Biotechnology Funding: A Quarter-by-Quarter Analysis

All funding deals in the biotechnology market over the last years

Below is the table listing all the deals. You can find our methodology at the end of this page.

If you want a deeper understanding of the market and its current dynamics, get our report covering the Biotechnology Market.

Is biotechnology funding actually getting stronger right now?

Biotechnology funding is getting stronger in dollars, but today's market is clearly more selective than the headline numbers suggest.

We tracked $4.46 billion of funding in Q2 2025, $4.53 billion in Q3, $6.30 billion in Q4, $5.55 billion in Q1 2026 and then $8.05 billion in Q2 2026. At first glance, that looks like a market moving sharply upward.

Deal activity tells a different story. The number of financings climbed from 95 in Q2 2025 to 125 in Q4, then dropped to 110 and finally 94. The market went through a real expansion in late 2025, followed by two quarters in which more money was concentrated into fewer deals.

The middle of the market has been much steadier than the headline funding curve. Once we remove rounds above $50 million, quarterly capital stays around $1.0 billion to $1.2 billion throughout the period. That makes the latest jump easier to read: investors have plenty of money for companies they really want to back, while the broader pool of financings has stopped expanding.

Fresh evidence since our dataset cutoff points in the same direction. BioPharma Dive counted more than $9.1 billion raised by 68 venture-backed biotech companies during the first half of 2026, its strongest first-half total since 2022, while also finding that most recipients already had drugs in clinical testing. More recently, Fierce Biotech's fundraising tracker has continued to record nine-figure rounds for companies with advanced programs. Large checks are still flowing these days; getting into the group receiving them is the harder part.

Quarter	Deals	Capital raised	Median round	Capital excluding >$50M rounds
Q2 2025	95	$4.46B	$39.5M	$1.06B
Q3 2025	108	$4.53B	$44.0M	$963M
Q4 2025	125	$6.30B	$40.75M	$1.06B
Q1 2026	110	$5.55B	$48.0M	$1.17B
Q2 2026	94	$8.05B	$50.0M	$1.04B

What really changed in biotech funding in Q3 2025?

Q3 2025 brought more biotechnology deals, but the extra activity did not translate into much more money across the market.

We counted 108 financings, up 13.7% from Q2, while total capital increased only 1.5%. Capital below the largest rounds actually weakened: after removing financings above $50 million, the quarterly total fell from $1.06 billion to $963 million.

The quarter also became much more geographically diverse. Asia-Pacific jumped from 8.4% to 25% of all deals, yet those companies received only 10.8% of funding. Investors were financing many more companies in the region without writing checks comparable to those seen in North America.

At the upper end, Q3 produced some very large clinical-stage rounds. Kriya Therapeutics raised a $320 million Series D to advance five lead gene-therapy programs, while Odyssey Therapeutics closed a $213 million Series D for its autoimmune pipeline. GlobalData independently described Q3 2025 as a biotech venture-funding recovery and highlighted especially strong growth in later-stage rounds.

So Q3 looks best described as an activity recovery. More companies were getting funded first; broad capital growth had not caught up yet.

Was Q4 2025 the real turning point for biotech funding?

Q4 2025 was the clearest quarter in which biotechnology funding genuinely broadened across more companies.

Deal count reached 125, the high for the period. First financings rose to 29.6% of deals, while Seed and Series A together represented 56% of transactions. Series A alone reached 35.2%.

Those numbers show that Q4 was doing more than producing a few giant rounds. More young companies were getting institutional capital at the same time that overall funding climbed 39.2% to $6.30 billion.

Large financings still boosted the total. Capital after removing rounds above $50 million increased by 9.7%, far less than headline funding. Even so, the direction underneath the megarounds was positive.

Several company-level examples fit that picture. AAVantgarde closed a $141 million Series B in November to advance clinical gene-therapy programs in inherited retinal disease. Aspen Neuroscience raised $115 million in a Series C for its personalized cell-therapy program in Parkinson's disease. Gate Bioscience secured a $65 million Series B to move its molecular-gate medicines into the clinic.

