In the first quarter of 2025, the biotech sector witnessed a substantial decline in funding, with total investments plummeting to $6.5 billion, compared to $8.1 billion in the same period of the previous year. This data, compiled by the analytics firm GlobalData, also noted a 9% decrease in the number of venture capital deals, dropping to 162 from the prior year’s tally. Oncology emerged as the most funded therapeutic area, attracting 76 deals facilitated by 217 investors, underscoring the ongoing emphasis on cancer treatments despite the overall downturn.
GlobalData’s analysis indicates that the current financing environment remains challenging, echoing trends observed in 2022 and 2023. Venture capitalists are increasingly inclined towards later-stage companies, particularly those with demonstrated clinical data. According to Alison Labya, a senior analyst at GlobalData, “The higher deal values for late-stage firms underscore a distinct realignment of investor risk appetite—a trend observed since 2024.” Labya further elaborated that this pivot is largely influenced by persistent macroeconomic uncertainties. Investors appear more willing to support opportunities with clearer paths to revenue generation and market entry, rather than engaging with projects that present prolonged developmental risks.
Despite these challenges, the beginning of the second quarter in 2025 revealed significant financing rounds by firms in the late stages of product development. Newer companies, emerging from secrecy, also managed to capture the attention of venture capitalists, indicating a potential shift in investor sentiment. A notable instance in this trend is Granite Bio, which recently disclosed $100 million in financing. This round is broken down into a $30 million Series A led by founding investors Versant Ventures and the Novartis Venture Fund, followed by a $70 million Series B round led by Forbion and Sanofi Ventures. Granite Bio’s pipeline includes two novel antibodies, with GRT-001 currently undergoing Phase 1a testing in healthy volunteers. The company plans to initiate Phase 1b trials for GRT-001 in treating inflammatory bowel disease later this year.
Another noteworthy participant is Stately Bio, which secured $12 million for its artificial intelligence-based imaging platform designed to enhance the development of cell therapies and regenerative medicines. This startup, based in Palo Alto, California, boasts technology that permits real-time monitoring of living cells without harming them—contrasting sharply with contemporary cellular imaging technologies that compromise cellular integrity. Founded by Frank Li, a veteran of machine learning from Alphabet’s Calico Life Sciences, Stately intends to utilize the funds to expand its operational capabilities and develop an internal pipeline of therapies targeting currently undisclosed indications.
Moreover, Flagship Pioneering introduced Etiome, a startup focused on early disease intervention through supervised artificial intelligence applied to electronic health records. With a $50 million investment backing its efforts, Etiome aims to characterize “biostages” of various diseases, paving the way for the discovery of drugs targeting these initial stages.
Glycomine also captured investor interest, raising $115 million to advance GLM101, a candidate treatment for the ultra-rare phosphomannomutase 2-congenital disorder of glycosylation. Unlike traditional therapies, GLM101 takes a unique approach by substituting a necessary compound in the enzymatic process rather than merely providing a deficient enzyme.
The startup Avidicure secured $50 million to propel its antibody drugs, designed to engage both innate and adaptive immune responses against cancer. The primary candidate, AVC-S-101, is in development for conditions including non-small cell lung cancer. In a similar vein, Attovia Therapeutics raised $90 million, aiming to validate its innovative “attobodies” in clinical studies for chronic pruritus and atopic dermatitis.
Imbria Pharmaceuticals has also entered the spotlight, closing a $57.5 million funding round to advance ninerafaxstat, an oral small molecule inhibitor aimed at treating non-obstructive hypertrophic cardiomyopathy. This innovative approach seeks to redirect the heart’s metabolic preference from fatty acids towards glucose, which is expected to enhance cardiac function both at rest and during physical activity.
In a notable development, Merida Biosciences emerged with $121 million to support its antibody-like therapeutic pipeline, primarily targeting Graves’ disease. This initiative is spearheaded by Third Rock Ventures, which co-led the startup’s initial investment alongside Bain Capital Life Sciences.
RayThera, a new entrant in immunology-focused pharmaceuticals, raised $100 million to advance its small molecule pipeline towards Phase 1 testing. Meanwhile, Neurona Therapeutics successfully raised $102 million to propel its cell therapy, NRTX-1001, into Phase 3 trials for epilepsy, representing a significant advancement in stem cell technology aimed at seizure control.
Solu Therapeutics also attracted attention with its $41 million funds for projects combining antibodies and small molecules to target elusive medical conditions. Its primary candidate, STX-0712, is currently in Phase 1 trials for various blood cancers.
On another front, HepaRegeniX completed a funding round totaling €21.5 million (approximately $24.3 million) to push forward with its lead candidate, HRX-215, which seeks to enhance liver regeneration processes. This small molecule therapy targets MKK4, a key regulatory enzyme involved in liver health.
Lastly, Atsena Therapeutics raised $150 million in support of its gene therapy, ATSN-201, which is being evaluated in clinical trials for X-linked retinoschisis, a genetic vision disorder. The Series C financing round was attracted primarily by Bain Capital, underlining the ongoing investor interest in innovative biotech solutions.
The current state of biotech financing highlights a compelling juxtaposition of challenges and opportunities. Amidst macroeconomic uncertainties, the sector’s ability to innovate and attract capital remains crucial. While the first quarter may have shown a decline in investments overall, the emergence of new companies and significant funding rounds in the following weeks suggests potential resilience and adaptability within the industry. As the second quarter unfolds, the ongoing dynamics of investment strategies and market priorities will likely shape the future landscape of biotech financing and research initiatives.