HSBC’s acquisition of Silicon Valley Bank UK following the collapse of its parent company Silicon Valley Bank may result in new opportunities for biopharma companies, says GlobalData.
According to GlobalData’s Pharma Intelligence Center Deals Database, SVB Financial Group and its subsidiaries were involved in over $1.4 billion in total venture financing raised from 2010 to 2022 for drug development. In 2018 alone, the company invested over $400 million in venture financing.
Sharon Cartic, Associate Director of Business at GlobalData, comments, “The access to increased capital and international presence that HSBC provides could allow for the potential for biopharmaceutical companies to improve investment in the development of therapies.
“2020 was a record year for venture financing; however, 2021 and 2022 saw less investment as recovery from the COVID-19 pandemic, the Ukraine crisis, and inflation caused market volatility, which resulted in a less favorable environment for risk-averse investors across the biotech industry.”
The Netherlands-based biopharmaceutical company Pharming Group, which develops innovative protein replacement therapies and precision medicines for multiple rare diseases, stated the HSBC acquisition of Silicon Valley Bank UK would allow access to its $19 million deposit and not bear losses. Other European biopharmaceutical companies stated they also expect to recover their deposits. Danish Zealand Pharma, which is involved in the discovery and development of innovative peptide-based medicines, expects to recover its $23.4 million in deposits.
Cartic concludes, “Silicon Valley Bank was a leading provider of venture debt, a type of financing in the form of a loan used by early-stage startup companies to raise capital. It remains to be seen how the void left by the collapse of the bank will be filled and whether there could be a slowdown in venture debt.
“However, the acquisition of Silicon Valley Bank UK by HSBC could provide greater access for biopharmaceutical startups to international markets and global networks of investors. This could open doors to greater biopharmaceutical and startup company collaborations in driving innovation for drug development.”
* Venture financing deals involving SVB Financial Group, SVB Securities, SVB Capital, and Silicon Valley Bank including subsidiaries. Includes all announced and completed venture financing deals globally related to biopharmaceutical drug development