The improvement faded somewhat in the following quarter, so Q4 was not the start of an uninterrupted boom. It was still the strongest breadth quarter we found across the five-quarter period.

Why did biotech funding look weaker in Q1 2026?

Q1 2026 looked weaker because fewer biotechnology deals closed, even though the companies that did raise money were often getting larger rounds.

Deal count fell 12% from Q4 to 110, and capital also fell 12% to $5.55 billion. Yet the median financing rose from $40.75 million to $48 million.

More importantly, the market below the biggest rounds improved. Capital excluding financings above $50 million reached $1.17 billion, the highest level in our five-quarter analysis.

The mix also shifted toward established companies. Follow-ons accounted for 79.1% of financings, while the first-financing share dropped sharply from its Q4 high. The $50 million to below-$100 million range was especially active, with 29 deals.

Beacon Therapeutics is a good example of the kind of company attracting capital during this period. The clinical-stage gene-therapy developer raised more than $75 million in January 2026 to move laru-zova toward commercialization and develop additional candidates.

Q1 was a smaller market by deal count, but the companies clearing investors' funding bar were often raising substantial amounts. One quarter later, that pattern became hard to miss.

Was the Q2 2026 biotech funding surge mostly caused by Isomorphic Labs?

Isomorphic Labs explains a huge part of the Q2 2026 biotech funding spike, although other large rounds were piling up at the same time.

The company's $2.1 billion Series B accounted for 26.1% of all recorded capital in the quarter. Removing it would bring Q2 funding down from $8.05 billion to roughly $5.95 billion.

The financing itself was unusually large even by biotech standards. Thrive Capital led the round, existing investors Alphabet and GV participated, and MGX, Temasek, CapitalG and the UK Sovereign AI Fund joined. Isomorphic Labs said the money would help scale its AI drug-design engine globally and move therapeutic programs toward the clinic.

The rest of the quarter was still rich in large deals. Rounds above $100 million reached 23, compared with 16 in Q1. Yet the number of total financings fell by 16, and capital below $50 million rounds weakened.

That is the real Q2 story. Investors could still commit extraordinary sums to the companies they believed could absorb them, but the wider market did not accelerate with them.

Are biotech investors writing bigger checks across the board?

Biotech checks are getting bigger at the top of the market, while the typical round has moved up much more gradually.

The median financing increased from $39.5 million in Q2 2025 to $50 million in Q2 2026. That is meaningful, but it is nowhere close to what happened to the average round, which reached $94.7 million in the latest quarter.

The difference comes from the upper tail. Q1 2026 was especially strong in the $50 million to below-$100 million bracket, with 29 financings. Q2 then shifted higher: 23 rounds were worth at least $100 million, representing almost one quarter of all deals.

Smaller rounds never disappeared. Q2 2026 still included nine financings below $5 million and 32 between $5 million and $50 million. Investors are continuing to finance companies across a wide range of sizes, but the biggest checks have become much more influential in the overall market.

Deal size	Q2 2025	Q3 2025	Q4 2025	Q1 2026	Q2 2026
Below $5M	8	6	13	4	9
$5M–<$20M	19	14	20	21	14
$20M–<$50M	20	22	22	21	18
$50M–<$100M	20	20	20	29	21
$100M+	15	13	23	16	23
Size undisclosed	13	33	27	19	9

Are new biotech startups getting squeezed out by companies that already raised before?

New biotechnology startups are still raising money today, but follow-on companies absorb far more capital once we move beyond simple deal counts.

First financings represented 20% of deals in Q2 2025, rose to nearly 30% in Q4 and stood at 27.7% in Q2 2026. New companies are clearly still entering the funded biotech ecosystem.

The difference is in check size. By Q2 2026, the median first financing had climbed to $26.7 million, while the median follow-on reached $62 million. Follow-on companies raised $6.93 billion during the quarter, compared with $1.12 billion going to first financings.

