Is the Biotechnology Market growing now?
In our biotechnology market deck, you will find everything you need to understand the market
SUMMARY
Yes. The Biotechnology Market is growing now, but the growth is concentrated in companies and assets that have already removed some scientific or clinical risk.
The strongest evidence is commercial rather than speculative. US and European public biotech revenue reached about $232 billion in 2025, up 13%, while a record 72 companies generated at least $500 million in annual revenue.
Capital has come back much faster than startup formation. First-half biopharma financing roughly doubled year over year, yet seed and Series A capital fell 15% and disclosed early-stage round count dropped to a decade low. Investors are concentrating larger checks into fewer companies with human data, late-stage programs or unusually convincing biology.
The exit market is useful again. US biopharma IPOs raised about $5 billion in the first half of 2026, already more than the full-year amount raised in each year from 2022 through 2025, even though listing volume remains far below the 2021 peak.
Big Pharma is the most powerful buyer underneath the recovery. Roughly $230 billion of existing biopharma revenue faces loss-of-exclusivity pressure by 2030, while emerging biopharma companies control about 70% of clinical-stage assets.
That pressure is showing up in both acquisitions and licensing. IQVIA counted roughly $130 billion of qualifying biopharma M&A in the first half of 2026, while J.P. Morgan and DealForma tracked $166.7 billion of announced R&D licensing value.
China is becoming a much larger part of that external innovation market. In J.P. Morgan and DealForma's qualifying dataset, Chinese assets rose from 5% of global large-pharma licensing deal count in 2021 to 50% in the first quarter of 2026.
The scientific engine is still producing. IQVIA counted 79 novel active substances launched globally in 2025, but clinical development remains slow and trial starts weakened in several therapeutic areas, so better financing has not yet translated into a clearly more productive R&D system.
The main weakness is breadth. Biotech stocks, M&A, licensing, IPO proceeds and later-stage financing can all look strong while the earliest part of the company pipeline remains under pressure.
That is why the best description is a selective expansion rather than a full boom. Biotechnology is commercially larger, better financed and more strategically important to pharmaceutical companies than it was a year ago, but the recovery has not yet reached the whole startup ecosystem.
This market map, featured in our biotechnology market deck, highlights top companies and startups in the biotechnology market
Is the Biotechnology Market Growing Now?
Is biotechnology actually growing right now, or just bouncing back from a bad few years?
The biotechnology market is genuinely growing right now, although the recovery is much stronger for proven companies and clinical-stage assets than for brand-new biotech startups.
For this article, we are mainly looking at the commercial and investable biotech industry around therapeutics, biologics, drug-development platforms and closely related technologies. We are not counting the entire pharmaceutical, hospital or medical-device industries simply because they sometimes appear inside enormous “biotechnology market” forecasts.
That distinction changes the answer. Several things that were weak during the biotech downturn have turned at the same time. Public biotech revenue has grown for three consecutive years. Industry market capitalization has recovered strongly. Financing has accelerated. IPO proceeds are rising again. Pharmaceutical companies are spending heavily on acquisitions and licensing. New medicines are still reaching patients at a historically high rate.
There is one big hole in that recovery: the earliest stage of biotech remains difficult. Seed and Series A activity is weak, development timelines remain long, and companies without convincing clinical evidence can still struggle badly for capital.
So when we say biotechnology is growing today, we mean the industry is expanding commercially and attracting more capital again. We do not mean every biotech company is benefiting.
If you want more recent data on this point, please see our latest biotechnology market report.
Is biotech revenue actually growing today?
Biotech revenue is growing quickly enough that we can rule out the idea that the current recovery exists only in stock prices and funding announcements.
EY’s latest Biotech Beyond Borders analysis puts 2025 revenue for US and European public biotechnology companies at about $232 billion, up 13% from the previous year. The previous year had already delivered 6.8% growth, making this the third consecutive year of rising biotech revenue.
In dollar terms, the industry added roughly $27 billion of annual sales in one year. That is already a meaningful commercial market on its own, rather than a collection of development-stage companies waiting for future products.
The number of substantial biotech businesses is also increasing. EY counted a record 72 companies generating at least $500 million of annual revenue. Biotechnology has historically had thousands of companies but a much smaller group with serious commercial sales. That group is getting larger.
