Investments in Israeli life sciences companies drops 40% to $1.4 billion in H1 of 2023
According to a report by the Israel Advanced Technology Industries (IATI) organization, the number of deals in H1 decreased at a higher rate, approximately 53%
Investments in the life sciences industry in Israel during the first six months of 2023 totaled approximately $1.4 billion, a decrease of 40% compared to the first six months of 2022. The sum, raised in 83 deals, is less than 50% of total funds raised in 2022 annually. The number of deals decreased at a higher rate, approximately 53%, compared to 158 deals in the corresponding period in 2022. However, the report, by the Israel Advanced Technology Industries (IATI) organization, shows that average funding per deal increased by 15% compared to the first six months of 2022, reaching a record, compared to the last few years, of $17.2 million.
Out of the total amount of approximately $1 billion invested in life sciences companies in the first six months of 2023, $700 million came from foreign investors, representing a significant decrease from the first six months of 2022. Although the amount invested by foreign investors is lower than the amount invested in 2021 and 2022, which were record years for foreign investments, it is similar to the foreign investments made in 2019 and 2020, and higher than foreign investments in 2018. The report also indicates a decrease in local investments in Israeli life sciences companies compared to the first six months of 2022, to $240 million, their percentage out of the total investments increased to 25%, reflecting a change in trend compared to previous years.
U.S. stock markets were and remain a significant source of funding for life science companies in Israel. Despite the general trend, in the first six months of 2023, Israeli life sciences companies raised approximately $500 million on U.S. stock markets, mostly on Nasdaq. This amount is more than 400% higher than the amount raised in the corresponding period in 2022, and more than 150% higher than the amount raised on U.S. stock markets in 2022. The number of deals in these markets increased significantly by almost 200%, resulting in an increase of 225% in the average deal amount to approximately $39 million.
“The industry entered a global economic slowdown in the second half of the year 2022, which also continued into the year of 2023," said Karin Mayer Rubinstein, CEO & President of IATI.
According to Omer Gavish, Partner, Pharmaceuticals & Life Sciences Leader at PwC Israel, who led the writing of the report, "The first half of 2023 continued the trend we saw in 2022 and especially at the end of it. The decrease in investment activity in life science companies in Israel is not materially different from the global trend, and was influenced by global and local factors.”