BioPharma Dive's H1 2026 review found that most of the large venture-backed recipients it tracked already had drugs in clinical testing. Investors appear willing to finance new science, but the biggest pools of capital are increasingly reserved for companies that have already survived earlier technical and financing hurdles.

The Q4 2025 formation wave shows how quickly that balance can move. For now, startup formation still looks healthy enough while capital allocation remains heavily tilted toward existing companies.

Are early-stage biotech companies still getting funded?

Early-stage biotechnology companies are still getting plenty of deals, although later-stage companies currently win most of the dollars.

Seed and Series A together represented 53.2% of Q2 2026 transactions. Those early-stage financings captured only 27.4% of the capital.

Later stages produced the reverse pattern: 37.2% of transactions attracted 70.6% of funding. Series B was particularly heavy because Isomorphic Labs sits in that stage, but the preference for more mature opportunities extends beyond one round.

Company age supports the same interpretation only loosely, so we would give it less weight. Median observed company age moved from five years in Q2 2025 to three in Q4, six in Q1 2026 and 4.5 in Q2. Q4 also had weak founding-year coverage, which makes that quarter's age figure less reliable.

A cleaner clue comes from what companies were funding. Kriya's $320 million Series D was tied to five clinical gene-therapy programs. Beacon's Series C was aimed partly at commercialization. Aspen's $115 million round supported an ongoing Phase 1/2a program. Investors currently seem most comfortable scaling companies once there is something more tangible than a research platform alone.

GlobalData reached a similar conclusion in its mid-2026 industry review, describing the funding recovery as increasingly concentrated in later-stage, lower-risk assets.

Did therapeutics take over biotechnology funding?

Therapeutics Discovery Platforms have become the dominant destination for biotechnology capital, and the pattern holds across every quarter we studied.

The category represented 63.2% of deals in Q2 2025 and 70.2% in Q2 2026. Its share of funding moved from 75.4% to 89.9% over the same endpoints.

The gap between deal share and capital share is important. Therapeutics companies already account for most financings, yet they attract an even larger share of the money. In every quarter, their funding intensity remained above 1.

Q4 2025 was the extreme case, when the category absorbed 93% of all recorded capital. Q2 2026 brought another wave of very large therapeutics financing, led by Isomorphic Labs.

The company-level use of proceeds fits the numbers. Isomorphic is pushing therapeutic programs toward clinical development. Odyssey's $213 million Series D backed autoimmune medicines. Gate Bioscience used its Series B to move programs toward the clinic. RQ Bio's $115 million Series A in June 2026 was raised specifically to advance a long-acting influenza antibody toward clinical development.

Therapeutics is the most durable category story in our analysis. The money keeps following programs investors believe can ultimately become medicines.

Which biotech categories are actually gaining or losing investor interest?

Diagnostics has lost clear ground, while cell therapy and gene editing show more encouraging but less consistent funding patterns.

Diagnostic Technology Firms went from 17 financings in Q2 2025 to six in Q2 2026. Their capital share fell from 10.3% to 1.1%. We see fewer deals and much less money, making this one of the cleanest declines in the dataset.

Cell Therapy Developers moved in the opposite direction on deal count. Their share rose from 4.2% in Q2 2025 to roughly 9% to 11% in subsequent quarters. The capital attached to those deals has remained relatively modest, however, so the category has gained breadth faster than financial weight.

Gene editing has been more erratic. Seven financings appeared in both Q2 and Q3 2025, activity then weakened sharply, and four deals appeared in Q2 2026 with a $125 million median. There is a rebound there, but the history is too uneven to call it durable yet.

Recent real-world developments give cell and gene therapy a bit more support beyond the financing data. AAVantgarde raised $141 million for clinical gene-therapy programs, Aspen Neuroscience raised $115 million for a cell-therapy program, and the FDA announced additional regulatory flexibility for cell and gene therapies in early 2026. The agency also approved new gene therapies during the year, including the first gene therapy for OTOF-associated genetic hearing loss.

