The biotechnology sector is experiencing significant merger and acquisition (M&A) activity, with over $38 billion paid for venture-backed companies in the past two years, according to Crunchbase data. While not competing with the massive valuations seen in the artificial intelligence (AI) space, biotech is still generating notable exits, providing solid outcomes by historical standards.
2025 has started robustly, highlighted by Eli Lilly‘s recent agreement to acquire Orna Therapeutics, a company focused on engineering immune cells in vivo, for up to $2.4 billion. This acquisition is part of a broader trend where large pharmaceutical companies are increasingly looking to bolster their portfolios through strategic purchases.
Major Acquisitions and Market Dynamics
The last two years have seen at least nine U.S. biotech companies sell for over $1 billion, including potential milestone payments. The largest transaction recorded was Johnson & Johnson‘s acquisition of Halda Therapeutics for $3.05 billion, completed late last year. This deal reflects J&J’s strategic interest in Halda’s clinical-stage oral therapy for prostate cancer.
Another notable acquisition was AbbVie‘s agreement to acquire Capstan Therapeutics in mid-2025 for up to $2.1 billion. Capstan, based in San Diego, specializes in developing targeted in vivo RNA technologies with a focus on autoimmune diseases. This acquisition follows Capstan’s successful fundraising, which saw it secure $340 million in venture funding.
Despite these significant deals, the overall funding environment for biotech appears subdued. In 2024, less than 9% of all U.S. startup funding was directed towards biotech, marking the lowest share in years. This trend is largely attributed to the influx of capital into other sectors, particularly generative AI, which has captured investor interest.
Funding Trends and Future Outlook
While acquisition activity remains strong, the landscape for initial public offerings (IPOs) in the biotech sector is less vibrant. In 2024, only 21 biotech, pharmaceutical, or medical device companies went public, the lowest number in years. So far in 2025, the market has seen just four IPOs, including the recent debut of Eikon Therapeutics, a cancer therapy developer valued at approximately $900 million.
The current state of the biotech sector suggests a period of stability rather than rapid growth or decline. The data indicates that while there are significant acquisitions taking place, overall funding and exit activities are not booming. Instead, the sector appears to be in a viable position for sustained performance over the longer term, which may not be thrilling but remains solid.
According to Crunchbase, the majority of acquisitions involve disclosed purchase prices, including total upfront and milestone payments. As the biotech sector continues to evolve, companies and investors alike will be watching closely to see how these trends develop in the coming months.
