Emerging companies in biotechnology see VC financing dries under Trump star-news.press/wp

The startups in biotechnology have faced a difficult financial environment for several years. But the sharp changes of the Trump administration in the health and federal science policies made the search for financing worse.

Collection of donations by investment capital companies that focus on biotechnology on a declining path since 2018, when it reached a peak at 152.3 billion dollars. By last year, the total capital committed to biotechnology was only $ 12 billion, according to another Pitchbook report. Only 30 companies were deployed in the field of biotechnology last year, a decrease on average 54 in the year 2010 to 2020.

This year can end worse. In June, investment bank analysts said that the financing of American biotechnology in May decreased by 57 %, to $ 2.7 billion, compared to the same month last year. April was more amazing, as $ 2.6 billion was raised, which is the lowest amount in three years and 44 % less than the previous average of 12 months.

Throughout the world, the project financing for the vital harm sector decreased to $ 6.5 billion in the first quarter of 2025, compared to $ 8.1 billion in the previous year, according to what it said. Globaldata.

In a note of clients, Jefferies analysts wrote that “current policy proposals and the lowering of the agency’s employees have made a cloud for investment in biotechnology.” Companies in the sector and their investors, “want clarity regarding the regulation of the FDA, drug pricing, and financing.” Consequently, they concluded that “the current environment does not lead to the investment of biotechnology at the present time.”

Trump administration policies have created a wide range of challenges facing biotechnology, especially those startups that have not yet brought a product to the market. Biotechnology medications are created from human protein, and large molecules are usually targeting a relatively small number of patients.

The commercial development of these drugs takes 10 years or more at a very high cost, and reflects its high prices. It took nearly 16 years and an estimated $ 750 million to $ 1.2 billion to develop Spinraza in Biogen, which was approved in 2016 as the first treatment for spinal muscular dystrophy, a rare genetic disorder that causes muscle waste. The first year of treatment holds a list of $ 750,000 and $ 375,000 per year.

But before commercial development, biotechnology drugs usually arise from basic research for the national health grants funding (NIH) that can take decades of investigation without any guarantee of success-the form of research that few companies can do. It was a research filled with the National Institutes of Health that first defined the cellular goal that led to the keytruda of Merck, a cancer drug that has been approved for more than 24 different indicators since 2014, which turns tumor therapy.

Industry observers say that the National Institutes of Health may not be able to withstand the costs of such research to move forward. In the first four months of this year, the Trump administration or freezing about $ 2.4 billion was canceled of granting and development from the National Institutes of Health and spent more than 1,200 jobs. In the 2026 budget proposal, currently suspended in Congress, the White House is seeking a 40 % reduction in the budget of the National Institutes of Health, and wants to strengthen the 19 -to -eight National Health Institutes and Centers.

The Trump administration has also canceled 3,500 jobs in the Food and Drug Administration, which the executives of the industry fear are certain that the drug approvals are.

In addition to these changes, investors are concerned about the proposed definitions of medicines and the possibility of lower prices of drugs in biotechnology, both of which pump more uncertainty in the sector. Trump announced in May that he would put what he calls The most preferred country policyIt aims to raise the prices of medicines to the same important level in other countries, including biotechnology medications. The details have not yet been released.

Biotechnology companies and their investors knew early in March that they might face a problem in Washington when the news broke out The forced resignation of Peter MarxThe widespread director of the Food and Drug Administration Center for Biology Evaluation and Research, which oversees the approvals of medicines in the field of biotechnology. Marx, who has presided over the partition over the past nine years, has been a strong supporter of vaccines, the accelerating approval of innovative drugs, and the organizational flexibility of genetic treatments. Biotechnology stocks On the news of Marx’s resignation.

In the notes of Marx’s sudden resignation, Ivan Sigital, an investor that Marx’s resignation is “large negative” for the biotechnology industry because it pumps a “new wave of uncertainty in food and drug management” and can indicate changes in the drug management approach to drug approvals ..

Late last month, 110 executives, presidents and heads of biotechnology and pharmaceutical companies were published Open message To Congress, saying that “the harmful cuts in financing research provided to academic and unionist scholars will immediately harm the biotechnology sector.”

The letter said that the proposed reduction in funding federal research “will have a catastrophic impact on the progress of biomedical and biotechnology capabilities in the United States.” They have written that federal funding for scientific research is required if the United States wants to continue leading the world in scientific innovation, knowledge and health.

Their concerns were reflected in a Conversation Among the executives of biotechnology in the early stage by custody, a non -profit organization formed by VC Sciences. The poll revealed that 92 % of CEOs are concerned that investors are moving from the biological drug sector to low -risk industries, while 93 % believe that reducing government funding for basic research will exacerbate the results of their companies.

John Stanford, Executive Director of Encubate, said in the report.