2022 in review – Life Sciences & Healthcare
What were the main trends for biopharma this year? Read on for a report from our Director of Life Sciences, Ben Brickell
Private and public funding down
Last year, we noted that there was still plenty of appetite for investment in biotech and health tech from Venture Capital (VC) funds. Whilst interest in the sector remains high, the flow of VC money has since stagnated; the downturn in both private and public funding for biotech has been significant. Naturally, this has caused hiring patterns to change as companies have faced a new set of challenges.
Return of M&A, restructuring, and a challenging candidate market
This year has brought plenty of mergers and acquisitions (M&A) in big pharma; as such, strong negotiators, and candidates with experience in structuring both M&A and licensing deals, have continued to be in high demand. We have also seen corporate restructuring take place at several large companies, with reports of layoffs and ‘fire and rehire’ practices. (Our Interim Solutions practice has been a fantastic support to some of our clients in such situations.) In addition, these businesses have had to work leaner, with new permanent hires taking on broader, all-encompassing roles; we’ve noticed this in biotech in particular, with smaller companies especially willing to operate this way. Where money isn’t going as far as it used to – and without the same opportunities to raise further capital – we are seeing broader roles opening up. Candidates may need to wear several different positions for a given role, leading to plenty of exciting (if challenging) opportunities.
Biotech layoffs drive competition, with salaries rising in turn
Amid clinical setbacks, financial difficulties due to less funding, and smaller companies winding down full stop, we have seen several companies having to make redundancies. Whilst this has provided a much-needed boost of talent onto the market, we continue to see demand outstripping supply in certain specialist areas like advanced therapies (ATMPs), for example. There were several instances where candidates to whom we presented offers had received one or two other proposals concurrently. Between the fierce competition, as well as adjustments made for inflation, we have noticed salaries continuing to rise in such high-demand areas.
Predictions for next year
We expect the flow of capital from VC funds to emerging Biotech to improve in 2023. With renewed investment, we will inevitably see a better general flow of jobs in the sector. VC firms continue to focus intensely on identifying top talent at both the mid/senior management level to ensure a solid pipeline for future investments.
Separately, big pharma companies will likely be better placed to operate and hire more flexibly after the restructuring we saw this year. That said, how this pans out remains to be seen given the uncertainty in public markets; investors have withdrawn in significant numbers from this sphere, so big pharma may yet feel the pinch. Another possible development for 2023 could be increased investment in biotech from private equity funds. With a depressed market for initial public offerings (IPOs), companies and their investors will likely be seeking alternative sources of later-stage funding. We have seen some interesting moves between PE and VC this year with Carlyle acquiring Abingworth and EQT picking up LSP. Further interest in Biotech from Private Equity would be widely welcomed and would certainly accelerate job creation in the industry.
Overall, the life sciences sector is in a good place. Despite the above-mentioned question mark over public markets, it is worth remembering that good science will always attract investment – and investors still have plenty of money for this. Could next year even see a return to IPOs from biotech, after the downturn we saw in 2022? Most industry commentators are predicting continued uncertainty at least through the first half of 2023. I think continued M&A and Private Equity movements could be what we are all talking about by this time next year, with IPOs making a slow and cautious return.
Advice for candidates and clients
We would suggest that candidates are flexible regarding the kinds of roles they might consider, and to look at the long-term picture – both for specific openings as well as the market at large. It is especially important for biotech candidates to be able to operate outside of job specs, given the leaner direction we’ve seen firms in this sector take lately. These roles can provide fantastic learning curves and experiences that, in the right setting, turn out to be real career accelerators. ‘The right setting’ can be quite subjective, but there are often objective things to look out for from the outset – I am happy to discuss this with anyone that would like to know more.
A topic that we expect to continue to discuss with clients in 2023 is remote/hybrid working. We have some clients that have moved to a completely virtual model and others that commit to a minimum number of days per week in the office. Each company faces a different set of challenges so there is a never a ‘one-size-fits-all’ answer to the question. For example, it is arguably more important for emerging companies to be spending time together in-person as they are building a business – and culture – from scratch. One thing is for sure, though: if your business is not headquartered in an existing Biotech talent hub (Boston, Zurich, San Francisco etc.), you are going to have some significant recruitment challenges if you do not have a remote/hybrid working policy. Again, I am happy to discuss this topic with anyone that can relate and would like to know more.
Thank you for reading!
We would like to wish our network a very happy holiday season, and all the best for 2023!
If you have any questions or would like to discuss any of the above topics in more detail, either as a candidate or a client, please feel free to get in touch.