Recent pharmaceutical results point in the same direction from the customer side. In the latest quarter, nine of the world’s 25 largest drugmakers posted double-digit year-over-year revenue growth, according to Fierce Pharma’s comparison, while only one recorded a decline and that decline was below 1%. Pharmaceutical spending is broader than biotech, but strong sales give the companies buying and licensing biotech assets more room to keep investing.
The commercial side of biotechnology therefore looks healthier today than it did during the financing-led boom earlier in the decade. More of the industry’s value is now being supported by medicines that people are actually buying.
As this chart shows, and as featured in our biotechnology market deck, search interest in biotech has been trending upward
Are biotech stocks really back now?
Biotech stocks have made a serious comeback, and the latest market data still shows investors paying much more for the sector than they were a year ago.
State Street’s latest published month-end figures show the SPDR S&P Biotech ETF, or XBI, up about 20.7% year to date and roughly 72.5% over one year. Its latest published NAV is around $166. The fund holds more than 150 biotechnology companies and uses a modified equal-weight approach, so the move is much broader than a rally in one or two giant drugmakers.
EY sees the same recovery across public biotechnology companies from another angle. Industry market capitalization rose 28.8% to approximately $1.65 trillion in 2025.
There has still been plenty of volatility. XBI fell about 7% during the latest reported month before subsequently recovering part of that drop. That fits biotech pretty well: investors are back, but a clinical failure, regulatory decision or bad trial result can still erase billions of dollars very quickly.
We would therefore treat public markets as supporting evidence rather than the main proof of biotechnology growth. Stocks are stronger because investors see better financing conditions, more acquisitions and more valuable clinical assets. The business evidence underneath the rally is more important than the rally itself.
Is biotech funding really growing again?
Biotech financing has snapped back sharply this year, with first-half capital raised roughly doubling from the same period last year.
BioWorld counted $60.14 billion raised across biopharma financing categories during the first half of 2026. The comparable figure in 2025 was $29.53 billion. That works out to an increase of slightly more than 100%.
The number of financings increased much less, from 501 to 567. We therefore calculated the rough amount of capital raised per transaction: about $59 million in the earlier period versus around $106 million this year. Different financing types are mixed together in that calculation, so it should not be read as the average venture round. It does show that far more money is being concentrated into the companies that can raise.
The historical comparison keeps the rebound in perspective. The first half of 2024 produced $70.32 billion, still above this year’s $60.14 billion. Biotechnology has recovered dramatically from last year’s financing drought without yet returning to the highest recent level.
That is a pretty good description of the market today: capital is coming back aggressively, but investors have not returned to funding almost anything with a biotech label.
| First-half biopharma financing | Capital raised | Transactions | Rough capital per transaction |
|---|---|---|---|
| 2025 | $29.53B | 501 | ~$59M |
| 2026 | $60.14B | 567 | ~$106M |
| Change | ~+104% | ~+13% | ~+80% |
This chart, featured in our biotechnology market deck, illustrates yearly venture capital funding for biotechnology startups
Are new biotech startups getting funded too?
New biotech startups are still having a much harder time raising money, which is the clearest weakness in the current biotechnology growth story.
BioCentury found that biotech companies raised about $4.4 billion through seed and Series A rounds during the first half of 2026. That was 15% below the same period last year and 47% below the first-half peak reached in 2021.
Round count looks worse. BioCentury says the number of disclosed seed and Series A financings fell to its lowest first-half level in a decade.
Investors are also making bigger bets on fewer early companies. Earlier in the year, BioCentury found that the median early-stage round was tracking near a ten-year high even while total round count was falling. That pattern is almost the opposite of an indiscriminate startup boom.
Recent fundraisings make the investor preference fairly obvious. Vaderis raised $152 million while running a Phase III program. Expedition Therapeutics raised $115 million around a Phase II drug. Epicrispr raised $90 million after producing early human data. LifeMine raised $263 million to move its transplant program further into the clinic. Companies with something concrete to test in humans are attracting serious money.
The biotechnology market can therefore grow while startup formation stays weak. These days, investors are much more willing to finance evidence than possibility.
If you want more recent data on this point, please see our latest biotechnology market report.
Is the biotech IPO market finally open again?
