The numbers for royalty financing transactions in the first half of 2025 look promising, with one commentator going so far to state, “Faced with a bleak equity market and tightening credit, drug developers from Boston to Basel turned to royalty monetization as a lifeline.” (see, https://www.p05.org/royalty-financing-rescues-biopharma-a-h1-2025-global-analysis/)
While the numbers have been solid for H1 2025 and signal the continued growth of royalty finance transactions despite unfavorable capital markets, the numbers are trending only slightly ahead of 2024 (on an annualized basis). The aggregate transaction volume for 2025 is annualizing at $5.42 billion, compared to $5.07 billion for 2024 while the average transaction size for 2025 (YTD) is $225.94 million, compared to $220.58 million for 2024. It is notable that the average size of upfront payments for 2025 (YTD) of $114.92 decreased from the 2024 average of $160.60 million, and has been steadily decreasing for the last three years from the high in 2022.
We are seeing more funds enter the royalty finance space, which means that pricing is becoming more competitive, particularly for promising late-stage and commercial products. Given the continued strength in the royalty finance market, we expect that we will continue to see biotech companies look to royalty financing as another arrow in their quiver for raising capital, alongside of equity and debt.
Below is a summary of key takeaways from the H1 2025 YTD royalty finance data:
- Total Deals: 15 (annualized to 30)[1]
- Aggregate Transaction Volume: $2.77 billion (annualizing to $5.54 billion)[4]
- Normalized: $2.71 billion (annualized to $5.42 billion)
- Compared to $5.07 billion in 2024, $6.42 billion in 2023, and $3.86 billion in 2022
- Average Transaction Size: $184.63 million
- Normalized: $225.94 million
- Compared to $220.58 million in 2024, $279.26 million in 2023, and $241.44 million in 2022
- Average Upfront Size: $94.45 million
- Normalized: $114.92 million
- Compared to $160.50 million in 2024, $178.32 million in 2023, and $182.18 million in 2022
The full list of life sciences royalty finance transactions for H1 2025 can be found on Gibson Dunn’s royalty tracker at: https://www.gibsondunn.com/royalty-finance-tracker/
[1] Gibson Dunn acted as counsel in 33% of the royalty finance transactions in 2025 (YTD).
[2] Normalized data only considers data for the typical royalty funds, in order to compare apples-to-apples to past numbers from Gibson Dunn’s Royalty Report, which only considered transactions from the most active royalty funds in the space.
[3] See Gibson Dunn’s Royalty Report for past years data at: https://www.gibsondunn.com/wp-content/uploads/2025/03/Royalty-Report-Royalty-Finance-Transactions-in-the-Life-Sciences-2020-2024.pdf
[4] These figures do not include term loans or equity investments entered into in conjunction with royalty financing transactions (e.g., Royalty Pharma’s $750 million term loan with Revolution Medicines), which if included, would increase the aggregate and average transaction size figures.