Of 150 C-suite executives from pharmaceutical, biotechnology, and other life sciences companies surveyed by the Deloitte Center for Health Solutions across the U.S., Europe, and Asia, 75% said they believe 2025 will indeed be a happy new year for their companies and the broader industry. They based that optimism on a combination of factors that include expectations for strong growth (68% anticipated revenue increases) and the pace of science and technology innovation.
Those conditions can be expected to revive both the number and value of life sciences merger and acquisition (M&A) deals following a down year in 2024, according to analysis by PwC. That activity should be visible across biotech, pharmaceutical, and medtech (a category that includes diagnostics as well as health information systems and medical devices), according to the firm.
Some of these predictions are among the seven biopharma-related trends that GEN has uncovered in its interviews with experts and other industry stakeholders, and in its reviews of reports and public statements. These trends are detailed below:
AI: Growth beyond discovery algorithms
Having ensconced itself in drug discovery and development, artificial intelligence (AI) is poised for even further growth. Nearly 60% of biopharma executives surveyed by Deloitte said they plan to increase generative AI investments across their value chains.
“We are moving from the experimentation and hype stage to the ‘How am I using it to improve my business?’ stage. That shift happened over the course of this year, and I think we’ll see it even more next year,” Pete Lyons, a vice chair with Deloitte and the firm’s U.S. Life Sciences Sector Leader, told GEN Edge.
Executives plan to expand AI use beyond drug discovery algorithms, to greater use of gen AI at scale across business operations, Lyons said: “I think it will change jobs, not necessarily cost jobs. And this isn’t the first technology that we’ve seen over the last many decades that has come through to make folks more efficient.
More AI in biopharma is expected to spur more growth for leading AI-based drug developers. Recursion combined with Exscientia for a reported $688 million in November, nine months after firing its founder, CEO, and principal executive officer Andrew Hopkins, PhD, for what its board termed “inappropriate” relationships with two employees. Insilico Medicine published peer-reviewed details of its inflammatory bowel disease program and has grown its pipeline to 31 programs, 10 of them progressing to clinical phases—led by ISM001-055, an idiopathic pulmonary fibrosis candidate the company plans to advance into a potentially pivotal trial.
While some drug developers will continue building out their own AI platforms, others will simply partner with other companies: “people have largely migrated to in-licensing to get those AI technologies, as promising as they may be, deployed in their own internal development programs,” Roel Van den Akker, a partner with PwC US and the firm’s Pharmaceutical and & Life Science Deals Leader, told GEN Edge.
A growing presence in biopharma AI helped propel Silicon Valley-based microprocessing giant Nvidia to a market capitalization—the product of the share price and the number of outstanding shares—surpassing $3 trillion in 2024, and a 10-for-1 stock split that took effect in June. Heading into 2025, those new Nvidia shares have all but plateaued, finishing December down 0.55%.
Yet at least one Wall Street watcher predicted December 28 that the company’s stock “could double in 2025” based on expectations of solid demand for its next-generation NVIDIA Blackwell graphics processing unit (GPU) architecture, announced last March, and Taiwanese media reports that Nvidia is one of four global tech giants for which Taiwan Semiconductor Manufacturing (TSMC) plans to ramp up production of 4 nm wafers at its $12 billion semiconductor fabrication plant in Phoenix, set to begin phased operations this year.
CANCER VACCINES: Gathering late-stage data
The quest to develop a cancer vaccine will see continued late-stage data gathering in 2025. Among leading developers, Moderna and Merck in October launched their third Phase III trial (NCT06623422) for their individualized neoantigen therapy (INT) that Moderna calls mRNA-4157 and Merck, V940. INTerpath-009 is evaluating the combination of adjuvant INT plus Merck’s Keytruda® (pembrolizumab) for some types of non-small cell lung cancer (NSCLC) following Keytruda and chemotherapy.
“We do continue to discuss with our partner, Merck additional Phase III programs. We will start new ones in the coming year that we haven’t yet announced,” Moderna’s President Stephen Hoge told analysts November 7 on the company’s quarterly earnings call.
Moderna and Merck are using Personalis’ ImmunoID NeXT® comprehensive tumor tissue profiling platform. Last month, Personalis said Moderna will continue using ImmunoID NeXT through a multi-year extension of undisclosed value—while Merck agreed to buy $50 million of Personalis stock in a private placement at the December 18 closing price of $3.56 per share. The deal gave Merck a roughly 16.5% ownership stake in Personalis (14+ million shares).
