GlobalData’s Venture Capital Investment Trends In Pharma – Q3 2025 report revealed that the biotech industry witnessed a 70.9% increase in total venture financing deal value from $1.8bn in Q2 2025 to $3.1bn in Q3 2025, signaling a potential market recovery as investor confidence improves.
Following a peak in 2021, the biotech funding environment saw a two-year downturn in investment, driven by macroeconomic challenges. Signs of a funding recovery emerged in 2024, fueled by interest rate cuts, with the trend continuing to Q1 2025. However, US President Donald Trump’s second term in office, which began in January 2025, contributed further to the challenging funding environment as tariffs, drug pricing pressures, funding cuts to the National Institutes of Health (NIH), and layoffs at the FDA and Centers for Disease Control and Prevention (CDC) created market uncertainty.
Despite ongoing challenges stemming from Trump’s policies and economic headwinds, investor confidence increased in Q3 2025 amid an uptick in merger and acquisition (M&A) activity, with a 36.7% increase in total deal value compared to the previous quarter, to $43.2bn in Q3 2025, according to GlobalData’s M&A Trends in Pharma – Q3 2025 report. Interest rate cuts that were announced by the US Federal Reserve in September 2025 further boosted investor optimism by lowering the cost of capital, which may facilitate greater venture capital investments in biotech.
According to GlobalData’s Pharmaceutical Intelligence Center Deals Database, Series D rounds of financing saw the highest growth compared to series A, B, C and E financing, rising 60-fold from Q2 2025 to a total of $832m. This indicates a shift in capital towards later-stage growth and expansion investments in existing portfolio companies.
In August 2025, California-based company Kriya Therapeutics secured the largest financing round of Q3, raising $320m in Series D venture financing towards its pipeline of gene therapies targeting chronic diseases of high unmet need. The company’s lead drug, KRIYA-825, is an intravitreal gene therapy that expresses a fusion protein inhibiting complement C3 and C5, and is currently recruiting for its Phase I/II trial for geographic atrophy.
In September 2025, Boston-based company Odyssey Therapeutics raised $213m in Series D venture financing towards the development of its targeted autoimmune drugs, including its TNFR2 agonist OD-00910, which has a planned Phase I trial in systemic lupus erythematosus, vitiligo, and type 1 diabetes.
