Biotech company founders are experiencing increasing pressure amid a slow recovery in the sector, according to several industry leaders on May 6. Founders say that investor interest has shifted away from biotech and toward artificial intelligence, making it harder to secure funding.
This trend matters because it affects how new medicines reach the market and influences the future of innovation in life sciences. Many early-stage companies now struggle to attract investment as capital becomes more limited.
Ryan Watts, CEO of Denali Therapeutics, said, “There were the glory days of 2019, 2020 and maybe into 2021, where biotech was solving all of the world’s problems.” He added that high interest rates have made it more difficult for companies to raise money. Evita Weagel, CEO and cofounder of Eris Biotech, described the current climate: “You’re really fighting the whole environment.”
A recent report from PitchBook shows that capital is now flowing more toward late-stage companies ready for an initial public offering or sale rather than new startups. Carmen Kivisild, founder of Elnora—a company developing an AI agent for lab protocols—said investors are chasing hype around AI instead of taking risks on traditional biotech projects. Government funding has also declined due to shifting health policy priorities.
Despite these obstacles, some founders have found alternative sources of support. Weagel reported receiving investment from a baseball team owner who also provided other resources: “They want to use their money to really help humanity,” she said. Kivisild received her first major check after sending a cold email and credits bold outreach for helping her move her startup from Estonia to Utah’s growing biotech community.
Ben Lopez, an investor attending an Altitude Lab event in Salt Lake City last month, said success at this stage depends heavily on leadership: “You’ve got to focus on the entrepreneur.” Both Lopez and Weagel agreed that demonstrating progress with each meeting can help win over investors despite slow scientific timelines.
Looking ahead, Watts offered encouragement based on his experience navigating market cycles: “It is really challenging right now but it will cycle again,” he said. "But it only cycles if promise is seen."
