Private equity (PE) deal activity in pharmaceutical supply chain services showed steady growth over the past decade, but that trend shifted postpandemic. Since 2021, PE buyouts and investments in pharma services have declined, Partner Clay Bischoff and coauthors note, and PE deal activity fell by 15 percent per year between 2021 and 2023. However, the global pharma supply chain services industry has a profit pool of about $77 billion, composed of high-growth subsegments such as raw materials and consumables that represent opportunities for PE investors.
Image description:
A bar chart and a line chart illustrate private equity activity in pharmaceutical services. The bar chart shows the number of private equity buyouts from 2014 to October 2024. The number of deals shows an upward trend from ~180 in 2014 to a peak of ~340 in 2020. After 2020, there is a significant decline, with the number of deals dropping by 15% to ~180 in 2024. The line graph depicts private equity investments in the same sector, measured in billions of dollars over the same period. Investment levels were at ~$20 billion in 2014. Between 2017 and 2020, investments fluctuated before spiking sharply to almost $50 billion in 2021. Investment levels then fell to ~$9 billion in 2022, increased to $20 billion in 2023, and dropped to $6 billion in fall 2024.
Note: This image description was completed with the assistance of Writer, a gen AI tool.
Source: PitchBook.
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To read the article, see “From discovery to delivery: Finding an investment edge in biopharma services,” January 29, 2025.