The biotech IPO market is open again now, but only a fairly small group of companies can get through it.
J.P. Morgan and DealForma counted 13 US biopharma IPOs raising about $5 billion during the first half of 2026. That already exceeded the full-year amount raised in every year from 2022 through 2025.
The contrast with last year is large. Only nine qualifying biopharma IPOs raised $1.6 billion during all of 2025 in J.P. Morgan’s dataset. By the end of the first quarter this year, six IPOs had already raised $1.8 billion.
Large offerings have done much of the work. Kailera Therapeutics raised hundreds of millions of dollars around its obesity pipeline, while Parabilis Medicines subsequently priced an even larger oncology IPO. Public investors are clearly willing to write big checks again when they see a company they really want.
The number of listings remains nowhere near 2021, when 99 qualifying biopharma IPOs raised about $15.4 billion. Today’s IPO market is useful again without being easy. That is enough to improve the biotechnology funding cycle because strong private companies once again have a realistic route to the public market.
| Biopharma IPO period | IPO count | Capital raised |
|---|---|---|
| Full-year 2025 | 9 | $1.6B |
| H1 2026 | 13 | $5.0B |
| 2021 peak | 99 | $15.4B |
This chart, featured in our biotechnology market deck, looks at Vertex’s strategy in biotechnology
Are pharmaceutical companies buying more biotech companies now?
Big pharmaceutical companies are buying biotech at a pace that clearly qualifies as a current M&A boom.
Using its threshold of transactions worth at least $250 million, IQVIA counted 42 biopharma acquisitions worth roughly $130 billion during the first half of 2026. Full-year 2025 produced about $133 billion. In other words, six months of current dealmaking almost matched the previous twelve months.
The increase did not come from one absurdly large megamerger. Nine deals were worth at least $5 billion, while average transaction value increased from roughly $2.7 billion last year to $3.1 billion this year.
Other databases use different definitions but show the same acceleration. J.P. Morgan and DealForma counted $96 billion of biopharma M&A across 80 transactions during the first half, including $55.1 billion in the second quarter alone. BioWorld’s broader deal dataset also recorded its strongest first half on record.
What buyers are paying for is equally revealing. Late-stage drugs, assets approaching important readouts and programs that could reach the market relatively soon are commanding the highest attention. Big Pharma currently seems happy to pay billions to save several years of internal development.
Biotech has become a crucial external R&D market for companies that cannot generate enough new products internally.
Why does Big Pharma need biotechnology so badly?
Big Pharma currently needs biotechnology because more than $230 billion of existing biopharma revenue faces loss-of-exclusivity pressure by 2030 while smaller companies control most of the industry’s clinical pipeline.
IQVIA estimates that the coming patent cliff puts more than $230 billion of revenue at risk by the end of the decade. Products approaching major exclusivity losses include Keytruda, Gardasil, Eliquis, Jardiance, Opdivo, Darzalex and Cosentyx. At some pharmaceutical companies, the exposed products represent as much as 65% of current sales.
At the same time, emerging biopharma companies now control about 70% of clinical-stage assets across the industry pipeline, according to IQVIA. Many of those assets remain unpartnered.
That leaves large pharmaceutical companies with a straightforward problem. Their old drugs will lose exclusivity, yet much of the science that could replace those sales sits outside their own companies.
They also have the balance sheets to do something about it. IQVIA estimates Big Pharma’s current deal capacity at approximately $1.3 trillion.
That combination gives biotechnology a very powerful buyer. Venture investors can become cautious, IPO windows can close and biotech stocks can fall, but pharmaceutical companies still need new drugs. Unless large drugmakers suddenly become dramatically better at producing all of those drugs internally, they will keep shopping in biotech.
If you want more recent data on this point, please see our latest biotechnology market report.
This chart, featured in our biotechnology market deck, illustrates yearly funding for biotechnology startups
Is biotech licensing growing as fast as biotech M&A?
Biotech licensing is currently even larger than the acquisition market by announced value, showing that pharmaceutical companies are spreading their bets across far more assets than they could buy outright.
J.P. Morgan and DealForma counted $166.7 billion of announced biopharma R&D licensing value during the first half of 2026.
