The recent economic turmoil has impacted venture capital (VC) funding for the Life Sciences sector, as money raised plummeted towards the end of 2022, and ended the year down 28% from 2021, according to a recent report from Cushman & Wakefield. That being said, San Diego remains a strong force in the sector, ranking third in the U.S. with $2.5 billion in VC funding.

San Diego also pulled-in the second largest deal of 2022, when pharmaceutical company Resilience raised $1.3 billion. The top three life sciences hub markets continued to pull in the majority of funding in 2022, with San Francisco, Boston and San Diego accounting for 66% of all VC money. Drug discovery and biotech remain the hottest industries, grabbing 72% of 2022 funding.

Cushman & Wakefield’s outlook for 2023 is muted due to the potential of a global economic slowdown. The firm expects VC capital will become more conservative and uncertainty in the equities market will muddy the outlook for IPO activity.