ARTICLE SUMMARY:
The IVD industry is recalibrating as financing availability and valuations revert to pre-pandemic levels, following an unprecedented period of access to capital. Companies are having to do more with less, and the situation could get worse. Diagnostics, however, is too important an industry for investors to ignore, and an investor’s goal is spotting the right opportunities for rewards. By Craig Steger, Oded Ben-Joseph, PhD, and Carey Gallant, Outcome Capital, and Wendy Diller.
During the COVID-19 pandemic, the US government imposed sweeping pandemic measures on the nation allowing millions of Americans to receive free tests, vaccines, and treatments aimed to prevent spread of a potentially life-threatening, highly contagious disease. These COVID-19 emergency declarations will end on May 11, marking a close to the US response to the global pandemic.
With the end of the pandemic, the in vitro diagnostics (IVD) industry is confronting a reckoning—one that was predictable but is still painful. After peaking in 2021, IVD financings, particularly for early-stage companies, are tight, valuations are coming down, and deals, regardless of subspecialty, are smaller in size and volume, according to Outcome Capital’s latest survey highlighting trends in the IVD industry from the second half of 2021 through year-end 2022. The downward trends are in line with experiences throughout much of the life sciences industry, but strike particularly hard at the IVD industry, which flourished to a remarkable degree from the enormous influx of funding and demand for COVID testing.
