Venture capital investment in the biopharma sector increased in 2025, with $33.8 billion allocated across 1,171 deals, according to a recent analysis by PitchBook. This represents an increase from the previous year’s $31.9 billion and 1,091 deals, though both figures remain significantly lower than the industry peak in 2021 when $55.7 billion was invested in just 1,039 companies.
PitchBook’s report noted that while overall deal value rose, the focus of investments shifted toward late-stage companies. Early-stage biotech startups received only 32% of venture capital funding in 2025, down from more than 40% during the pandemic years between 2020 and 2022. According to PitchBook, this indicates “a meaningful reduction in the number of new company formations and first financings.”
The firm emphasized that early-stage venture capital needs to recover to ensure the long-term health of the biotech ecosystem and support innovation pipelines. The median deal value for biopharma VC transactions increased to $26.6 million in 2025 from $19.9 million in 2024.
“Together, these trends point to a fundamental change in how investors underwrite early-stage risk,” PitchBook wrote. “Where early rounds once funded preclinical programs focused on initial scientific validation, early-stage activity now includes consolidated mega-rounds backing clinically mature assets and experienced leadership teams.”
Investors have shown particular interest in asset-centric companies centered around late-stage projects or differentiated platforms addressing specific biological or technical challenges. Notable large deals included Kailera Therapeutics’ $600 million Series B round following a $400 million Series A at the end of 2024; Kailera is developing an obesity treatment already in Phase 3 trials.
PitchBook also highlighted that U.S.-based biotechs are contending with reduced public funding due to changing government research priorities. This has created opportunities for Chinese firms to play a larger role in biopharma innovation; several new U.S.-based companies licensed assets from Chinese organizations during 2025.
On exits, there were fewer transactions but higher total exit value: VC-backed exits totaled $35.5 billion across 79 deals in 2025 compared with $33.3 billion across 98 exits the previous year.
“As with VC deals, exits increasingly skewed toward fewer but larger transactions, reinforcing the broader theme of selectivity across the biopharma venture ecosystem,” PitchBook wrote.
Looking ahead, PitchBook expects these trends—fewer but larger investments and exits—to continue into what it describes as “a continued, albeit disciplined, recovery in 2026.”
