Venture Investment In Life Sciences – Activity Update & Outlook (US & Europe)

Activity overview

Life sciences venture activity levels remained stable in 2024 and total investment value in the sector was up after a two-year period of decline. So far, 2025 paints a varied picture with a strong first quarter performance in terms of both value and volume. However, this pace did not continue into Q2 with a slow-down in activity levels which continued into the summer. This is perhaps reflective of the increasing uncertainty for the sector (particularly in the US) which is adding further pressure in what was already a challenging investment environment.

It is a similar tale for IPOs in the US. There was early promise with a flurry of biotech IPOs in the first two months of the year. However, this momentum was not sustained with only 4 between March and mid-September. Meanwhile, Europe's IPO scene remains practically non-existent with only 1 in the first half of the year.

In this article, we look at some of the key life sciences investment themes in 2025 so far and provide our outlook on the final months of the year and beyond. For our recent article on trends and themes in biopharma M&A, please see here.

Key investment themes

• 2025 has seen continued investor interest in companies utilising AI technology across the life sciences spectrum, with examples including:
• • AI driven drug discovery companies, Isomorphic Labs (which raised $600m in its first external financing round) and oncology-focused Pathos AI (which raised $365m its Series D financing in May).
  • Cera Care, an AI-led home healthcare company which secured $150m in debt and equity funding.
  • Abridge, which is utilising AI for clinical conversations and raised $300m in its Series E financing in June.
  • Neuralink which raised a $650m Series E financing to continue the development of its brain computer interface.
  • Healthcare AI / data solutions company Innovaceer, which raised $275m in its Series F funding round.
• In terms of therapeutic areas, popular biopharma investment targets include:
• • Neurology – with companies completing successful rounds including Neurona Therapeutics which raised $102m in an oversubscribed private funding round to advance its pipeline, including to take its lead candidate for epilepsy into Phase 3, and CNS-disorder focused Maplight's (also over-subscribed) $372.5m Series D in July.
  • Mirroring M&A trends, oncology continues to gather interest with some of the larger investment rounds including Pathos (as mentioned above) and Eikon which raised $351m in its Series D financing.
  • Similarly, interest in immunology remains steady as seen in the $200m Series C round raised by Abcuro (which is developing immunotherapies for autoimmune diseases and cancer) and Timberlyne Therapeutics, which raised a $180m Series A to advance what it sees as a potential best-in-class monoclonal antibody.
  • Despite doubts as to whether the trend would last, obesity / cardiometabolic has still been able to pull investors as seen in the over-subscribed $411 million Series A funding round by Verdiva Bio with its advanced next gen oral and injectables.
• Another theme which aligns with a broader trend shaking up the industry is the rise in investment in companies with underlying Chinese-developed technologies. The sector has recently seen a significant increase of licensing deals out of China (and, in contrast to the US and Europe, there has been a flurry of life sciences IPOs on the Hong Kong Exchange reflecting the interest and confidence in the region). We are now also seeing investment flowing into US and European biotechs that are developing technologies licensed from Chinese biotechs. Examples include the aforementioned Verdiva Bio (with candidates licensed from China's SciWind Biosciences) and Timberlyne Therapeutics (formed in partnership between Mountainfield Venture Partners and Chinese biotech, Keymed Biosciences, which is developing assets licensed from the latter).

Outlook for the rest of 2025 and beyond

In terms of the outlook for venture investment in life sciences in the US and Europe, we expect activity levels to remain relatively consistent whilst volatility and uncertainty for the sector remains. It is possible that the latter months of 2025 could see a slight post-summer uptick in investment and IPO activity but this cannot be called with any certainty.

In terms of investor focus, we expect companies utilising AI and other emerging technologies will remain a real focus for investors in the months (and years) ahead. Similarly, we expect more US and European biotechs will look to China-based assets and that these companies will continue to draw investment interest

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