This commitment to platforms stands in stark contrast to the $6.5 billion that was allocated in 2022 toward more traditional asset-based biotechs, which primarily concentrate on developing specific drugs.
Innovative platform technologies such as drug discovery enabled by machine learning (ML), cell therapies, and gene therapies have dominated biotech funding over the past few years because they typically promise to address a broad array of indications over time (Exhibit 4).5McKinsey defines platform companies as those that are developing a base or infrastructure for further therapeutic development.;) In 2022, these innovative platforms secured a substantial $15.5 billion in funding, constituting more than two-thirds of total biotech VC investment, a trend similar to what McKinsey’s 2021 analysis uncovered.6Olivier Leclerc, Michelle Suhendra, and Lydia The, “;) What are the biotech investment themes that will shape the industry?,” McKinsey, June 10, 2022. This commitment to platforms stands in stark contrast to the $6.5 billion that was allocated in 2022 toward more traditional asset-based biotechs, which primarily concentrate on developing specific drugs. Although VC funding has faced some fluctuations, VC investors appear to still be excited about the sector’s long-term potential.