Latest / Making Medicine / Biotech in 2025: Investment Trends, Congress, and Approvals

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Biotech in 2025: Investment Trends, Congress, and Approvals · Making Medicine

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  Speaker 1: At Making Medicine. We're reporting on the headlines, not making
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  Speaker 1: medical recommendations. For personal health questions, always consult a doctor.
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  Speaker 1: Nothing in this episode constitutes investment, financial, or legal advice,
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  Speaker 1: and please consult your own advisors before making decisions. Hello,
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  Speaker 1: and welcome back to the Making Medicine Podcast, where science,
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  Speaker 1: policy and innovation meet. I'm your host John Stanford.
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  Speaker 2: Today, as we close out the year, we're excited to
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  Speaker 2: share a year in review look at the twenty twenty
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  Speaker 2: five biotech investment trends, the latest FDA approvals, and what
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  Speaker 2: Congress is doing as twenty twenty five comes to a close.
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  Speaker 2: Let's dive in. Barring any last minute surprises. This will
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  Speaker 2: be Congress's last week in Washington, so we'll start there
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  Speaker 2: and talk about how they plan to close out the
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  Speaker 2: year this week. First up, the House passed the FY
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  Speaker 2: twenty twenty six NDAA, that defense bill we talked about
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  Speaker 2: on last week's episode, by a wide bipartisan margin in
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  Speaker 2: the Senate. It looks good to clear with bipartisan votes
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  Speaker 2: there later this week. If you listened to last week's episode,
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  Speaker 2: you heard our deeper dive on the defense bills biotech priorities,
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  Speaker 2: but The bottom line, and I do encourage you to
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  Speaker 2: take a listen, is that the NDA makes clear that
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  Speaker 2: Congress is treating biotech as both an industrial capacity priority
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  Speaker 2: and a national security issue. It's going to be something
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  Speaker 2: we're talking about next year. Next. House leadership is teeing
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  Speaker 2: up a vote this week on a Republican healthcare package
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  Speaker 2: branded the Lower Healthcare Premiums for All Americans Act. We're
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  Speaker 2: recording this on Wednesday morning, so by the time you
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  Speaker 2: hear it, a vote may have already happened. So what
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  Speaker 2: is in the House Republican package. It's a mix of
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  Speaker 2: long running priorities, things like expanding access to certain employer
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  Speaker 2: sponsored options and association health plans. And it also includes
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  Speaker 2: provisions around PBM transparency, but without a solution to the
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  Speaker 2: ACA cliff. Even if it does pass the House with
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  Speaker 2: just a few days left in the congressional calendar, it
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  Speaker 2: won't clear the Senate. The bottom line, the House is voting,
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  Speaker 2: but the bigger story is what isn't happening. There's no
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  Speaker 2: clear path right now to prevent premium spikes on January one.
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  Speaker 2: That means healthcare policy is first up to be a
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  Speaker 2: key issue in twenty twenty six and will likely be
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  Speaker 2: on tops of voters' minds come midterm elections as millions
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  Speaker 2: of Americans deal with higher premiums. That's less than a
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  Speaker 2: year away. Now, let's talk PBMs. PBM reform has been
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  Speaker 2: the next up in Congress for what feels like forever,
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  Speaker 2: strong bipartisan rhetoric, lots of hearings, lots of draft text
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  Speaker 2: reviewed by the incubate team, but repeated failures to get
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  Speaker 2: these major reforms across the finish line. In fact, multiple
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  Speaker 2: efforts to move PBM reforms through must pass vehicles have
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  Speaker 2: repeatedly bogged down or been stripped back, maybe most notably
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  Speaker 2: with last year's end of year continuing resolution against that backdrop.
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  Speaker 2: Two pieces of legislation have gotten some renewed attention. First,
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  Speaker 2: the Help Copays Act. The Help Ensure Lower Patient Copays
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  Speaker 2: Act targets a very specific set of practices where patient
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  Speaker 2: assistance doesn't always count towards a patient's deductible or out
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  Speaker 2: of pocket maximum. It was introduced in the House by
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  Speaker 2: a bipartisan group of representatives and in the Senate earlier
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  Speaker 2: this year. Supporters frame this as a straightforward patient protection move.
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  Speaker 2: If a patient has copay assistance. It should reduce what
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  Speaker 2: they pay at the pharmacy counter, not get captured by PBMs. Second,
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  Speaker 2: the PBM Price Transparency and Accountability Act, introduced earlier this
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  Speaker 2: month by Senators, widening CREPO. It focuses heavily on Medicaid
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  Speaker 2: and medicare mechanics, preventing abuses across spread pricing and Medicaid,
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  Speaker 2: improving payment accuracy, and increasing PBM accountability. All of this
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  Speaker 2: is a lot of words covering PBMs, which we have
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  Speaker 2: talked about tirelessly. In fact, I was pretty stunned in
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  Speaker 2: the midst of presidential debates that the acronym PBM made
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  Speaker 2: the news. So it's clear that efforts to call attention
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  Speaker 2: to the price gouging middlemen that seem to constantly avoid
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  Speaker 2: legislative reform. It's clear that it's broken through, but nothing
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  Speaker 2: has gotten done. So what should you listeners take away?