The investment picture is becoming more nuanced. Diagnostics has clearly slipped. Cell and gene therapies, meanwhile, can still attract serious capital when companies show clinical progress or a credible route into human development.

Category	Q2 2025	Q2 2026	Current read
Therapeutics Discovery Platforms	63.2% of deals	70.2% of deals	Dominant and capital-heavy
Diagnostic Technology Firms	17 deals	6 deals	Clear decline
Cell Therapy Developers	4.2% of deals	Around 9–11% after Q2 2025	More deals, lighter capital
Gene Editing	7 deals	4 deals, $125M median	Rebounding, still volatile
Bioprocessing tools	Small niche	Small niche	Stable, low capital intensity
Synthetic biology	Few observations	Few observations	Too little evidence

Did Europe really catch up with North America in biotech funding?

Europe had an exceptional Q2 2026 for biotechnology capital, but North America remains the more consistent funding center.

Europe's share of deals fell from 31.8% in Q1 2026 to 27.7% in Q2, while its share of capital jumped from 10.6% to 40.6%. London-based Isomorphic Labs and its $2.1 billion financing explain a large part of that leap.

North America stayed ahead in deal count throughout the period, generally representing a little over half of all financings. Its capital share moved around much more because a few large transactions can quickly reshape a quarter.

Asia-Pacific gives us the opposite example. Its share of deals jumped to 25% in Q3 2025, while its funding share reached only 10.8%. The volume increase then faded over the following quarters.

The three regions are telling different stories. North America has the deepest and most persistent deal flow. Europe can suddenly post huge capital totals when a major financing lands there. Asia-Pacific showed that broader deal activity does not automatically bring the same jump in dollars.

Are the same biotech VCs starting to dominate more deals?

Biotech lead investing still involves a wide group of firms, although a small specialist core keeps showing up again and again.

We identified 85 unique disclosed leads in Q2 2025, 113 in Q3, 109 in Q4, 109 again in Q1 2026 and 90 in Q2. The latest decline came alongside a lower deal count, so it does not by itself show that the lead-investor market suddenly narrowed.

The repeat names are more interesting. Forbion appears throughout the period. OrbiMed becomes increasingly visible from Q3 2025 onward. ARCH Venture Partners repeatedly leads or co-leads deals, while Janus Henderson appears on four deals in both Q1 and Q2 2026.

RA Capital stands out most clearly in our quarterly counts, with two disclosed lead or co-lead appearances in Q4 2025, four in Q1 2026 and six in Q2.

That activity has continued beyond our dataset cutoff. BioPharma Dive reported in September 2026 that RA Capital had already participated in four biotechnology financings during that month alone. The firm looks increasingly active, even though the overall investor base remains broad.

There is still a large biotech financing ecosystem. But a recognizable group of specialists keeps returning to the companies attracting the strongest rounds.

Why are strategic investors showing up more often in biotech now?

Strategic investors are becoming more visible again in biotechnology funding, especially once companies reach larger therapeutics rounds.

Strategic-backed deals fell to 23.1% of all financings in Q3 2025, then recovered across the following quarters and reached 37.2% in Q2 2026.

The rounds involving those investors also became larger. Their median size rose from $43 million in Q2 2025 to $93 million by Q2 2026.

The company examples make the pattern easier to see. Lilly joined Gate Bioscience's $65 million Series B alongside Forbion and existing investors. Isomorphic Labs brought together Alphabet, GV and CapitalG alongside institutional and sovereign capital. RQ Bio's $115 million Series A combined specialist investors with founding investor LifeArc.

Strategic investors are showing up where there is a concrete connection to drug pipelines, discovery capabilities or future commercial assets. In Q2 2026, 30 of the 35 strategic-backed financings in our analysis were Therapeutics Discovery Platforms.

At the moment, strategic capital looks targeted rather than market-wide. It is clustering around companies that have reached a meaningful development or platform milestone.

