Struggling Biotechs Face Harsh Market as Funding and Clinical Successes Dry Up in 2025

Layoffs and workforce reductions have persisted into 2025, with multiple biotechs—including Keros Therapeutics, Stealth BioTherapeutics, iTeos Therapeutics, Boundless Bio, and Eikon Therapeutics—cutting significant portions of their staff, often following failed or discontinued clinical programs12.

Investor caution remains high into 2025, with venture investments increasing slightly in value ($26B in 2024) but occurring over fewer deals, pointing towards greater selectivity and leaner operational strategies across the industry2.

The public markets for small-cap biotechs have performed poorly, with these stocks down an average of 17% over the first quarter of 2025, reflecting ongoing hesitancy among investors4.

Merger and acquisition activity has slowed, as major pharmaceutical companies leverage the desperate conditions in biotech to demand lower prices, leading to many deals falling apart due to valuation gaps and increased uncertainty3.

The biotech job market remains highly competitive, with fewer openings and more applicants, resulting in a 12% drop in available roles and a 51% increase in job response rates in late 2024, trends likely persisting into 20252.

Sources:

1. https://www.fiercebiotech.com/biotech/fierce-biotech-layoff-tracker-2025

2. https://www.labiotech.eu/trends-news/biotech-job-market-2025/

3. https://www.biopharmadive.com/news/deals-pharma-biotech-market-turmoil-uncertainty-acquisitions/747210/

4. https://www.statnews.com/2025/03/06/biotech-investing-wall-street-scorecard/