The headline requires some caution. Only 6% of that announced value was paid upfront. Roughly speaking, that puts immediate upfront consideration around $10 billion, with most of the remaining value depending on future development, regulatory or commercial milestones.
The structure is useful in its own right. Pharmaceutical companies want access to a lot of biotech innovation, but they do not want to absorb all of the scientific risk immediately. Licensing lets them reserve promising drugs and pay progressively as the evidence improves.
A very fresh example is Biohaven’s epilepsy partnership with SK Biopharmaceuticals. SK agreed to pay $350 million upfront for worldwide rights to Biohaven’s opakalim and related Kv7 platform, plus another $50 million in near-term payments. The total possible economic value reaches $795 million once milestones and existing obligations are included. Biohaven gets substantial cash without having to build the full commercial operation itself.
Acquisition statistics alone therefore understate demand for biotechnology. A successful biotech asset can currently attract a buyer, a licensee or sometimes several competing partners.
Is China becoming one of the main centers of biotechnology?
China is now one of the most important sources of new biotech drugs in the world, and its rise is happening much faster than the industry’s old US-Europe structure would suggest.
J.P. Morgan and DealForma tracked large pharmaceutical licensing deals involving Chinese biotech companies where at least $50 million was paid upfront. In 2021, China represented only 5% of qualifying global deal count and 4% of upfront dollars. By 2025, those shares had reached 39% and 36%.
During the first quarter of 2026, Chinese assets represented 50% of qualifying deal count and 75% of upfront dollars. Seven deals generated about $2.65 billion of upfront cash and equity in only three months.
The freshest evidence suggests the shift has kept moving. Hansoh Pharmaceutical recently said China now accounts for about 30% of investigational medicines globally. Evaluate data cited alongside Hansoh’s results projects Chinese assets could represent more than two-thirds of total licensing deal value this year, versus roughly half last year and only around 5% less than five years ago.
Hansoh itself now has more than 40 innovative medicine candidates across over 70 clinical trials and increased first-half R&D spending by 20.7%. Large Western drugmakers including GSK, Merck, Regeneron and Roche have all done deals around Hansoh assets.
The biotechnology market is becoming geographically larger as well as financially larger. China is creating another deep pool of drugs that global pharmaceutical companies can buy or license.
| China-origin large-pharma licensing | 2021 | 2025 | Q1 2026 |
|---|---|---|---|
| Share of qualifying global deals | 5% | 39% | 50% |
| Share of qualifying upfront dollars | 4% | 36% | 75% |
| Qualifying deals | 2 | 19 | 7 |
This chart, featured in our biotechnology market deck, compares the main business model options for biotech platform companies
Are biotech companies still producing enough new medicines?
Biotechnology is still turning research into new medicines at a high rate, which gives the current financial recovery a real scientific base.
IQVIA counted 79 novel active substances launched globally in 2025, up from 65 the year before. Thirty were global first-in-class launches. The five-year total reached 388, and IQVIA expects roughly 70 to 80 new active substances per year over the next five years based on the late-stage pipeline and historical success rates.
The US approval pipeline also remains busy. The FDA’s current 2026 novel-drug list contains 33 approvals through its latest published update. The agency has since announced another first-in-class targeted treatment for metastatic pancreatic cancer.
That is useful context because biotechnology can experience a financing boom without a corresponding increase in useful products. The industry has seen that before. Currently, capital markets are improving while a large number of new medicines are still reaching patients.
The mix is also getting more technically interesting. Recent approvals and launches span targeted oncology, immunology, rare diseases, metabolic drugs, neurological medicines and engineered biological therapies. We are seeing commercial output across several branches of modern biotech rather than one technology carrying the entire industry.
Is biotech R&D actually getting more productive?
Biotech R&D is busy, but productivity is still one of the weakest parts of the market today.
IQVIA’s latest Global R&D Trends report found that most therapeutic areas recorded small declines in clinical-trial starts between 2024 and 2025. Oncology starts fell 4% overall, although later-stage oncology activity was stronger, with Phase II starts up 3% and Phase III starts up 4%.
Emerging biopharma companies still do most of the work. They accounted for 68% of global clinical-trial starts in 2025, up from 56% in 2019. That makes the health of smaller biotechnology companies important far beyond their own valuations: they are running most of the industry’s experiments.
