How to Maximize Another Flattish Year in Biotech

The prevailing mood was one of measured optimism: capital is available, and deal flow is returning, but expectations around execution have tightened significantly. While science, innovation, and positive clinical data are critical, operational readiness has become just as critical as the science itself in de-risking execution and earning.

The biotech fundraising environment remains selective and disciplined. While the FDA demonstrated resilience in 2025 with approval levels in line with historical averages, the nature of those approvals reflects a structural shift in the sector. A growing proportion of newly approved drugs are targeting smaller, orphan or precision indications, with fewer assets supporting blockbuster-scale commercial opportunities. As a result, capital is still available, but it is more targeted, more data-driven, and increasingly focused on differentiated science, capital efficiency, and clearly defined development paths rather than broad, high-risk platform stories.

Investors are more pragmatic, doubling down on whether key milestones are met, if there’s a credible regulatory strategy, realistic chemistry, manufacturing, and controls (CMC) plan, and if they are inspection ready, just to name a few. As a result, the presentations that resonated most were those grounded in realism and operational discipline.

As I hinted earlier, investors are looking for practical and efficient strategies and operational approaches to carry out programs. The same questions were asked repeatedly to the biotech presenters, sending a clear message about what is essential for 2026.

The AI boom continues to reinforce its fundamental role in drug development, but the tone is shifting from hype to execution. In company presentations, investors responded most positively to pragmatic, well-defined AI strategies with clear use cases and tangible proof points. AI is now a standard part of investment due diligence, not a differentiator, but a tool to drive efficiency and better decision-making. While it is not a cure-all, investors are increasingly focused on strategic, right-sized AI applications that are well aligned with a company’s stage, resources, and development priorities.

For smaller, emerging companies, the most important step is to focus on operational readiness. While operational readiness has traditionally centered on systems, processes, and technology, people are an equally critical part of the equation.

Successful biotechs, in 2026 and beyond, will be upgrading their capabilities and functions to handle increasingly complex environments, building a high-performance culture that embraces change, innovation, and continuous learning, and aligning operational, regulatory, and commercial goals to drive seamless execution in a still unpredictable landscape.

At the end of the day, a clear, safe, and efficient path to first-in-human trials will always matter more than any trend or technology.

Trust is a critical component of any successful fundraising or partnering process. For smaller biotech companies, building relationships with investors and potential partners well ahead of any formal “go or no-go” decision can significantly improve the odds of success. Too often, companies only approach the market when they urgently need capital or a deal. Starting earlier by sharing progress, being transparent about challenges, and building credibility over time makes those conversations far more productive when the time comes to raising funds or executing a transaction.

Biotech founders must master both their science and innovation, but also the art of human connection. Trust is at the center of that connection, but also the wildly unpredictable notion of likeability and founder-investor chemistry is at play.

As such, biotech founders must also recognize that scientific rigor must also be paired with relationship management and emotional intelligence. In other words, know who you’re talking to.

Lastly, investors talk. So, the more you master relationships and trust building, those skills may pay off with an investor network.

As Albert noted, trust building from the onset is critical. Trust is what enables relationships. And this environment is all about relationships. Strong investor relationships go beyond just a single round. They enable honest dialogue, and can unlock strategic support beyond capital, including introductions, operational guidance, and more.

Also, well-nurtured relationships increase the changes investors will stick with a biotech through all the ups and downs of product development and regulatory hurdles, helping to scale the business effectively.

In a tighter capital market, investors are backing teams they believe can navigate adversity, not just teams with promising data.