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  Speaker 2: Congress keep circling PBM reform because there's broad agreement that
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  Speaker 2: the system is too opaque and incentives are misaligned. But
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  Speaker 2: getting a package and acted remains hard, especially when reforms
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  Speaker 2: get tied up in bigger healthcare and budget fights. In
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  Speaker 2: the near term, PBM provisions are increasingly being folded into
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  Speaker 2: legislative vehicles, including the House healthcare debate we just talked about,
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  Speaker 2: and before we get into our version of twenty twenty
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  Speaker 2: five wrapped as far as investment goes, one last quick
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  Speaker 2: policy update relevant to incubate and a bill that we've
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  Speaker 2: been pushing. The House passed and we celebrated, the invest Act,
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  Speaker 2: or the Incentivizing New Ventures and Economic Strength through Capital
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  Speaker 2: Formation Act of twenty twenty five. It add a strong
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  Speaker 2: bipartisan vote three hundred and two to one hundred and
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  Speaker 2: twenty three. The bill heads over to the Senate, where
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  Speaker 2: its future remains unclear, but will be pushing to have
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  Speaker 2: it taken quickly because it has a meaningful impact on
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  Speaker 2: early stage biotechs trying to access both private and public capital.
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  Speaker 2: What does the bill do? First, There'll be less friction
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  Speaker 2: in early fundraising because the Act includes practical updates that
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  Speaker 2: make it easier for founders to raise money without tripping wires,
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  Speaker 2: like clarifying the pitches at certain sponsored events aren't automatically
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  Speaker 2: treated as a general solicitation, and raising the crowdfunding threshold
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  Speaker 2: that triggers costly accountant reviews. Second, it gives a clear
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  Speaker 2: runway to IPOs in staying public on public markets. The
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  Speaker 2: bill aims to make going public less burdensome for growth companies,
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  Speaker 2: reducing financial history required in the initial egc FI from
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  Speaker 2: three years to two, expanding access to confidential draft submissions,
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  Speaker 2: and making quote testing the waters available to all issuers.
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  Speaker 2: The bottom line for innovative pre revenue biotechs, the package
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  Speaker 2: is designed to widen the funnel of early capital and
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  Speaker 2: lower the costs and friction of eventually accessing public markets.
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  Speaker 2: It's exactly the kinds of changes that can matter when
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  Speaker 2: capital is tight and timelines are long. Incubate was proud
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  Speaker 2: to support House passage and looks forward to engaging with
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  Speaker 2: Senators to get it over the finish line. It's not
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  Speaker 2: sexy stuff, to be sure, and it doesn't make a
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  Speaker 2: lot of headlines, but lessening the barriers for getting companies
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  Speaker 2: to access public markets could help with the slowdown that
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  Speaker 2: we've had over the last half decade. Before we close,
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  Speaker 2: I want to share a quick sneak peek at some
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  Speaker 2: of the twenty twenty five biotech investment data we'll be
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  Speaker 2: releasing in much more detail in January through our Incubate
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  Speaker 2: Policy lab. Here are some big numbers that show that
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  Speaker 2: biotech had a good year to bite uncertainty and policy headwinds,
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  Speaker 2: at times slowing us down. From January through November, we
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  Speaker 2: tracked seven hundred and fifty two investments into early stage biotechs,
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  Speaker 2: totally about sixteen point five billion in venture capital. With
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  Speaker 2: regards to specific therapeutic areas, a few themes jumped out.
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  Speaker 2: Oncology remains on top with more than two hundred deals
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  Speaker 2: representing roughly four point two billion dollars. Neurology and immunology
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  Speaker 2: each drew a little under two billion dollars, and lastly,
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  Speaker 2: rare diseases with orphan drugs saw more than fifty investments
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  Speaker 2: totaling around one point seven billion dollars. We've seen an
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  Speaker 2: uptick in rare disease investments following the passage of the
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  Speaker 2: Big Beautiful Bill in July. It's a real world example
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  Speaker 2: of how policy can shape incentives. Congress fixed one of
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  Speaker 2: the major flaws of the IRA, and we're already seeing
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  Speaker 2: dollars come back into the system. Geographically, there were no
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  Speaker 2: surprises on the top states, but the numbers are striking.