Speed remains frustrating. IQVIA says end-to-end clinical development timelines have returned to around the longest point of the past decade, while the gaps between successive trials increased by about three months. More investment is entering biotechnology without yet producing a clearly faster drug-development machine.
AI may eventually change part of that equation. IQVIA has found an early but credible improvement in Phase I success rates among AI-enabled programs from emerging biopharma companies, without a corresponding deterioration in Phase II results. The evidence is still too young to tell us whether that advantage survives Phase III.
Market growth and R&D productivity are moving on different tracks for now. Biotechnology can expand even while developing a successful drug remains painfully slow and expensive. If those timelines eventually improve, the industry gets a much stronger second growth engine.
This chart, featured in our biotechnology market deck, breaks down revenue across customer segments in the biotechnology market
Where is biotech money actually going right now?
Biotech money these days is flowing toward companies that already have clinical evidence, late-stage programs or unusually credible biology.
The latest large private rounds make the pattern easy to see. LifeMine Therapeutics raised $263 million around its transplant program. Vaderis Therapeutics raised $152 million while launching a Phase III study. Expedition Therapeutics raised $115 million around a Phase II respiratory drug. Epicrispr raised $90 million after showing early human data in a rare muscle disease. Infinimmune raised $75 million to move two antibody programs toward the clinic.
Those five recent financings alone add up to $695 million. Four of the five companies already have programs in human testing.
That concentration lines up almost perfectly with the broader market data. Seed and Series A round count is weak, while later-stage venture financing, IPOs, licensing and M&A are much stronger. Investors are willing to spend heavily once uncertainty has been removed.
Therapeutically, oncology and immunology continue to pull a large share of capital. Obesity and metabolic medicine remain major areas of interest. Rare diseases can still command large rounds when clinical evidence is strong. AI-enabled discovery attracts money when investors can connect the platform to actual drug candidates.
The easiest biotech pitch to fund today is getting clearer: show investors a drug, show them evidence and show them who might eventually buy it.
If you want more recent data on this point, please see our latest biotechnology market report.
Are biotech layoffs still a warning sign?
Biotech employment is still messy, but the latest hiring and layoff data looks noticeably better than it did last year.
Fierce Biotech counted 33 biopharma companies announcing layoffs or shutdowns in the first quarter of 2026 and only 17 in the second quarter. The comparable second quarter of 2025 had 64 layoff announcements. On company count, that is a huge improvement.
BioSpace reaches a similar conclusion with a different dataset. It found 58% fewer biopharma companies making or planning workforce reductions during the first half of 2026 than a year earlier.
The number of affected workers has fallen much less. BioSpace counted roughly 14,427 people affected during the first half, only 2% below last year, because three enormous restructuring programs at BioNTech, Viatris and Takeda represented most of the cuts.
Hiring is finally moving in the other direction. BioSpace says live job postings increased 15% year over year and 12% quarter over quarter during the second quarter, marking a third consecutive quarterly increase.
We would not call biotech employment strong yet. Failed trials still trigger brutal cuts, and some large companies are restructuring thousands of positions. But lately the pain has become much more concentrated. Fewer companies are cutting while job openings are rising, which fits the broader picture of a selective recovery.
This chart, featured in our biotechnology market deck, shows how at-home genetic testing technology has evolved over time
What could stop the biotechnology market from growing?
The biggest risk to biotechnology growth now is that too few companies are participating in the recovery.
Early-stage financing gives us the clearest warning. Seed and Series A capital is down 15%, round count has fallen to a decade low and investors increasingly prefer companies where clinical risk has already been reduced. If that lasts for years, the industry eventually ends up with fewer new companies feeding tomorrow’s acquisition and drug-development pipeline.
Long development times create another problem. A molecule can take around a decade to move through the clinical system, and IQVIA says recent productivity improvements have slipped. Biotechnology can tolerate expensive development when successful drugs are extremely valuable. It becomes much harder when timelines lengthen while payers and governments push drug prices downward.
Policy risk is unusually important as well. FDA staffing, NIH research funding, drug-pricing policy, tariffs and rules governing Chinese biotechnology can all change the expected economics of programs that will not reach the market for years.
