Money Is Flowing Into Biopharma But Funders Are Investing Selectively

Sharply dropping stock prices and reduced investor interest in higher-risk sectors like the biopharmaceutical industry since 2021 have led to an increasingly difficult environment for drug developers looking to raise money, whether they are private, looking to go public or already trading publicly. Companies have adjusted by cutting costs to make cash on hand last longer and investors have shifted their focus to later-stage biopharma firms that they perceive as less risky opportunities.

While the world will always need new therapeutics to treat unmet medical needs, the industry still feels the impact of macroeconomic conditions, such as rising inflation and higher interest rates,...