2025: A turbulent year for the biotechnology industry

Depending on whom you address, the answers assessing the year 2025 were highly differentiated.

The sentiment of CEOs of biotech companies is clear and not split at all. The year 2025 has been “morose” and their expectations for the first semester of 2026 are not high. According to an EndPoints survey published in December, the moral of leaders is rated at 78 out of 100. Financing of innovative projects is at the lowest they have experienced in a decade. The situation is slightly better for assets which have already been derisked and even more so for those in the latest stage of development. The previously unheard feature, expressed by several CEOs, is their lack of trust in the capacity of the US FDA to perform independent and accurate evaluation of scientific progress due to the massive loss of competencies at the agency. Amongst interviewed CEOs, some were extremely worried about the capacity of Marty Makary, the current FDA commissioner, to resist increasing pressure and injunctions from Robert Jr. Kennedy, the Secretary of Health and Human Services, who is challenging and even overturning worldwide validated scientific realities. 

Every single European CRO leader with whom we exchanged, delivered the same message: “2025 was an awful year”. The industry is reducing its overall R&D activity; many contracts underwent early termination or were renegotiated on less favourable terms and novel ones were scarce. In Europe layoffs were massive and prospects for 2026 are gloomy. 

Scientists are extremely worried about their future. For the first time ever, in the Boston area, laid off scientists do not find a new job next day, not next month, not at all. In Massachusetts more than 4,000 employees have lost their jobs and laboratory space vacancy is at 22%. The problem is not lack of skills or inexperience of the applying candidates, but the industry is at the bottom of a cycle where capital investment has been retracting for years. Furthermore, the skills of scientists being laid off does not match the roles which remain open. Bench scientists making discoveries are not always best suited to become regulatory experts. The current need of competencies shifts from early stage to late-stage jobs of the value chain. Scarcity of open positions and increased difficulties in securing long-term working permits or visas is already discouraging foreign post-doctoral students to come to the United States. Will China become the next eldorado for scientists working in biotechnology?

Everybody agrees that China is at the same time a threat and an opportunity. The opportunity to conduct high quality clinical trials much faster than anywhere else in the world. A threat because China is no longer just developing me-too drugs or even fast followers to be hopefully registered with international agencies. The scientific community is flabbergasted to discover that Chinese biotechnology companies, founded less than 15 years ago, are now producing highly innovative products which trigger genuine interest within large western pharma companies. “The pace of the innovation curve in China is increasing very rapidly” according to one of the Endpoint panellists.

 Investors see the glass more than half full and recent figures kind of support their sentiment. For them, 2025 represents a clear inflection point with 48 M&A deals versus 35 the previous year. The aggregate value of these deals is superior to $110 billion in upfront money and 22 deals were linked with upfront cash above $1 billion. In addition, in 2025, there were 3 deals valued at more than $10 billion compared to none with such a value in 2024. These figures are not to be challenged but they are hiding one reality. Most of these investments are part of a "conviction-driven market" where money has gone almost exclusively to late-stage assets and rarely to proof of concept (POC) studies. The most striking example is Abivax, a French biotechnology company, many had never heard of before July 23^rd, 2025. Concurrent with the disclosure of impressive phase 3 results for the treatment of ulcerative colitis and soon to be expected phase 2 results for the treatment of Crohn’s disease, Abivax announced a public offering of American Depositary Shares with the intention to raise $400 million. After the dissemination of the trial results and the record high positive response of the international share market, gross receipts from the offering rose to $747.5 million in less than two hours.

In 2025 big money went to assets where value could easily be determined and where risks were at their minimum. In the first semester of 2026 investors now expect to see 10 to 12 IPOs and thus allow fresh liquidities to flowing back into the system and hopefully not only into late-stage assets. “If the IPO market becomes more fluid, things will improve” said one panellist at the Endpoint News Conference. 

The spirit and the expected great enthusiasm of the JPMorgan Healthcare Conference, occurring in San Francisco, from January 12-15, will set the stage for the remaining of 2026.

Paris, January 7, 2026

^{This document has been prepared by Jean-Claude Muller and is provided for information purposes only. The information contained herein has been obtained from sources believed to be reliable but is not warranted to be accurate or complete. The views presented are those of the author at the time of writing and are subject to change. Jean-Claude Muller has no obligation to update these opinions or the information presented.}