U.S. biopharma reached midyear against an improved backdrop. The XBI hit a five-year high, which is now within 10% of its February 2021 all-time closing high, and closed the second quarter up 23.9% as public issuance, private capital, and M&A remained active despite a choppy macro landscape. The recovery was selective, not broad-based indiscriminate risk-taking: investors continued to favor scaled, later-stage, clinically validated stories with clear catalysts.
The second quarter also marked a more credible reopening of the financing market. Seven IPOs raised approximately $3.3 billion, the strongest quarter since Q3 2021, while reverse mergers re-emerged as an attractive route to the public markets, with nine mergers raising approximately $1.6 billion in concurrent PIPEs. Secondaries remained active as well, with 64 pricings raising roughly $14.2 billion, and private financings stayed selective but sizable, with 68 rounds raising $8.0 billion.
M&A continued at a robust pace through the second quarter, with approximately $78 billion of announced total deal value across 27 transactions, including 20 deals greater than $1 billion. Scaled specialty and midcap acquirers joined large pharma as active buyers for de-risked commercial and late-stage assets, while partnering remained robust, with Asia-based licensors increasingly serving as a major source of innovation and pipeline access for global pharma.
Investor sentiment is constructive, but disciplined. William Blair’s midyear survey showed most respondents are somewhat constructive on biopharma equities over the next 12 months, with nearly half expecting the XBI to finish 2026 above $150. Interest rates and macro uncertainty remain the primary headwinds, reinforcing continued investor selectivity even as capital markets and strategic activity remain open.
In our Q2 2026 U.S. Biopharma Recap, the William Blair biopharma team reviews the quarter’s financing, strategic activity, and investor sentiment trends shaping the sector for the remainder of the year.
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