Foreword
In a year marked by persistent uncertainty and cautious optimism, the second quarter of 2025 offered a revealing snapshot of the biopharma sector’s resilience and adaptability. While the industry continues to navigate macroeconomic headwinds, regulatory shifts, and evolving investor sentiment, Evaluate’s latest data shows that innovation and strategic dealmaking remain very much alive.
This is still a market in flux. Across M&A, IPOs, venture funding, and regional performance, a clear theme emerges: companies are recalibrating their strategies, not retreating from ambition. M&A activity is steady in volume but shows signs of renewed confidence through a rise in billion-dollar upfront deals. Sanofi’s acquisition of Blueprint Medicines and Merck KGaA’s SpringWorks buyout are two examples of how big pharma is selectively placing bolder bets to strengthen pipelines. Although there’s no sign of a return to mega-deals, we are at least back to measuring deals in the billions.
In contrast, the IPO landscape continues to tell a more sobering story. With only two small offerings in Q2, the public markets remain largely closed to new entrants. At the BIO International convention in June, there was little expectation from panelists that IPOs would make a significant comeback in 2025. Yet, there are glimmers of hope, particularly in Asia, where investor appetite is beginning to stir. Companies that stay focused and ready may be well positioned when it reopens.
Venture funding also reflects a market in transition. Mega-rounds have faltered, and overall VC investment has declined sharply year-over-year. Still, smaller financings are holding steady, and standout rounds, like Pathos AI’s $365m raise, highlight where investor conviction remains strong.
Perhaps most striking is the growing influence of China’s biopharma sector. From small-cap stars like Harbour BioMed to mid-cap leaders such as 3SBio, Chinese companies are not only attracting global attention but reshaping the competitive landscape through high-quality R&D and strategic partnerships with big pharma.
For the past few years, the pharma industry has wanted a return to stability and a stronger, more fluid investment ecosystem. While many of the pieces are there, they’re not yet in place and as many companies have learned the hard way – you can’t always get what you want.
