[co-author: Carlos Juarez]*
The PIPE market has proven to be resilient during times of stress. In 2023, issuers raised over $33.8 billion in 809 PIPE transactions according to PrivateRaise. This is considerably less than in 2021 during which issuers raised over $108.8 billion. However, PIPE transaction activity has accelerated during the first five months of 2024. Between January 1 and May 31, 2024, issuers have raised $14.5 billion, or an increase of 34% in the amount raised over the same period in 2023.
Life sciences companies have always been particularly dependent on PIPE transactions. Life sciences issuers accounted for 44% of all PIPE transactions in 2023 and for 55% of PIPE transactions through May 31, 2024. Life sciences companies raised over $8.5 billion across 187 PIPE transactions during the first five months of 2024, with deals raising an average of $45.6 million. Of all life sciences equity follow-on offerings undertaken in 2024, PIPE transactions accounted for 32% in 2024 through mid-March.
There are various reasons why issuers choose PIPE transactions—often issuers are motivated by the quick execution and in other instances PIPE transactions may the best financing alternative to raise capital for an acquisition, for example. See our At A Glance: PIPE Transactions infographic for additional data.
*J.D. candidate at the Villanova University Charles Widger School of Law.
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