H1 2022 Healthcare and Life Sciences in North America: Market Insights

Published on: Nov 29, 2022
Author: Tony Liu

2021 was an outlier year for the life science industry. After a such record-setting year, the transaction volume and value fell significantly in the first half of 2022. However, despite the lagging start, the overall market is expected to normalize to pre-pandemic levels by year-end.

Healthcare Leading Indexes

Some of the best-representing North American healthcare sector leading indexes were selected: NASDAQ iShares Biotechnology ETF Index (NASDAQ: IBB) and S&P Biotechnology Select Industry Index in the US (INDEXSP: SPSIBI), and Healthcare Capped Index in Canada (TSX: TTHC).

  • IBB: Peak at $175.81 on 8/29/2021, then dramatically fall to bottom at $109.56 on 6/12/2022. (down by 38% in less than one year).
  • SPSIBI: Peak at $13,513.12 on 2/8/2021, then constantly decreasing to bottom at $4882.37 on 5/11/2022 (down by 64% within one year).
  • TTHC: Peak at $110.1 on 2/10/2021, Bottom at $22.7 on 6/17/2022, down by 79% within 16 months.

Possible Reasons For The Downturn Market

“The market finally succumbed to the pressure of the Federal Reserve raising interest rates in an effort to combat a surprisingly high inflation rate of over 8%, which still continues to climb. Recession concerns have also crept into investor sentiment and contributed to the downward pressure in the market. The interest rate hike, seemingly long overdue, was likely driven by excessive stimulus payments impacting inflation as well as the COVID-19 pandemic’s detrimental impact on the worldwide supply of labor and materials, which led to rising costs.” (Calcagnini, 2022, p. 2)

Life Sciences M&A Activities Plummets 1H’22

“M&A transaction volume across the Healthcare & Life Science industry plummeted in Q2 2022 to 338 deals announced and/or closed, a decline of 37% from 535 transactions in Q2 2021 and a record 565 transactions in Q4 2021. The weak first half of 2022 was to be expected given the bolus of transactions that were consummated at the end 2021, but the second quarter dip was far greater than anticipated.

The volume of new deals announced during Q2 2022 also dropped to 74 transactions versus 87 transactions a year ago, which is its lowest level since Q1 2018. This likely suggests that 2H 2022 will not rebound much, and we also anticipate that lenders will become more discerning and conservative in the second half given recession fears and recent interest rate increases.

Overall, the number of transactions closed in the quarter dropped 41% to 264.” (Calcagnini, 2022, p. 7).

Despite the sharp fall of the transaction volume (-33%) and value (-58%), in the US, there are still some mega pharmaceutical & life sciences deals in the first half of 2022 (PwC, 2022). On top of the list is Pfizer’s acquisition of Biohaven Pharmaceuticals at $11.6 Billion (Pfizer, 2022).

On the other hand, in the last twelve months (June 2021 – June 2022), a total of 42 M&A deals (pending and completed) were announced in the healthcare sector of Canada, with a total deal value of over $8.24 Billion in the LTM period (Global Data, 2022). The secured deal between Pfizer Inc and Trillium Therapeutics Inc valued at $2.26 Billion on Aug 23, 2021, was the largest M&A deal in the Canadian healthcare sector (Pfizer, 2021).

Life Sciences Deals And Funding Back To Pre-Pandemic Levels

“Biopharma and Medtech dealmaking continued to see declines across its subsectors in the second quarter of 2022. This follows years of record-breaking activity in venture, licensing, IPO and M&A. Licensing and venture numbers are back down to mid-2019 levels—wrapping up two years of rapid deal and funding activity—though still near the top of the five-year trend.

IPO and M&A activities were the lowest across the five-year trends for Biopharma and Medtech in the second quarter of 2022. Total transaction volume in H1 2022 was settled to 2019 levels at 1,667 deals, which includes 145 M&A deals. In terms of venture activities, 663 venture rounds across BioPharma and MedTech, down from the 862 peak in funding rounds in the first half of 2021. Medtech at $7.1 billion outperforms Biopharma at $5.3 billion in venture funding. Both of them went down from the 2021 peak but still near the top of the 2017 to mid-2020 range.” (J.P. Morgan, 2022).

In Canada, life sciences venture capital normalizes to Pre-Pandemic levels with CAD $6.2B invested across 55 deals during the first half of 2022. Compared to Q1 (24 deals), Q2 had a 29% increase in deal count. However, there was a sharp dip (-51%) in funding from $4.16 billion in Q1 to $2.05 billion in Q2 (CVCA, 2022).

Notes: This breakdown article provides additional content from NAI Interactive Ltd.’s presentation at the GCFF Virtual Conference 2022 – Healthcare Investment (Asia Pacific) on Nov 16, 2022.

Presentation Replay

PPT Download:  https://nai500.com/wp-content/uploads/2022/11/FINAL_Gilbert-PPT-GCFF-Nov-16.pdf.

Stay tuned for H1 2022 Healthcare and Life Sciences Worldwide: Cell and Gene Therapy (CGT).



Calcagnini, J.C. (2022). Healthcare & Life Sciences Industry Update – Q2 2022. Stout. https://www.stout.com/en/insights/industry-update/healthcare-life-sciences-industry-update-q2-2022 .

CVCA. (2022). H1 2022: VC & PE Canadian Market Overview. https://www.cvca.ca/research-insight/market-reports/h1-2022-vc-pe-canadian-market-overview .

Global Data. (2022). Canada: Five largest Mergers & Acquisitions deals by value in the Healthcare sector (LTM June 2022). https://www.globaldata.com/data-insights/healthcare/canada–five-largest-mergers—acquisitions-deals-by-value-in-the-healthcare-sector–ltm-2087994/ .

J.P. Morgan (2022). Biopharma and Medtech Deals and Venture Outlook Midyear Outlook: July 2022. https://www.jpmorgan.com/content/dam/jpm/commercial-banking/insights/life-sciences/jpmorgan-chase-q2-2022-biopharma-medtech-midyear-outlook-final-ada-report.pdf .

Pfizer. (2021). Pfizer Completes Acquisition of Trillium Therapeutics. https://www.pfizer.com/news/press-release/press-release-detail/pfizer-completes-acquisition-trillium-therapeutics .

Pfizer. (2022). Pfizer Completes Acquisition of Biohaven Pharmaceuticals. https://www.pfizer.com/news/press-release/press-release-detail/pfizer-completes-acquisition-biohaven-pharmaceuticals .

PwC. (2022). Pharmaceutical & life sciences: Deals 2022 midyear outlook. https://www.pwc.com/us/en/industries/health-industries/library/pharma-life-sciences-deals-outlook.html .

S&P Dow Jones Indices. (n.d.). S&P Biotechnology Select Industry Index. https://www.spglobal.com/spdji/en/indices/equity/sp-biotechnology-select-industry-index/ .

TMX Money. (n.d.) S&P/TSX Capped Health Care Index. https://money.tmx.com/en/quote/^TTHC .

Yahoo Finance. (n.d.). iShares Biotechnology ETF (IBB). https://finance.yahoo.com/quote/IBB/ .

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