Investor focus shifts to late-stage development in biotech, expert says

Core Insights - The biotech sector has experienced a challenging first half of 2025 but has rebounded strongly in the second half, particularly among profitable companies, driven by increased M&A activity [1] - A significant factor in this rebound is the impending patent cliff, which is expected to lead to a rise in biotech acquisitions in the coming months [2] - The number of listed biotech companies has decreased by 20% over the past 40 months, which is seen as a positive development that refocuses attention on companies with strong datasets [3] Investment Trends - There has been a notable shift in investor focus from preclinical assets during the pandemic to companies with clinical-stage data, as those with clinical assets are perceived to have higher enterprise value [4] - In Q3 2025, venture financing in the biotech industry reached a total deal value of $3.1 billion, an increase from $1.8 billion in the same period in 2024, indicating a strong year for capital raising despite a slow IPO market [3] Global Influences - Innovation from China is becoming increasingly significant, with one-fifth of drugs in development originating from the country, posing a competitive risk for local biotechs [5] - Policies like the BIOSECURE Act may affect international deal facilitation, highlighting the need for nuanced approaches to leverage Chinese innovation without hindering development [6] - A successful collaboration example includes Summit Therapeutics licensing Akeso's PD1–EGFR monoclonal antibody for $5 billion in 2022, which has led to Akeso reinvesting in R&D and conducting 50 ongoing clinical trials [7]