Investors remain optimistic for a return of biotech IPOs in 2025 despite a market downturn following the announcement of US trade tariffs and layoffs at the US Food and Drug Administration (FDA) earlier this year.

Though optimistic, speakers at the recent LSX World Congress in London, UK, recognised that recent turbulence in the wake of US developments would force emerging biotechs, previously looking to go public, to seek other avenues of funding.

“We’re all aware that it’s a challenging market … a lot of uncertainty, whether it’s from the FDA, from the tariffs, or other macro factors,” said Max Klement, partner at investment company Novo Holdings. Klement noted a stark stagnation in IPO hopes for biotech compared to signs of an imminent uptick earlier this year.

Nonetheless, panellists insisted the downturn would prove temporary, saying untapped capital and unmet patient needs would encourage investors to support biotech. Developments at the FDA can be expected to resolve in six to nine months, stated Alastair Kilgour, founder of investment management firm Parkwalk Advisors, after which he believes the biotech IPO market could be expected to reopen, incentivised by the looming pharma patent cliff for various drugs.

In the meantime, speakers said biotechs will have to develop more detailed, targeted funding plans to extend their cash runways until IPOs re-emerge as a viable option.

“Fundraising at the moment is a full-time job for all the CEOs,” according to Dirk Kersten, partner at the venture capital firm Forbion.

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Panellists agreed that close relationships between biotechs and select investors have become increasingly important as developments in the US shake confidence in the industry. The speakers also noted that Trump’s tariffs levied against China and others have informed the broader behaviour of many big and small developers.

Kersten stated that many companies are now seeking greater US presence as tariffs deter imports into the country, citing the plans by Swiss-based Roche to invest $50bn in its US operations. Conversely, Klement pointed out that developers still look to China for high-quality outsourcing and cheaply acquired clinical assets.