Jan 14 (Reuters) – Investors are eyeing a rebound in the U.S. biotech sector in 2026, as more companies are expected to go public amid a renewed deal-making appetite and a lower interest rate scenario, even as they come ​to terms with the political and regulatory environment.

Amid President Donald Trump’s policy shifts, the most disruptive scenarios for healthcare now appear less ‌likely, helping restore a degree of confidence after tariff threats, funding cuts and sweeping changes to the U.S. Food and Drug Administration.

“While some uncertainty still exists, the worst case scenarios ‌have largely been taken off the table and that gives investors more comfort in taking steps into the water and making decisions based upon at least some expectation of normalcy,” said Andrew Fein managing director of equity research at H.C. Wainwright.

Initial public offerings in the biotech sector plunged to their lowest level in more than a decade in 2025.

Uncertainty still lingers around drug development timelines, pricing pressure and how U.S. policies interact with non-U.S. markets, but greater clarity on ⁠the policy environment has reduced the fear of sudden ‌shocks.

“I think for the most part, it just continues to be a lot of headline risk,” said Kevin Eisele, managing director at William Blair. “But as investors have digested a lot of the news, it feels like the risk has ‍somewhat subsided and investors are again more willing to put positions or put capital to work in the sector.”

Only 10 biotechs went public in 2025, Dealogic data shows, down from 26 companies in 2024 and a record 93 in 2021, with mixed performances after their debuts.

BIOTECH SHARES GAINING MOMENTUM

Biotech stocks are regaining favor among investors, with ​many expecting 2026 to be a potential turning point, driven by improving market dynamics, more mature trial data and a backlog of companies that ‌delayed going public last year, according to Wall Street analysts and investors.

The SPDR S&P Biotech ETF, which serves as a key gauge of the biotech sector’s health, ended 2025 up 33%, rebounding from early-year pressure.

“Investor sentiment follows price, and the pricing narrative in this space has definitely become more optimistic in the second half of 2025 relative to the first half…So I’d expect some of that momentum would continue into 2026,” said David Wagner, head of equities at Aptus Capital.

LATE-STAGE PIPELINES DRAW INVESTOR ATTENTION

The total U.S. biotech IPO proceeds in 2025 were $1.6 billion, paling in comparison to $16 billion raised in 2021, ⁠according to Dealogic data.

At least four industry experts said investors will seek out biotechs ​which have drugs in mid-to-late-stage development.

“Once you’ve already developed some proof of concept and help ​reduce some of the early risk, that’s where I think most investors continue to be interested,” said Eisele.

Companies with drugs in areas such as cancer, obesity, precision medicine and respiratory diseases will be in focus, experts added.

“I don’t think we’re ‍going to get to an IPO-for-all market ⁠like we were in 2020 or 2021, but I think we will have a much more robust market than we’ve had over the past couple of years,” said Seth Rubin, head of global equity capital markets at Stifel.

Capital inflows and lower interest rates could also provide ⁠a boost to the sector and pave the way for stronger public market debuts.

Although interest rates seem unlikely to revert to 2020 levels anytime soon, the lower rates have already ‌opened the gates for a flurry of secondary offerings in the later half of 2025, RBC Capital Markets analysts said.

(Reporting ‌by Christy Santhosh and Sriparna Roy in Bengaluru; Editing by Krishna Chandra Eluri)

Source: finance.yahoo.com

But do they really matter? After all, some patents can be worked around, and others which are relevant end up having little value unless the company is prepared to defend them, and has the resources to do that. In a classic example, in the late 19th century, Westinghouse Electric had partnered with Nicholas Tesla who held the patents on AC electricity while Edison General Electric had the patents on DC electricity. When it became clear in 1890 that AC was the winner, GE (which was backed by JP Morgan) just ignored Westinghouse/Tesla’s patents and launched an AC electric business, knowing that GE had much deeper pockets (through JP Morgan) and Westinghouse lacked the resources to litigate. Westinghouse never recovered and GE prevailed in the marketplace.

To answer the question concerning the importance of patents, TCA Venture Group analyzed its 281 outcomes (Exits and Shutdowns) since being founded in 1997. While it is certainly possible to build a successful company without patents, the probability of an exit is higher with patents, and the probability increases with the number of patents in the portfolio. For TCA VG portfolio companies with more than 30 patents, the probability of an exit exceeded 80%:

Figure 1: Patents Increase Probability of Exits

Portfolios of over 51 patents also are much more likely to lead to an exit than to a shutdown – those large patent portfolios are in 13% of exits but only 3% of shutdowns. But the importance of patents goes beyond the likelihood of an exit. Turning to the magnitude of the exit in terms of the multiple on the amount invested, TCA VG’s experience shows a compelling relationship between larger portfolios of patents and the magnitude of the exit multiple:

Figure 2: Patent Portfolio Strength Drives Returns

Source: Pitchbook (for patent info) and Analysis of TCA Venture Group Exits and Shutdowns 1997-2023

This relationship between size of the patent portfolio and outcome multiples is consistent and compelling:

Figure 3: Larger Exit Multiples More Patent Intensive

Source: Pitchbook (for patent info) and Analysis of TCA Venture Group portfolio 1997-2023

Looking at this data the other way, a robust patent portfolio drives larger exit multiples:

Figure 4: Stronger Patent Portfolio Drives Larger Exit Multiples

Source: Pitchbook (for patent info) and Analysis of TCA Venture Group portfolio 1997-2023

The importance of patents as a means to drive higher exits is evident in TCA VG’s six largest exits – all of which had patents and four of the six had large patent portfolios:

Figure 5: TCA VG’s Best Exits All Had Patents

Source: Pitchbook (for patent info) and Analysis of TCA Venture Group portfolio 1997-2023

This all makes a lot of sense. The presence of a patent portfolio is a strong incentive for being acquired, and even in the case of a failing company is more likely to lead to some sale of the patents for at least some residual value (which is still an “Exit”). There may also be a relationship between healthy margins and free cash flow and the size of the patent portfolio, because companies with marginal financials may not be able to afford building a large patent portfolio; those healthy margins may be due to the barriers of patentable product differentiation, or it may be for other reasons.

Obviously, patents vary in importance across industry verticals, although there is not a direct correlation between patent intensity of an industry and the overall return TCA VG has realized in various industries. That overall return is driven by a few home runs (or lack thereof), so even a vertical industry light on patents such as financial services can have a high overall return of 24x because the big home run of Green Dot in prepaid credit cards beat out 17 other competitors through better execution instead of the strength of their one patent – and realized a 235x return! In Life Sciences (medical devices, pharma, medical diagnostics and digital health) exits are exceedingly rare without a healthy patent portfolio, In other industries such as consumer products, real estate and agriculture/food any lack of barriers to competition (in the form of patents) becomes a big factor in the low returns:

Figure 6: Patent Intensity by Vertical

Source: Pitchbook (for patent info) and Analysis of TCA Venture Group portfolio 1997-2023

Key Takeaways:

• All other things being equal, patents increase a likelihood of an exit, and the size of the patent portfolio tends to also lead to larger exits. While it is certainly possible to achieve an attractive exit without patents, the odds of doing so are less.

Author:

•     John Harbison, Chairman Emeritus of  TCA Venture Group (formerly Tech Coast Angels), ACA Board Member.

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Leaving behind the initial peak of inflated expectations while following the well-known Gartner hype cycle into its corresponding disillusionment phase in the last decade(s), we now see many agricultural robots and autonomous equipment steadily approaching reality. In 2020, Future Farming magazine published its first field and harvest robot buyers’ guide. The catalog lists the autonomous robots – not autonomous tractors – that farmers worldwide can buy, lease, or rent to help them produce crops outdoors. For the 2023 guide, the magazine reports 60 listed robots and 73% more robots in operation worldwide, showing significant growth in quantities across all categories of agricultural robots. Compared to the first year of publication, the last three years have seen the number of operational robots grow by nearly tenfold. This trend is pushed by the fast development of technology, first introduced by startup companies, bringing competitive and affordable state-of-the-art technologies to farmers utilizing smart sensors, advanced software and AI algorithms, increased processing power, and smart actuators. Secondly, the agricultural robot trend is pushed by the global and pressing challenges we see today in agricultural production, like human labor availability and costs, aging farmers, climate change, legislations and restrictions, and many more.

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1. Capacity Building: Providing technical assistance services and resources to assist with launching and developing scalable and investable businesses. 
2. Access to Capital: Providing technical assistance to apply for state SSBCI programs and/or other similar federal, state, or local government programs that promote American entrepreneurship and democratize access to startup capital across the country. Including the facilitation of investor meetings, pitches, demo days, crowdfunding, and other capital introduction events. 
3.  Access to Networks: Providing resources and introductions that help connect minority and other underserved entrepreneurs to a larger community of business mentors, coaches, service providers, subject matter experts, and peers who understand and address specific challenges, along with industry and investor networks. 

Upcoming Kick-off Meetings

Eager to get started, two of the HBCU’s and one of the MANRRS chapters have scheduled kick-off meetings in February.

As part of a team that also included AgLaunch, the two accelerator programs provided a daylong training session to the ten semi-finalist startup companies participating in the Challenge.  F3 Tech’s afternoon session highlighted best practices in the areas of commercialization and investment readiness.  The session also included a one-hour panel of investors who engaged with the semi-finalists, providing advice and answering questions about what investors are looking for in startup companies and what criteria influences their investment decisions.

In the coming year, F3 Tech will be working with the Maryland Farm Bureau to initiate a Maryland State version of the Challenge. The intent is to help inspire, motivate, and create a pipeline of prospective ag innovation applications from Maryland and establish a greater presence of Maryland startups in the national competition.

As an IT Wondrous Woman, Joyce Hunter brings a wealth of experience to her role as the Chair of the CyberAg Advisory Board. Not only is she a pivotal figure in the cybersecurity landscape, but she is also the Program Director for the SEDI (Socially and Economically Disadvantaged Individuals) program.

This program is designed to prepare minority and other underserved entrepreneurs for securing capital from various sources, including the State Small Business Credit Initiative (SSBCI). Notably, the initiative collaborates with students and faculty at Historically Black Colleges and Universities (HBCUs) and associated MANRRS chapters in the Maryland and Delaware areas. The program aims to support those pursuing the commercialization of innovations or technologies in the agricultural sector.

CyberAg

CyberAg was formed in 2019 to advocate for increased cybersecurity investment in the U.S. food supply chain after numerous attacks increased awareness of the vulnerability of the nation’s agricultural infrastructure.