BioNTech plans to report data this year from a Phase II trial (BNT111-01; NCT04526899) of BNT111 plus Regeneron Pharmaceuticals’ marketed drug Libtayo® (cemiplimab-rwlc) in patients with anti-PD-(L)1 refractory/relapsed, unresectable stage III or IV melanoma. BioNTech is partnering with Regeneron to conduct the trial. BNT111 is based on BioNTech’s wholly owned, off-the-shelf FixVac platform, and encodes shared melanoma associated antigens.
Later this year or in 2026, BioNTech plans to disclose interim data from its Phase II trial (NCT04486378) of autogene cevumeran (BNT122/RO7198457) in stage II high-risk and III circulating tumor DNA+ (ctDNA) adjuvant CRC. BioNTech is developing autogene cevumeran in collaboration with Genentech, a Member of the Roche Group. BioNTech also has a third cancer vaccine under development—BNT113, which is also FixVac-based but encodes Human Papilloma Virus 16 (HPV16) antigens.
While BioNTech and Moderna-Merck have shown success in adjuvant settings, OSE Immunotherapeutics has also reported positive results for its T-cell epitope (neoepitope)-based cancer vaccine Tedopi® (OSE2101), an off-the-shelf immunotherapy targeting five tumor-associated antigens.
During the first half of 2025, OSE expects to complete full activation of sites for its global randomized Phase III ARTEMIA registrational trial (NCT06472245) assessing Tedopi. Launched in September, ARTEMIA will compare the efficacy and safety of second-line treatment with Tedopi vs. standard of care (docetaxel) in HLA-A2 positive patients with metastatic NSCLC with secondary resistance to immune checkpoint inhibitor. The primary endpoint is overall survival.
“For cancer vaccines, there were decades of failure, but now we have seen new really intriguing data from Moderna and BioNTech in non-randomized trials, really promising. Others have generated really interesting data. And we are generating survival data in our randomized trial,” Poirier said.
“We need more and more data, more success to create confidence in this technology,” he added. “And I’m sure in the end, all of these different technologies will find their place in the therapeutic arsenal for the needs of patients.”
FINANCE: VC deals, IPOs bouncing back
Biopharma startups are likelier to see larger venture capital (VC) financings and more of them in 2025 if encouraging figures seen in the third quarter of 2024 continue their positive direction.
While full-year 2024 figures were not yet available at deadline, third quarter numbers released by J.P. Morgan based on data from DealForma showed $20.8 billion in 319 VC financings during the first three quarters of the year just ended, trending toward an estimated $27.7 billion in 425 financings for the full year.
If full-year numbers meet or surpass that estimate, it would reverse two straight years of declines in financing dollars, though not in the number of financings, as larger investments have gone to fewer companies. The VC market has fallen from post-COVID highs of $44 billion in 756 deals in 2021, skidding to $27.9 billion in 543 deals the following year, then further tumbling to $23.5 billion in 464 deals in 2023.
For 2024, however, JPM and DealForma cited “sustained bullish signals” that included the 0.5% cut in the prime interest rate by the Federal Reserve in September: “Rates have correlated with deal activity in the past, so we may see biopharma deal and funding activity increase through Q4 2024.”
Xaira Therapeutics enjoyed 2024’s largest VC financing, launching with more than $1 billion in a round led by ARCH Venture Partners and Foresite Capital. Xaira was one of 77 biopharmas that raised venture rounds of $100 million or more through Q3 2024, already surpassing the 73 such rounds in all of 2023.
The initial public offering (IPO) market is expected to bounce back further during 2025 after showing signs of recovery over the past year. Biopharma IPOs peaked in 2021 as the scramble to develop COVID-19 drugs and vaccines sparked investor interest in developers of treatments and jabs in a variety of other therapeutic areas.
“It will not go back to 2021 levels, but it will definitely bounce back from what we saw in ’24,” PwC’s Van den Akker predicted. “There’s a lot of companies in the green room based on confidential filings, and there’s a little bit of timing aspect to IPOs that’s very impactful.”
Sixteen companies went public on U.S. exchanges during January-September 2024, raising a combined $3 billion—already surpassing the $2.7 billion raised by 13 IPOs in all of 2023. The largest biopharma IPOs of 2024 was the $437 million gross IPO of cancer drug developer CG Oncology, which began with an initial $380 million offering, followed by the $410.7 million gross IPO of AI-based precision medicine company Tempus, which generated $382 million in net proceeds.
GENE EDITING: Revenue, reform, and history
2024 saw Vertex Pharmaceuticals generate its first commercial revenue from the first patient dosed with the first FDA-approved CRISPR therapy, Casgevy® (“exa-cel” or exagamglogene autotemcel), which it co-developed with CRISPR Therapeutics—$2 million during the third quarter, included within the $2.772 billion in product revenue that Vertex reported for Q3.
