More deals at slightly smaller tickets: European life sciences landscape sees 50% increase in deal volume compared to Q3 2023
In this third update paper of 2024, we outline the investment landscape and activity in MedTech, Diagnostics, and Digital Health over Q3. As we focus on capital raisings, M&A and strategic agreements activity across European companies, we also highlight two interesting deals made in the past three months.
Deal volume in MedTech, diagnostics and digital health has grown significantly between Q3 2023 and Q3 2024
The total amount of disclosed investments by European VC’s was only slightly higher, with $406 in Q3 of 2024 versus $351 in the same quarter of 2023, while significantly more deals were made (49 versus 36). Particularly for startups and scale-ups the number of deals nearly doubled.
Apart from the big acquisition of Endomagnetics by Hologic for $310M this year, and Danaher’s acquisition of Abcam for $5.7B in Q3 2023, M&A have been relatively stable both in terms of volume and capital.
However, more majority acquisitions have taken place at undisclosed amounts. We observe similar movement in strategic alliances between Q3 of this year versus last year, with an increase in co-development deals in particular.
Green circle = positive change, yellow circle = invariable change, red circle = negative change
With more deals but only slightly more capital invested, we observe a minimal decrease in the median tickets this quarter, compared to the $3.19M, $6.01M, $12.59M, and $89.34M for seed, startup, growth and late stage funding rounds respectively (Figure 1).
Digital health innovations continued to secure most deals in Q3, but more niche applications received funding
The majority of this quarter’s deals were made in digital health (13), in vitro diagnostics (13), cardiovascular devices (9), and diagnostic imaging (11, Figure 2). Looking at types of technologies that were able to raise funds, we saw relative increases in activity across drug delivery (7), orthopedics (4), and dental devices (4).
Highlights
September 30th, 2024: Mindpeak Raises $15.3M in Series A Funding
Mindpeak, the leader in AI-powered pathological solutions, announced it has raised $15.3M in a Series A funding round. The round was led by ZEISS Ventures and InnoVentureFund with participation from – amongst others – AI.FUND and the European Innovation Council Fund. While Mindpeak already has a cashflow-positive core business, this new investment will enable the company to further expand the commercialisation of its pioneering technologies across several geographies.
“With this new capital, we will accelerate the development and deployment of our AI solutions, empowering pathologists and researchers with faster, more accurate diagnostic tools,” said Felix Faber, CEO of Mindpeak. “Our goal is to revolutionize cancer diagnostics and ultimately improve patient outcomes.”Mindpeak’s AI algorithms were among the first to be deployed for routine clinical diagnostics in both the US and EU.
The company’s innovative solutions enable automated histological and immunohistochemical tissue analysis, helping experts make more confident decisions. To date, over 30,000 patient diagnoses have been supported using the AI solution. Biopharmaceutical companies also use this AI technology to predict the effectiveness of certain medications in cancer therapy and to enable targeted treatments.
“Since its founding in 2018, Mindpeak has developed cutting-edge solutions, establishing itself as a prominent leader in the digital pathology market,” said Mike Gänßler, Investment Manager at ZEISS Ventures. “Both as an investor and as a market partner, we are firmly convinced of Mindpeak’s promising future.”
Mindpeak recently expanded its product portfolio to include additional organs, biomarkers, and stainings. Strategic partnerships with leading healthcare organizations, such as Roche, along with positive regulatory developments, further bolster the company’s position in the market. “Mindpeak’s commitment to innovation in digital pathology has been evident through their rapid product development and growing adoption across markets,” said Gencer Sahin, Head of Investments at IFB Innovationsstarter GmbH / InnoVentureFund. “This funding round will further solidify their position as a key player in the transformation of cancer diagnostics.”
July 12th, 2024: Edwards Life Sciences to Acquire 9.21% Stake in Affluent Medical for $5.43M
Affluent Medical SASU, a French clinical-stage medical technology company specializing in the international development and industrialization of innovative medical devices, announced that it has signed several agreements with Edwards Lifesciences (“Edwards”) related to Affluent’s structural heart products (adjustable mitral annulus Kalios™) and technologies (mitral valve technology).
Under the terms of these agreements, Affluent will receive a total of EUR15M upfront as a cash payment. The agreements are as follows:
1) An upfront payment of EUR5M for an exclusive option to acquire Kephalios, Affluent’s wholly owned subsidiary supporting the Kalios™ innovative adjustable mitral ring, based on clinical outcomes from its study. The operational activities for the development of Kalios™ will continue to be managed exclusively by Affluent during the life of the option.
2) An upfront payment of EUR5M for the global, non-exclusive license of Affluent’s intellectual property for the biomimetic cardiac mitral valve replacement technology, restricted to open-heart surgery. Affluent is eligible to receive additional future royalties on all potentially commercialized products using the licensed patents for the lifetime of these patents. Affluent retains full patent rights for transcatheter valves, including its Epygon mitral valve currently in clinical development.
3) An upfront payment of EUR5M for an equity stake in Affluent. The subscription agreement will be carried out via a capital increase with cancellation of shareholders’ preferential subscription rights through an offer reserved for categories of beneficiaries.
Based on the company’s share capital at the date of the prospectus and on an undiluted basis, a shareholder owning 1% of the share capital before the transaction would be diluted to 0.84% of the share capital after completion of the capital Increase. The capital increase will be subject to the filing and approval of a prospectus. A separate press release announcing the approval of the prospectus will be issued by Affluent.
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FFUND’s Venture Finance team helps building and strengthening companies’ propositions to raise capital in an investment round. We do this by offering a number of services: analyzing the companies’ performance through assessment of key indicators, designing the data-room, performing market analyses, company valuations and composing the business plan and teaser deck for investors. On top of that, the team leverages its network of investors to receive feedback on your proposition while serving as a warm introduction.
