Life sciences industry outlook

Economic trends, particularly higher interest rates, have influenced the medtech sector. Companies are becoming more cautious and looking to minimize risk due to the increased cost of borrowing. However, as of late November, interest rates are expected to continue to drop, which could lead to a resurgence in investment. Nevertheless, it is unlikely that we will see the same level of activity as during the COVID-19 pandemic, when deals and investments were exceptionally high.

Additionally, companies in the medtech sector that primarily serve biopharma clients, such as those providing life sciences equipment and technology, will face a prolonged recovery period. This is due to capital constraints within the biopharma sector, which will slow their ability to invest and expand. As a result, while the overall outlook for the medtech sector is positive, certain segments may experience slower growth and recovery.

In the latest Life Sciences industry outlook, RSM examines the current biopharma landscape, highlighting significant challenges and opportunities. One thing is certain: Funding remains a critical issue within the sector. While public markets have shown some signs of activity, the volume of transactions has been notably lower than anticipated. This sluggishness is attributed to the Inflation Reduction Act (IRA) and an approaching patent cliff, both of which are expected to impact revenue streams. However, these factors may also spur an increase in licensing deals and mergers and acquisitions (M&A) as companies seek new strategies to maintain growth and innovation in a challenging market environment. The report emphasizes the need for biopharma companies to navigate these complexities with agility and foresight to capitalize on emerging opportunities.