As the industry turns its attention toward JPM 2026, conversations across the biotech community are increasingly focused on capital strategy, dealmaking momentum, and how companies can position themselves for the year ahead. On November 4th in San Francisco, as part of this broader pre-JPM dialogue, Biocom California hosted a panel discussion featuring Gilmartin Principal Kiki Patel, PharmD, alongside joined Jonn Beeson (Jones Day), Juan Cueva, MBA, PhD (Johnson & Johnson), and Zhanping Wu (Vivo Capital). The group explored how market conditions are evolving and what teams should prioritize as 2026 approaches. We’ve recapped the key takeaways from the discussion below:
Countdown to JPM 2026: The Current Biotech Landscape and the Road Ahead
The biotech industry stands at a rare intersection of recalibration and renewal. After navigating a period of market uncertainty defined by capital constraints and regulatory headwinds, the sector is finally beginning to demonstrate renewed momentum. At the same time, the playbook for financings, partnerships, and M&A has shifted, with new rules of engagement now shaping how success will be defined. This year’s discussions made one thing clear: companies that pair scientific differentiation with structural readiness are well positioned to yield successful outcomes.
Biotech Equity Capital Markets are Beginning to Stabilize
In the wake of the most subdued biotech IPO market in a decade, activity began to rebound in the second half of 2025, fueled by easing interest rates and a 20% year‑to‑date gain in the XBI. Equity issuances in 2025YTD have raised over $20 billion, down from more than $40 billion in 2024. However, $7 billion was raised in 3Q’25 alone, highlighting a resurgence of activity in the space. Investors remain highly selective and favor companies with robust data, clear differentiation, and tangible near‑term catalysts.
Successful IPOs in the current market backdrop tend to share common traits: late-stage programs with defined regulatory pathways, streamlined capitalization structures and disciplined capital deployment. Concurrently, creative deal structures have become a defining element of the market.
In the latter half of 2025, one of the defining financing dynamics was the reliance on Section 8(a) of the JOBS act, allowing registration statements to become automatically effective 20 days post-filing without SEC review. This enabled companies to push IPOs forward during the government shutdown, offering speed and predictability at a time when traditional processes were stalled. Companies such as Evommune (NYSE: EVMN) and MapLight Therapeutics (NASDAQ: MPLT) leaned on this “fast-track” route to access capital markets, despite the increased liability and market risk that came with bypassing SEC review.
While Section 8(a) proved to be an important stopgap in a difficult environment, its role was very much a product of those extraordinary conditions. As the government reopens and the SEC resumes normal operations, the expectation is that IPO execution will return to more traditional pathways, with investors closely watching how early adopters of Section 8(a) fare in the aftermarket.
Triple-Tracking Dealmaking: Maximizing Optionality in a Shifting Market
Strategic dealmaking remained robust in 2025. In Q3’25 alone, 33 announced M&A transactions generated over $30 billion in value, placing 2025YTD activity ahead of FY2024 in dollar volume. Large pharma continues to direct capital to late‑stage, de‑risked assets in oncology, immunology, and cardiometabolic disease.
As JPM 2026 approaches, Gilmartin Group is advising companies to “triple‑track” their financing strategy, simultaneously preparing for M&A, crossover, and IPO scenarios to maximize flexibility. Even those favoring a strategic exit are investing in IPO readiness, now seen as a marker of market maturity and deal preparedness. Deal structures are evolving across the market, moving toward staged acquisitions, milestone‑based collaborations, and co‑development agreements in response to regulatory and pricing pressures. At the same time, the ongoing SEC shutdown, changes in FDA leadership, and heightened FTC scrutiny are reshaping how buyers approach risk.
China, AI, and the Next Wave of Global Innovation
Cross border and early stage biotech deal flow is increasingly defined by two forces: China’s expanding role and AI driven discovery. China now represents nearly 40% of large pharma licensing and 30% of upfront payments, creating new partnership opportunities for U.S. biotechs.
For SMID cap biotechs in particular, there is a practical path to tap China’s innovation ecosystem, not by chasing assets but by prioritizing strategic alignment. More than 200 Chinese biotechs are currently attempting to go public, but with government approvals tightening, many are stuck in a growing IPO backlog. That pressure has opened a meaningful window for partnerships because these companies still need capital, validation, and global development pathways, and U.S. biotechs can offer exactly that.
The most effective structures are increasingly regional rights or co development deals, where each side brings something complementary. U.S. companies contribute global regulatory expertise, capital, and commercial reach, while Chinese partners offer development speed, operational efficiency, and lower manufacturing costs. Together, these paired strengths are shaping a new model for cross border innovation.
Meanwhile, AI has shifted from a productivity enhancer to a core deal thesis, with financings and partnerships centered on machine learning platforms for drug design. The market now expects tangible proof of impact including faster target ID, improved hit rates, and shorter development cycles rather than AI washing legacy R&D processes.
As 2026 approaches, the real measure of AI’s value will be its ability to translate innovation into measurable results, driving efficiency gains and data driven differentiation that influence valuations, define deal terms, and strengthen investor confidence.
Engaging Both Hedge Funds and Long-Only Investors
The JPM 2026 Playbook: Precision Over Volume
As biotech executive teams prepare for JPM, the playbook has shifted. Success is no longer about stacking as many meetings as possible but about delivering a clear, compelling message to the right investors. Companies are streamlining decks, focusing on what matters, and tailoring narratives to match investor priorities. Every meeting should leave both sides with a clear next step. The most effective JPM actionable strategies now emphasize:
- Follow-through: Fast, structured post-meeting recaps and clear next actions to keep momentum alive.
- Clarity: Simple, credible, high-level stories supported by clean data and a tight 10–15 slide JPM-specific deck.
- Focus: Avoid over-scheduling and over-staffing. With 30-minute meetings, think of JPM as biotech speed dating—hit the essentials and save deep dives for follow-ups.
- Balance: Meet with a mix of investors. Long-only firms provide stability and validation, while hedge funds bring velocity and often represent the majority of initial demand. The strongest outcomes blend both.
- Readiness: Early preparation of financial audits, regulatory materials, and diligence packages to accelerate post-JPM conversations.
In Conclusion
As the industry heads into 2026, one theme is unmistakable: biotech success will favor companies that pair true scientific differentiation with operational discipline and strategic readiness. With capital markets stabilizing and dealmaking pathways expanding, now is the moment for teams to sharpen their stories, build optionality, and position themselves to convert JPM momentum into meaningful outcomes throughout the year ahead.
Reach out to our team to learn more about how we partner with clients.
Authored by: Kiki Patel, PharmD (Principal), Gilmartin Group & Michaela Pritchett (Associate), Gilmartin Group