Biopharma venture funding dropped 20% in the first quarter of 2025 compared to the same period the year before, according to GlobalData.
Worldwide venture financing for the sector experienced a downturn from $8.1 billion in the first quarter of 2024 to $6.5 billion in 2025’s most recent quarter, GlobalData said in an April 30 release.
In terms of volume, VC declined 9% to 162 investments in the first quarter. Meanwhile, biopharmas in phase 3 development had the highest median deal value at $62.5 million, according to the data and analytics company.
The figures mirror similar downturns in 2022 and 2023, with investors continuing to favor later-stage companies with clinical data to show.
“The higher deal values for late-stage firms underscores a distinct realignment of investor risk appetite—a trend observed since 2024,” Alison Labya, business fundamentals pharma analyst for GlobalData, said in the release. “Amid the ongoing macroeconomic uncertainty, venture capitalists are favoring opportunities with clearer routes to near-term revenue and market access over longer-horizon development risks.”
Over the last five years, the sector has undergone three distinct phases. The first was an unprecedented capital influx starting in 2020 and related to the COVID-19 pandemic, followed by a market rationalization or post-COVID correction period.
Many had hoped that 2025 would bring more normalization to the sector, but those hopes have slipped amid the current market volatility tied to U.S. President Donald Trump's import tariffs.