Far more in revenue could be potentially generated from CRISPR therapies—and far more such treatments could reach the patients who need them, Fyodor Urnov, PhD, director, technology & translation at the Innovative Genomics Institute and professor of molecular and cell biology at University of California, Berkeley, asserted in a 6,000-word guest editorial in the October 2024 issue of The CRISPR Journal (a sister journal of GEN, published by Mary Ann Liebert, Inc.)
Urnov urged drug developers to move beyond clinical programs that study just a single mutation in a given disease gene, and called for regulators to reform their reviews so that multiple guide RNAs could be considered within a single Investigational New Drug (IND) application, and for academic and industry researchers to create “CRISPR Cures Centers” where academic and industry researchers partnered on therapy design, manufacturing, animal studies, and clinical care through tertiary hospitals.
“In the name of all the patients currently living with clinically editable genetic disease, and those who will be born to live with it—we have to give Cas a chance,” Urnov wrote. “The time for the reform advocated for the above is now.”
Gene editing technologies beyond CRISPR also advanced during 2024 and stand poised to progress further. During 2025, Prime Medicine expects to report initial clinical data from the first human trial of a prime editing therapy, a Phase I/II study (NCT06559176) of PM359, an ex vivo autologous hematopoietic stem cell (HSC) product designed to treat chronic granulomatous disease (CGD) patients with a mutation in p47phox. Prime gained FDA clearance for the first human trials of a prime editing therapy last April.
Also in the new year, Wave Life Sciences anticipates sharing multi-dose data from its Phase Ib/IIa RestorAATion-2 trial (NCT06405633) assessing its alpha-1 antitrypsin deficiency (AATD) candidate WVE-006. Wave made clinical history in October when it announced that WVE-006 succeeded in the first-ever clinical demonstration of RNA editing in humans by achieving positive proof-of-mechanism in RestorAATion-2.
M&A: Patent cliff to drive mid-range deals
The improving VC and IPO markets are giving market watchers hope for a rebound in the merger and acquisition (M&A) activity long cherished by investors as the most lucrative avenues for cashing in on their investments.
Deloitte’s Lyons said larger biopharmas are eager to replenish pipelines that will shrivel in coming years through “patent cliff” loss of exclusivity on numerous blockbuster drugs—such as Johnson & Johnson/Bayer’s blood thinner Xarelto® (rivaroxaban), Boehringer Ingelheim/Eli Lilly’s Jardiance® (empagliflozin), and AstraZeneca’s top-selling drug Farxiga® (dapagliflozin). Jardiance and Farxiga are both sodium-glucose cotransporter 2 (SGLT2) inhibitors indicated for type 2 diabetes, chronic kidney disease, and heart failure.
As a result, M&A is expected to bounce back from a year-over-year decrease in the dollar volume and number of transactions during the first three quarters of 2024. J.P. Morgan and DealForma reported 71 M&A deals totaling $43.2 billion between January–September 2024, compared with 75 deals totaling $61.1 billion in Q1–Q3 2023.
“There’s a couple of reasons for that. One is just the general economy, with companies wanting to understand, where are we going with interest rates, and are we getting to a level of stability on that? I also think that the election and the geopolitical environment played into that as well,” Lyons said. “The economy has stabilized, in terms of a better view of where interest rates are going. And I also think now with the understanding of who’s in the administration, we will see more M&A activity.”
During 2023, 106 M&A deals valued at a total $117.9 billion took place, a figure skewed by Pfizer’s $43 billion acquisition of Seagen.
In 2025, PwC’s Van den Akker said, his firm expects sustained M&A activity for mid-range transactions ranging in value from $5 billion and $15 billion—deals priced below the values of blockbuster combos like Pfizer-Seagen, but above “bolt-on” acquisitions of under $5 billion.
At the high end of that bolt-on range is 2024’s priciest acquisition—Vertex Pharmaceuticals’ $4.9 billion buyout of Alpine Immune Sciences, announced in April 2024 and completed the following month. The deal expanded Vertex’s specialty drug pipeline with Alpine’s IgA nephropathy (IgAN) candidate povetacicept, for which the Phase III RAINIER trial (NCT06564142) launched in October.
“The right deals will get done if the strategic and industrial logic is there. And we still have fantastic strides that are being made in innovation across all the therapeutic areas that we all, as watchers that are passionate about this industry, are tracking,” Van den Akker said. “We’re going to have that gap around the revenue that needs to be addressed. And corporate balance sheets are still good from a cash perspective. I think that is a very healthy setup for M&A activity levels into 2025.”
