Biotech After the Reset: Capital, Discipline, and Return of Execution - What Will 2026 Reward

Following the J.P. Morgan Healthcare Conference and heading into the Biocom Global Life Science Partnering & Investor Conference, I’ve been reflecting on how dramatically the biotech landscape has reshaped itself over the last few years and what that means for 2026. 

During the COVID era, capital was abundant, and speed was rewarded. Money was relatively cheap, timelines were aggressive, and many programs moved forward on promise rather than proof. That period created momentum, but it also obscured weaknesses in execution, development discipline, and strategic rigor. Not everyone who accelerated early was actually built for the full race. 

Then came the 2023 biotech winter. Capital tightened, risk tolerance dropped, and the market split clearly into haves and have nots. Companies without credible data, realistic development plans, or strong operating discipline simply ran out of runway. Others slowed down, recalibrated, and learned how to operate under real constraints.

A Market Reset Around Execution 

At J.P. Morgan this year, the dominant theme wasn’t optimism or pessimism, it was execution – a theme also echoed by my colleagues in a recent blog. Capital is coming back, but selectively, and behind teams that can consistently translate strategy into outcomes. Investors are no longer underwriting stories; they’re underwriting how companies operate. 

Interestingly, I’ve been thinking about execution through a lens that comes from outside biotech. My sons are fascinated by racing and cars, and in learning alongside them, almost rediscovering that world through their eyes, I’ve been struck by how often winning comes down to execution, not just engineering. 

One story that keeps coming up is Carroll Shelby’s push into European racing. The breakthrough wasn’t simply building a powerful car to compete with established teams, it was pairing the right machine with the right driver, assembling a team that understood the track, the conditions, and the strategy, and making disciplined decisions lap after lap. Success didn’t come from raw horsepower alone; it came from alignment between people, technology, and execution under pressure. 

That lesson translates directly to biotech today. Platforms and technology are more widely available than ever. What differentiates outcomes is whether the right people are in the right seats, whether teams know how to interpret data, anticipate regulatory expectations, adapt strategy, and execute consistently across inflection points. 

Racing Toward the Patent Cliff 

There’s another parallel that keeps surfacing: the industry is racing toward a very real patent cliff. For large pharma, this isn’t a surprise, it’s a known stretch of track. The difference between winners and losers isn’t whether they see it coming, but how early they prepare for it. The strongest teams don’t slam on the brakes at the edge; they plan their pit stops well in advance through disciplined M&A, lifecycle strategy, and selective partnering, so they can carry speed through the turn rather than lose momentum. 

That dynamic is already shaping dealmaking. Strategic buyers are prioritizing assets that can slot cleanly into future portfolios, with clear regulatory paths, durable IP, and development plans that stand up under scrutiny. In that sense, today’s M&A activity isn’t opportunistic, it’s preparatory. 

Deal Activity in 2025: Quality Over Quantity 

2025 reflected a market in transition. Dealmaking showed signs of selective resurgence, defined far more by quality than volume. Total life sciences M&A value climbed sharply, estimated at roughly $200–250B for the year, even as overall deal count softened, signaling tighter strategic focus. 

The mix of transactions was telling: 

• Several mega-deals exceeding $10B were driven by global players such as J&J, Novartis, Pfizer, Sanofi, and Merck, focused on late-stage or de-risked platforms. 

• Strategic mid-size acquisitions continued, particularly in oncology, immunology, and inflammation, reinforcing demand for differentiated, near-clinical assets. 

• Early-stage biotech M&A remained constrained, creating a bifurcated market where top-tier assets commanded premium interest while others faced restructuring, spinouts, or pivot strategies. 

Public markets told a similar story. The biotech IPO window in 2025 was uneven, muted early in the year, with tighter valuations and investor caution but showed pockets of reopening in the second half. Public capital was available, but only for companies with strong data and credible execution narratives. 

The Four Pillars of Biotech Investing Still Holding 

At JPM, capital concentration was remarkably consistent. Four therapeutic areas continued to anchor investor focus: oncology, immunology/inflammation, cardiometabolic disease, and more selectively rare disease. 

What’s changed isn’t where capital is going, but how selectively it’s being deployed within these pillars. Execution, differentiation, and regulatory clarity matter more than ever. 

AI as an Execution Multiplier, not a Standalone Thesis 

Another theme gaining traction is AI as an execution multiplier reshaping how biotechs operate and how regulators engage. AI is increasingly embedded across target identification, trial design, patient stratification, real-world evidence generation, and CMC optimization. 

In parallel, the FDA is actively modernizing its own use of advanced analytics and AI-enabled tools to support review efficiency, signal detection, and consistency. The implication for sponsors is clear: AI does not replace strong biology, clinical judgment, or regulatory rigor, but it increasingly differentiates teams that can move faster, design smarter programs, and engage regulators with higher-quality evidence. In this environment, AI becomes less about novelty and more about operational maturity. 

External Headwinds Reshaping Risk 

Layered onto all of this are growing external pressures. Global competition, particularly from China, continues to intensify, with faster development timelines and aggressive investment across modalities. At the same time, reduced and less predictable NIH funding is narrowing the early-stage innovation funnel, pushing more technical and financial risk onto private capital. 

Add in ongoing U.S. drug pricing reforms, including price caps and negotiation authorities, and the impact becomes asymmetric. Large pharma can absorb these pressures by reprioritizing portfolios and reallocating capital. Smaller biotechs with one or two assets cannot; For them, execution, sequencing, and strategic optionality become existential. 

Where Execution Matters Most 

Looking ahead, the biotech industry in 2026 will be defined less by bold claims and more by disciplined follow-through. The companies most likely to attract capital will be those that consistently convert strategy into outcomes, designing clinical programs that answer decision-critical questions, aligning early with regulatory expectations, preserving optionality through staged development, and executing reliably across inflection points rather than only financing milestones. 

As a result, regulatory and development strategy will continue to move to the center of investor conversations, not as compliance exercises, but as indicators of whether a program can sustain momentum and generate durable value. 

In that sense, Biocom is poised to be the natural continuation of the post J.P. Morgan dialogue. This is where execution will become visible in how partnerships are structured, capital is allocated, and the next phase of growth is deliberately planned. 

The free money era is over. The market has already begun its sorting. 

If 2026 proves anything, it will be that success won’t belong to those who move fastest out of the gate, but to those who finish strong. 

Halloran Consulting Group, part of ProductLife Group (PLG), partners with early-stage companies, CEOs, and investors to bring deep regulatory and development expertise with global reach, helping teams execute with discipline across critical inflection points.

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