There is also a valuation risk. Public biotech has risen sharply, large private rounds are appearing again and pharmaceutical companies are paying billions for attractive assets. Clinical results will eventually have to justify those prices. Biotechnology has a ruthless way of correcting enthusiasm when pivotal data disappoints.
For now, those risks are narrowing the recovery rather than reversing it. The warning sign worth watching most closely is early-stage funding. If new-company formation starts rising alongside M&A, licensing and public markets, the growth story becomes considerably stronger.
If you want more recent data on this point, please see our latest biotechnology market report.
So, is the biotechnology market growing now?
Yes. The biotechnology market is growing now, and the latest evidence is strong enough that calling it merely a rebound understates what is happening.
Commercial biotechnology revenue grew 13% to about $232 billion last year, following growth the year before. Public biotech valuations have recovered sharply. First-half financing more than doubled year over year. IPO proceeds already exceeded every full-year total from 2022 through 2025. Big Pharma completed roughly $130 billion of qualifying acquisitions in six months under IQVIA’s methodology, almost matching the previous full year. Licensing has been even busier.
The science is still feeding the market. IQVIA counted 79 novel active substances launched globally last year, while the FDA continues to add new medicines this year. Emerging biopharma companies run more than two-thirds of global clinical-trial starts, giving large pharmaceutical companies a strong reason to keep financing, licensing and acquiring outside innovation.
The weakness sits much earlier in the company lifecycle. Seed and Series A funding has fallen, startup round count is unusually low and investors are heavily favoring companies that already have human data or late-stage programs.
Our judgment is fairly specific. Biotechnology is a growing market today, but it is a selective growth market. Revenue, capital, exits, acquisitions, licensing and drug output are moving strongly enough to make the answer yes. The broad startup ecosystem has not fully joined that growth yet.
If early-stage financing starts rising too, we would move from calling this a selective biotechnology expansion to calling it a full biotech boom. We are not there yet.
In our biotechnology market deck, we identify pain points entrepreneurs should prioritize
OUR METHODOLOGY
This analysis tests whether the biotechnology market is genuinely growing now by looking across commercial performance, public markets, financing, early-stage venture activity, IPOs, M&A, licensing, drug output, R&D activity and employment. We do not rely on a single market-size forecast because those forecasts often mix biotechnology with much broader pharmaceutical, healthcare or medical-device markets.
For this article, biotechnology mainly covers therapeutics, biologics, drug-development platforms and closely related technologies. We use 2025 and 2026 data wherever possible, with earlier periods used to show whether a movement is a real acceleration, a normalization or simply a rebound from an unusually weak base.
We keep contradictory evidence visible instead of averaging it away. Strong aggregate financing does not cancel out weak seed and Series A activity, and a rising biotech ETF does not by itself prove that the underlying industry is expanding. The conclusion comes from the combined direction of revenue, capital availability, exits, strategic buying, scientific output and company formation.
We also distinguish announced deal value from cash paid immediately. Licensing totals can include large milestone payments that may never be earned, so upfront consideration is treated as a cleaner measure of near-term capital movement where that information is available.
The final classification is qualitative rather than mechanical. We call the current environment a selective expansion because revenue, public valuations, total financing, IPO proceeds, M&A, licensing and drug launches are all strong enough to support growth, while early-stage startup formation and R&D productivity remain materially weaker.
Key sources used for this analysis include EY’s Biotech Beyond Borders work and its 2026 biotechnology report announcement for revenue and public-company fundamentals; State Street’s XBI data for public-market performance; BioWorld and BioCentury for financing and early-stage activity; and J.P. Morgan and DealForma for IPO, M&A and licensing data.
We also relied on IQVIA’s H1 2026 M&A update, IQVIA’s 2026 M&A outlook and IQVIA’s Global R&D Trends 2026 for patent-cliff exposure, clinical-pipeline ownership, drug launches and development productivity; the FDA’s 2026 novel-drug approvals list for current US approvals; Biohaven for the SK Biopharmaceuticals licensing agreement; and direct company disclosures from LifeMine, Epicrispr, Infinimmune and Hansoh Pharmaceutical. Workforce trends are based on Fierce Biotech and BioSpace.
This chart, featured in our biotechnology market deck, breaks down revenue across Europe, Asia, North America, Africa, and South America in the biotechnology market
Related blog posts