OMICS: Expansion and consolidation
Next-generation sequencing (NGS) tools developers will further grow their footprints into multiomics tools and tech following expansion efforts during 2024. NGS leader Illumina catapulted into multiomics in July when it acquired Fluent BioSciences, a single-cell technology developer, for an undisclosed price.
Last February, Element Biosciences announced a partnership allowing customers to stream data from its AVITI™ System directly to users of DNAnexus’ multiomic analysis platform—while Singular Genomics Systems added high-throughput multiomics and novel in situ direct sequencing of RNA (Direct-Seq™) targeted transcriptomics to its portfolio by unveiling its G4X™ Spatial Sequencer, the first of which was shipped to an early access customer in the third quarter. Singular found a buyer in December when it agreed to be acquired by Deerfield Management Company, for $20 per share.
“There is a lot of innovation coming out now that is pushing us from being a genomics company to a multiomics company,” Illumina CEO Jacob Thaysen, PhD, told GEN in an interview about his first year at the company’s helm.
Spatial biology will see fewer but larger tools developers among leading companies following consolidations during 2024. In October the two largest private companies in the field combined as Vizgen and Ultivue merged into a single provider of single-cell spatial genomics and multiplex proteomic profiling technologies.
As for public companies, Bruker acquired NanoString Technologies for $392.6 million cash plus assumption of liabilities in May after winning a competitive auction. Three months earlier, NanoString filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code, blaming a $31 million jury award assessed against it in a patent infringement case filed by rival 10x Genomics. 10x defended its strategy of aggressively litigating potential infringement of its patents, after several academic researchers, many of them customers, echoed criticisms of the company made by some of its competitors in a commentary published in GEN.
During 2024, Bruker rolled out new technology for its CellScape™ Precise Spatial Proteomics platform for highly multiplexed immunofluorescence (IF). 10x brought to market several new features for its Xenium In Situ single-cell spatial imaging platform and a new-and-improved HD version of its Visium Spatial Gene Expression platform. 10x also launched two new products from its Chromium single-cell analysis line aimed at expanding its customer base by emphasizing reduced costs as well as top-tier performance for both larger- and smaller-scale projects.
TRUMP 2.0: Going “wild” on biopharma, health
Biopharma and public health are bracing themselves for convulsive changes in regulatory policy and policymaking approaches they expect as a result of Donald Trump’s return to the White House later this month.
Trump signaled his intent to disrupt both days after his election win by announcing he wanted Robert F. Kennedy Jr. to “go wild on health” by nominating him for Secretary of Health and Human Services (HHS). Kennedy will head a subgroup of Trump appointees committed to his “Make America Healthy Again” agenda, along with Marty Makary, MD, as FDA commissioner, and Jay Bhattacharya, MD, PhD, as NIH director. All three have severely criticized measures promulgated to limit the spread of COVID-19, with Kennedy also taking aim at the safety of the messenger RNA (mRNA) vaccines, and Makary at vaccination schedules.
One area of medicine that Kennedy has pledged to encourage at HHS is psychedelic drugs. Several public companies in the space saw their stocks rise soon after Kennedy emerged as Trump’s choice for HHS, on the expectation that he would catalyze psych drug development.
“He is a free thinker and slightly unpredictable, I would say, but to me it feels as if he is interested in radically reforming the way medications are being approved. So, he may be a catalyst. But I think it all boils down to the data,” said Hans Eriksson, MD, PhD, chief medical officer (CMO) of HMNC Brain Health, a developer of precision psychiatry therapies focused treatment-resistant depression (TRD) and major depressive disorder (MDD).
The psych drug field suffered a setback in August when the FDA issued a complete response letter rejecting Lykos Therapeutics’ new drug application (NDA) for midomafetamine capsules to treat post-traumatic stress disorder (PTSD) in adults. The FDA requested Lykos conduct an additional Phase III trial—something the company’s new interim CEO and CMO agreed to in October.
“2024 was a bit marred by the disappointing outcome of the Lykos application with the rejection by the FDA. But I still think that there is much value in the psychedelic approach,” Eriksson said. “There are so many different players out there which all have their different small angle on how to achieve good efficacy with acceptable tolerability for patients with depression, PTSD, anxiety, and other disorders. So, I’m really hoping for some sort of a catch-up effect that things will start to come off in 2025.”
With its $100 million Series A financing in January 2024, Lykos was among psych drug companies winning large investor fundings over the past year. Reunion Neuroscience raised $103 million in Series A financing in May, while Seaport Therapeutics completed a $225 million Series B in October.
“Among the things brought up in the debate over the past year have been, yes, it’s very difficult to completely blind patients if they are getting a psychedelic with profound experiences. But would that really be a reason for us to reject that treatment option if it has many other advantages? I think investors have come to an understanding of that,” Eriksson added.
