Life Sciences Snapshot: A Quarterly Report on Financing Trends, Q1 2026 (Orrick / PitchBook)

Summary

• US life sciences startups raised $8.6 billion across 377 deals in Q4 through December 22, bringing annual funding to $32.6 billion across 1,526 deals YTD.p.3
• Overall funding levels in 2025 surpassed those of the prior two years despite declining deal counts.p.2
• Only 85 US life sciences VC exits were completed in 2025 YTD, the lowest level in the past decade.p.4
• Exit momentum slowed further in Q4, with just 13 exits completed, down from over 20 in prior quarters.p.4
• Large pharmaceutical companies such as Astellas and Novartis addressed a $300B patent cliff looming over the next few years.p.8
• A joint reception during the J.P. Morgan HealthCare Conference on January 13th, 2026 attracted nearly 1,000 industry players.p.6

Key insights

1. Capital concentrated in fewer, higher-conviction investments, with a meaningful share of total capital flowing through financings worth $25 million or more.p.2
2. Aggregate capital invested has increased each year since 2023 even though deal volumes have declined since the 2021 peak.p.3
3. Capital has not been this concentrated in a selective number of transactions since 2021.p.3
4. Median and average Series D+ deal values reached levels comparable to those of 2021.p.4
5. Exit conditions remained a clear constraint, with liquidity opportunities deteriorating further in the second half of 2025.p.2
6. Denis Barrier said companies are deploying AI as core infrastructure, with 2026 likely to mark a turning point in AI-driven transformation of healthcare.p.7
7. Tony Chan described the post-JPM mood as disciplined optimism, not a return to 2020–2021 behavior.p.8