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  Speaker 2: California had two hundred and twenty one deals, about six
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  Speaker 2: point one billion dollars in Massachusetts had just shy of
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  Speaker 2: one hundred and fifty deals representing roughly four point six
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  Speaker 2: billion dollars, but there was a strong showing from other
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  Speaker 2: states that round out our top five. New York had
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  Speaker 2: forty four deals with four hundred and forty five million dollars,
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  Speaker 2: Pennsylvania with thirty five deals representing four hundred and forty
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  Speaker 2: million dollars, and Texas with thirty four deals, had pulled
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  Speaker 2: in a whopping one point one billion dollars. Congratulations to
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  Speaker 2: Texas for breaking the billion dollar threshold for investment in
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  Speaker 2: early stage biotech. Being the political wonky nerds we are,
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  Speaker 2: we also had to break this down by congressional House districts,
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  Speaker 2: and it's obvious that some members sit on enormous concentrations
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  Speaker 2: of innovation. We would expect these members to also therefore
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  Speaker 2: be champions for life science policy. Representative Ayana Presley's district
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  Speaker 2: leads by deal count with sixty eight investments totally more
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  Speaker 2: than two billion dollars. Kevin Mullen in California, just outside
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  Speaker 2: of San Francisco, had sixty one deals nearly three billion investment.
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  Speaker 2: Catherine Clark in Massachusetts, who's also in the leadership of
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  Speaker 2: the Democratic Party had thirty one deals with just over
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  Speaker 2: a billion dollars invested. Nancy Pelosi, the former Speaker of
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  Speaker 2: the House who has announced her retirement, had thirty five
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  Speaker 2: deals just over six hundred million, and Scott Peters down
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  Speaker 2: in San Diego had twenty four investments with also just
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  Speaker 2: over six hundred million dollars. One last data point that
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  Speaker 2: we're going to look forward to digging deeper in. In
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  Speaker 2: the official Incubate Policy Lab report on this AI enabled
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  Speaker 2: biotech is real not hype, we caught an interesting trend
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  Speaker 2: in investments as the year progressed. One hundred and forty
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  Speaker 2: four investments to be exact into companies that are utilizing
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  Speaker 2: AI in drug discovery and development, totaling about three billion
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  Speaker 2: dollars so far this year. We'll have a full breakdown
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  Speaker 2: early next year, and this will certainly be something we're
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  Speaker 2: talking about at our event at JP Morgan's conference in January. Lastly,
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  Speaker 2: for this episode, we always like to end on a
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  Speaker 2: positive note, and it's time for our FDA Approvals corner.
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  Speaker 2: For all the noise in policy and politics and debates
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  Speaker 2: over healthcare, the point of all of this work is
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  Speaker 2: simple new treatments reaching patients who need them. So we'll
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  Speaker 2: take a quick spin through what was announced in November,
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  Speaker 2: and we love celebrating the winds that represent years, if
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  Speaker 2: not decades, of scientific effort, clinical trial participation, and perseverance
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  Speaker 2: across the ecosystem, not to mention, of course, the risk
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  Speaker 2: capital that makes it all possible. Voice Act, developed by Otsuka,
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  Speaker 2: was approved November twenty fifth for kidney disease. Higher Nuo,
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  Speaker 2: developed by Bayer, was approved November nineteenth to treat certain
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  Speaker 2: non small cell lung cancers. Fordemp Loo, developed by Arrowhead Pharmaceuticals,
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  Speaker 2: was approved a day before November eighteenth to reduce triglycerides
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  Speaker 2: and adults with a disorder where the body can't break
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  Speaker 2: down dietary fats. Comesifty developed by Cora Oncology, was a
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  Speaker 2: pre of November thirteenth to treat adults with relapsed or
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  Speaker 2: refractory acute myloid leukemia. And finally, Kaijevi, developed by UCB,
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  Speaker 2: was approved November third to treat thimidine kinnase two deficiency
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  Speaker 2: and patients who start to show symptoms when they are
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  Speaker 2: twelve years or younger. I'm particularly encouraged by the last one.
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  Speaker 2: Because pediatric trials and pediatric drug development can be so complicated,
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  Speaker 2: we should always celebrate just a little bit more for
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  Speaker 2: drugs that help the youngest patients. That's our approvals corner
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  Speaker 2: for the month. Five reminders that innovation is moving and
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  Speaker 2: the progress is real even when the headlines are messy.
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  Speaker 2: We'll keep tracking the policy, but we'll always make time
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  Speaker 2: to celebrate what matters most, new options, new hope, and
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  Speaker 2: better outcomes for patients and families. That wraps up this
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  Speaker 2: year in review episode of the Making Medicine podcast. If
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  Speaker 2: you have thoughts on the twenty twenty five investment data
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  Speaker 2: or the FDA approvals we covered today, drop us a
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  Speaker 2: comment and we may feature it in an upcoming episode.
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  Speaker 2: Be sure to subscribe up on YouTube and follow us
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  Speaker 2: on LinkedIn, x and Instagram using the links in the description.
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  Speaker 2: Thanks for listening, Happy holidays, and as always, keep innovating.