Quarter	Strategic-backed deals	Share of deals	Median strategic-backed round
Q2 2025	37	38.9%	$43M
Q3 2025	25	23.1%	$60M
Q4 2025	37	29.6%	$77.5M
Q1 2026	31	28.2%	$53.5M
Q2 2026	35	37.2%	$93M

Is biotech funding getting concentrated around fewer winners?

Yes — biotechnology funding has become much more concentrated at the top, particularly in the latest complete quarter.

The top five Q2 2026 financings accounted for 42% of all funding. During the previous four quarters, the equivalent figure stayed between roughly 23% and 29%.

Rounds above $50 million generated 87.1% of the quarter's dollars, and financings above $100 million supplied 69.6%. At the same time, total deal count was falling.

Concentration is mainly happening in dollars rather than through the complete disappearance of smaller companies. Seed financings remain common, first financings still occur and dozens of companies continue to raise below $50 million.

The latest outside evidence says large clinical-stage rounds are still a major feature of the market. Fierce Biotech's September 2026 tracker, for example, recorded Sling Therapeutics raising $123 million to fund a Phase 3 program. Encoded Therapeutics separately raised $275 million to advance its Dravet syndrome program and manufacturing capacity.

Investors are still willing to put enormous amounts behind companies that have moved far enough to justify the risk. They are simply doing it for a relatively small part of the market.

Is the biotech funding market actually healthy right now?

The biotech funding market is healthy for strong companies, but fundraising conditions remain tough enough that calling the whole market easy would be misleading.

There is plenty to like. Venture funding is capable of producing multi-billion-dollar quarters. First financings continue. The median round has risen. Strategic investors are active. Specialist VCs keep deploying capital. Therapeutics companies with credible development plans can still raise nine figures.

The wider financing ecosystem also improved during 2026. Generate Biomedicines priced a $400 million IPO in February, while Kailera Therapeutics completed an IPO that generated roughly $718.8 million in gross proceeds in April. Those deals suggest that public-market financing routes are opening again for selected companies.

IQVIA's Global R&D Trends 2026 report describes biopharma funding as still well above pre-pandemic levels despite slowing in 2025. GlobalData's mid-year work reaches a similar conclusion from another angle: the funding recovery is real, while investors are concentrating on lower-risk and more mature assets.

That selectivity is still visible now. In our quarterly work, deal counts weakened after the Q4 2025 peak, capital became much more dependent on large rounds, and therapeutics absorbed a growing share of the money. Recent fundraising after our June cutoff continues to feature large checks for companies with clear clinical programs.

Selective abundance is probably the cleanest description. Capital is available, sometimes in extraordinary amounts, but investors increasingly want convincing evidence that a company deserves to absorb it.

What is the biotech funding trend actually telling us?

Biotechnology funding moved through three fairly distinct phases between Q2 2025 and Q2 2026.

The first was a broadening phase. Deal count rose through Q3 and Q4 2025, more young companies entered the mix and Q4 produced the strongest combination of first financings, early-stage activity and total transactions.

The second was a filtering phase in Q1 2026. Fewer companies raised money, yet the median round increased and the middle of the market remained surprisingly strong. Investors were already becoming more selective without withdrawing from biotech altogether.

The third phase arrived in Q2 2026, when capital surged toward exceptionally large financings. Deal activity continued to shrink while megarounds pulled the total sharply upward.

Therapeutics is the most durable winner across that progression. Diagnostics lost both deal activity and capital share. Cell and gene therapy looks more mixed, with credible clinical programs still able to attract substantial rounds. Early-stage companies remain present, though later-stage and follow-on businesses collect most of the dollars.

Investor behavior points in the same direction. The lead-investor universe remains fairly broad, while recurring specialists such as RA Capital, Forbion, OrbiMed and ARCH keep appearing. Strategic participation has also rebuilt, particularly around larger therapeutics financings.

The biggest trap is equating rising funding totals with universally easier fundraising. The evidence says something more specific: biotech investors have regained the ability and willingness to write very large checks, while becoming increasingly choosy about where those checks go.