Ongoing political and economic turbulence in the US is casting uncertainty over the biopharmaceutical sector, with initial public offerings (IPOs) expected to slow as investors assess the risks.
Sweeping policy changes under President Trump’s administration – ranging from new tariffs to drastic cuts in key health agencies – have created instability that could deter investment and delay IPO activity. However, while the US market faces headwinds, shifting regulatory dynamics may present new opportunities for UK-based innovation, according to speakers at the OBN BioTrinity conference in London on 2 April 2025.
Experts at the meeting highlighted that while investor confidence in public markets remains fragile, companies should increasingly look at alternative funding strategies such as mergers and acquisitions (M&A). At the same time, regulatory restructuring in the US has led to concerns about the capacity of the US Food and Drug Administration (FDA), potentially creating an opening for the UK’s Medicines and Healthcare products Regulatory Agency (MHRA) to attract more business.
Biopharma IPOs saw a resurgence in 2024, with 50 companies completing IPOs and raising a total of $8.52bn. This marked the highest total IPO value raised since 2021, signalling a recovery in public markets as per a GlobalData analysis, the parent company of Pharmaceutical Technology.
Despite this resurgence, investors are facing renewed volatility this year. The instability stems from Trump’s recent tariff announcements and sweeping cuts to healthcare agencies, including the FDA, the Centers for Disease Control and Prevention (CDC), and the National Institutes of Health (NIH).
“Investors hate uncertainty, and we’re getting a lot of uncertainty right now, unexpected tariff wars, global conflict. People aren’t sure what’s happening with the FDA,” said Bill Hicks, co-chair of Mintz’s life sciences law practice.
“We could be looking at 18 months of pretty high uncertainty.”
He added that interest rates will also be a determining factor in how biotech investment trends evolve. “If interest rates come down, biotech becomes more [attractive]… We need some level of macro stability before the IPOs will come back.”
New England Biolabs director Kiran Gulati stated: “In this environment, companies should increasingly explore alternative funding strategies.
“It just lends to the argument to look at other options through M&A, or other ways to build funding, build the value of your business instead of sitting back and burning the cash.”
