adults with advanced Parkinson’s disease, providing a new approach to managing this neurodegenerative disorder.Hympavzi – Pfizer: In October 2024, the FDA approved Hympavzi for treating adults and adolescents with hemophilia A or B without inhibitors, representing a significant advancement in hemophilia management.Emrosi – Journey Medical: In November 2024, the FDA approved Emrosi for treating inflammatory lesions of rosacea in adults, offering a new therapeutic option for this chronic skin condition.Yorvipath – Ascendis Pharma: Approved in August 2024, Yorvipath is the first treatment for hypoparathyroidism, a rare endocrine disorder. Mresvia (Moderna): In May 2024, the FDA approved Mresvia, an mRNA vaccine for preventing lower respiratory tract disease caused by respiratory syncytial virus (RSV) in individuals aged 60 and older.Dupixent (Regeneron and Sanofi): In September 2024, Dupixent received FDA approval as the first biologic treatment for chronic obstructive pulmonary disease (COPD).2024, still marked by cautious optimismWe wrote in January that biotech was poised for recovery in 2024. While the year has overall been relatively positive, with startups raising considerable amounts and a relatively stable, yet cautious M&A activity, biotech is still far from its record performance during the pandemic. This year might be the first year of a slow biotech recovery. Indeed, 2024 biotech still faced some significant challenges. “Regulatory hurdles, especially concerning gene editing and AI applications, require companies to navigate complex approval processes. Funding volatility remained an issue, with private investments showing growth but public markets maintaining a cautious outlook. Biotech firms need to demonstrate clinical outcomes and clear pathways to profitability,” said Trotsyuk. And some biotech companies had to face the harsh consequences of this unfavorable climate. “The year was marked by significant layoffs across several biotech companies. For example, Ginkgo Bioworks announced plans to lay off as many as 400 employees in June 2024. Similarly, 23andMe faced significant restructuring, laying off 40% of its workforce and shutting down its drug development business despite a recent strategic focus on developing an internal pipeline,” noted Del Bourgo. Evotec, a landmark in European biotech, is another example of the difficulties the industry is facing. The market hasn’t been kind to the German company, and although it declared it was determined to remain independent, there has been some noise about a potential acquisition at the end of 2024.Trostyuk also mentioned the peculiar geopolitical context that marked 2024. “Geopolitical tensions, particularly between the U.S. and China, have highlighted vulnerabilities in biotech supply chains.” Indeed, the WuXi Apptech controversy sparked an immediate legislative response by the U.S. in the name of the BIOSECURE Act. This bill aims to prevent contractual relations between U.S. and Chinese companies. While this can be synonymous with opportunities for other countries to step in and fill the gap China CDMOs will leave behind them, it does mean U.S. and perhaps European biotechs will have to rethink their supply chains.Fortunately, some events allowing us to be optimistic about the biotech industry also happened in 2024. “On a more positive note, landmark achievements and acquisitions highlighted the sector’s potential. The acquisition of Recursion by Exscientia represented a significant milestone in AI-driven drug discovery,” noted Del Bourgo.To wrap it up, it’s fair to say that 2024 biotech is going to leave a bitter-sweet taste, and we can hope for 2025 to be a bit more dynamic. Explore other topics: Alzheimer'sArtificial intelligenceCRISPRinvestment ADVERTISEMENT