Executives, investors stick to basics at BIO 2025

Boston—One year ago, biopharmaceutical executives and investors at the BIO International Convention were abuzz with talk of a return to the glory days when companies were regularly acquired for billions of dollars a pop.

This week, attendees at the conference—sponsored by the Biotechnology Innovation Organization—struck a markedly different tone. Few spoke of mergers and acquisitions, nor did they try to spin the multiyear biotech market downturn into a positive.

If executives were looking to make deals at BIO 2025, those transactions were largely limited to licensing agreements. If they were looking to raise funds, they openly acknowledged the difficulty of getting venture capital these days. In some ways it's refreshing, says Treehill Partners CEO Ali Pashazadeh.

“The nice thing is if the market is tougher, people just cut the shit,” Pashazadeh says. “They just get to the point. Is there a deal here? Is this what we want to do? Let's stop dancing.”

One company looking to find partnerships was BridGene Biosciences, a chemoproteomics drug discovery firm that uses covalent small molecules to screen target proteins for binding pockets. BridGene has discovery collaborations with Takeda Pharmaceutical and Galapagos NV. Executive vice president Irene Yuan tells C&EN that she’s on the hunt for more similarly structured partnerships, as well as licensing deals in which BridGene would sell the rights to a drug candidate to a pharmaceutical firm.

“I have a lot of meetings scheduled to talk about both our platform collaboration and our asset licensing opportunities,” Yuan says.

Thibaud Portal, the cofounder, chief operating officer, and acting CEO of small interfering RNA (siRNA) drug developer Alys Pharmaceuticals, calls the BIO meetings “speed dating.” Like Yuan, he says he is open to different types of partnerships. Alys has multiple drug candidates in clinical trials for skin disorders; the most advanced, for a type of alopecia, is in Phase 2, and data readouts from Phase 1 trials of treatments for eczema and hives are expected in the next year. The priority is to get those molecules to those inflection points, Portal says.

“There are very creative types of transactions that are being contemplated, so there are multiple scenarios that could unfold,” Portal says. “We could contemplate an equity investment in the company. Since we have multiple assets, you could actually agree to an equity investment with specific rights to one or the other of the assets, and that would provide fuel for the entire pipeline. It could also be a single-asset, can’t-refuse transaction, of course.”

Increasingly unusual financial agreements are becoming the norm as it grows harder to raise money in traditional ways.

Initial public offerings (IPOs) remain well below the 10-year average, and few companies are queuing up to go public, according to the latest EY Biotech Beyond Borders Report. M&A values were way down in 2024, to $77 billion—about half the $153.5 billion in 2023, according to the report. Meanwhile, venture capital continues to follow a haves-and-have-nots pattern, with larger raises going to fewer companies.

But start-up executives are clear sighted about these struggles. For Oury Chetboun, CEO of the French early-stage cancer drug developer Seekyo Therapeutics, BIO is a fundraising opportunity. He is trying to raise about €14 million ($16 million) to avoid falling into the “valley of death”: the time between a biotech running short of money and reaching a major milestone, like a data readout.

“It’s not only a tricky time because of the money itself; it’s also a tricky time because investors tend to meet less with new projects, meaning that they have to secure their own existing line of investments,” Chetboun says. “Even at the Bio€quity meeting, which took place about 2 months ago in Europe, this was already the tendency. And I find that this is even truer here at BIO. There's some nice deals, some massive ones, but fewer.”

Federal changes color conversations

BIO is an international conference, but recent changes to US health agencies were top of mind for many executives.

In a speech on the convention's main stage Tuesday morning, outgoing BIO board chair and former longtime Global Blood Therapeutics CEO Ted Love stressed the importance of a functioning National Institutes of Health (NIH) and US Food and Drug Administration to many of BIO's 20,000-plus attendees. He also decried drug-pricing policies, including President Donald J. Trump's most-favored-nation rule and facets of the Inflation Reduction Act, as well as tariffs.

“We must prioritize investing in research, our workforce, and organizations and companies that drive innovation,” Love said.

Political appointees were listening. FDA commissioner Marty Makary, principal deputy commissioner Sara Brenner, and Center for Biologics Evaluation and Research director Vinay Prasad hosted their Boston stop of their six-city CEO Forum listening tour at the conference. About 120 executives attended. (The forum was closed to members of the press, but sources tell C&EN that Makary seemed engaged and responsive to executives’ concerns.)

Makary also joined BIO CEO John Crowley onstage for a fireside chat Tuesday afternoon. Makary told the audience he wanted to make the FDA a collaborative, transparent agency. “Some of the themes we have heard is that we at the FDA can do a better job of communicating with sponsors,” he said. “Nobody benefits from a lack of clarity.”

Makary also downplayed the impact of layoffs and funding cuts at the FDA. He said he had reinstated people and was currently hiring scientific reviewers, that “morale is good and improving,” and that the FDA is currently “on track” to meet deadlines on drug approval decisions. Some in the industry would appear to disagree with that last assertion: KalVista Pharmaceuticals said in a statement last Friday, days before BIO commenced, that the FDA had notified the company it would miss a decision deadline by up to 4 weeks “due to heavy workload and limited resources.”

Meanwhile, cuts to grants from US federal agencies including the NIH and the National Science Foundation are beginning to have ripple effects in the private sector. George Badescu, chief business officer of German antibody-drug conjugate developer Heidelberg Pharma, says that funding cuts have affected all of his company's academic collaborators.

“There is a lot of uncertainty, and it’s very difficult to plan things long term. This is really very heartbreaking to see,” Badescu says. “What's happening right now is going to have very long-term effects, because it's going to reduce the amount of innovation available for the industry. What the industry does very well is take the early science and develop it into a therapeutic, into a drug, into something that can be applied, but the source of it is still in the academic collaborations.”

Karen Harris, Alzheimer's Drug Discovery Foundation chief financial officer and head of mission-related investing, has spoken to multiple researchers whose funding has been cut. The changes have compounded the biopharmaceutical industry's existing struggles, she says: “The market has been very difficult, even before the NIH funding [cuts].”

At Eli Lilly and Company, Julie Gilmore is contemplating ways to plug the gaps for early-stage funding. Gilmore serves as vice president and global head of Lilly Gateway Labs, the pharmaceutical giant's incubator program.

Lilly Gateway Labs has historically served as a waypoint for start-ups that have outgrown small, often shared laboratories but aren’t yet ready—or sufficiently financially solvent—to lease a whole lab of their own. The first Gateway opened in the San Francisco Bay Area in 2019 and has since expanded to five facilities, most recently in Beijing.

Gilmore says she has started to field more calls from academics who are looking for ways to continue work that would have otherwise been funded by government grants. “We're kind of tweaking our models” in response, she says.

“We’ve always been supportive and engaged with academics, but especially in this landscape, we are hearing from them, and we are trying to think about, how does a company like Lilly better address that need? It’s a growing need,” Gilmore says. “At the end of the day, none of us want to see these great ideas not move forward. That’s how we’re looking at it. Innovation, wherever it is—if it’s sitting in a biotech company, if it’s at a university, if it’s with an investigator—how do we ensure that it has a chance to see the light of day?”