The biopharma capital markets played through a volatile, but ultimately constructive, set this year. “Recovery” was 2025’s defining track as the sector worked through post–“Liberation Day” macro uncertainty alongside FDA leadership upheaval and persistent drug-pricing headline risk. Despite the background noise, biopharma ended the year on a high note: the XBI rose over 35%, its best performance since 2020, capped by six consecutive months of outperformance. The rally was supported by a combination of accelerating M&A activity, multiple interest rate cuts, and easing concerns around most-favored-nation policy and broader pricing pressure.
December was the breakout month, delivering record secondary issuance across follow-ons, PIPEs, and registered directs—as well as the largest single day and week for biotech secondary financings in five years. IPO volumes remained subdued and crossover participation declined, but strategic activity more than filled the gap. M&A dominated the year-end playlist, with 32 transactions exceeding $1 billion, the highest total in two decades, recycling meaningful capital into the ecosystem and reinforcing large-cap pharma’s appetite for external innovation.
As we queue up 2026, the William Blair biopharma team recaps the year’s key financing and strategic transactions and outlines why improving market conditions and strengthening fundamentals position the sector for continued momentum.
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