The Mergers and Acquisitions of Venture Capitalist-Backed Pharmaceutical Developers are Picking Up Again After a Relatively Quiet Phase in 2023, Brightening the Prospects for Venture Capitalists Looking to Exit Biotechnology Investments.

On Monday, the venture capital-backed biotechnology startup Cardior Pharmaceuticals announced its acquisition by the pharmaceutical manufacturer Novo Nordisk, in a deal worth more than 1.02 billion euros in upfront and milestone-dependent payments. The companies expect the transaction to be completed in the second quarter. AnHeart Therapeutics also announced merger plans on Monday.

The venture capital-backed biotech company announced that it will merge with the publicly traded pharmaceutical manufacturer Nuvation Bio. The stock deal is expected to be completed in the next quarter.

From the beginning of the year until March 18th, four private, venture capital-backed biotech companies worldwide closed merger deals with at least 75 million dollars paid upfront, according to Silicon Valley Bank.

This compares to two in the same period of the year 2023. Large pharmaceutical companies are less keen on bargain hunting and more on finding drug programs that are advanced enough to justify an acquisition, said Andrew Weisenfeld, a managing partner at the investment bank MTS Health Partners.

"The buyers are very disciplined, they target assets when they want them and when they think they are sufficiently risk-free," Weisenfeld added.

The Acquisitions Aren't Exploding Yet for Biotech Startups. But Startups with Promising Drug Programs are Attracting Attention. Cardior had advanced a heart failure drug into mid-stage, i.e., Phase 2, clinical trials.

The company, which included EQT Life Sciences among its venture capital investors, could have raised funds for the next phase of clinical trials but decided that a merger with Novo Nordisk would be the best option, said co-founder and CEO Dr. Claudia Ulbrich.

Large pharmaceutical companies need new drugs to replace those that will lose their patent protection in the coming years, and much of their innovation comes from the biotech industry, said Sofia Ioannidou, partner at Amolyt investor Andera Partners.

Large pharmaceutical companies are acquiring not just biotechs with drugs in late clinical trials, said Antoine Papiernik, Chairman and Managing Partner of venture capital investor Sofinnova Partners, who also supported Amolyt.