U.S. biopharma entered the third quarter with meaningful momentum, though the market became more selective as the quarter progressed. The XBI reached a five-year high of approximately $170 in August before selling off into quarter-end to close at approximately $158. Performance below the index level was uneven, with clinical-stage and small- and mid-cap companies lagging larger-cap and commercial-stage peers. The Federal Reserve raised rates by 25 basis points in September, with the market pricing at least one additional increase by year-end, reinforcing a more cautious tone.
The new issue window stayed open. Nine IPOs raised $2.7 billion, with seven pricing at the high end or above the range, eight upsized shares offered from launch and seven trading above issue at quarter-end. Reverse merger activity also picked up materially, with 12 transactions raising $1.9 billion in concurrent PIPEs during the third quarter. Secondary and private issuance moderated, with 26 follow-on and registered direct offerings raising $5.9 billion and 58 private financings raising $5 billion. Crossover activity continued with 11 potential financings raising $1.7 billion.
M&A remained an important source of liquidity, moderating from a record second quarter, with $39 billion of announced total deal value across 15 transactions. Year-to-date activity has already reached 40 transactions greater than $1 billion, surpassing the prior full-year record with a quarter remaining, while third-quarter public-company acquisitions returned an estimated $17 billion of capital to institutional shareholders. Partnering eased from the second quarter but stayed meaningful, with large pharma continuing to source external innovation across both clinical-stage assets and earlier-stage platforms.
In our Q3 2026 U.S. Biopharma Recap, the William Blair biopharma team reviews the quarter’s public and private financing activity, M&A and partnering trends, and the clinical and market developments shaping the sector heading into year-end.
Complete the form below to download a copy of the report.