Biopharma executives expect partnering and mergers and acquisitions to increase over the next year, but investor risk aversion remains a major barrier to biotech funding.

Funding optimism meets investor caution

A survey of 81 senior biopharma executives, including 50 chief executives, found that 75% expect appetite for partnering and mergers and acquisitions (M&A) to increase over the next 12 months. None expected it to decline.

However, 79% identified investor risk aversion as the biggest constraint on biotech investment, highlighting the gap between expectations for dealmaking and the capital available to support companies.

Published by BIO-Europe, the Biopharma C-Suite Agenda Survey 2026 also found that 51% of respondents expected raising growth capital to be their most likely near-term activity, compared with 27% who selected strategic partnering or licensing.

Although 69% expected their company’s access to capital to improve, the findings suggest that securing investment remains a key concern.

Nisit Khandelwal, CEO of Cycuria Therapeutics, said: “The gap in early-stage innovation funding. Deal-making and investment volume are consolidated and skewed toward near-market-ready assets – but we all have to wake up to this: the investment we make in early pipeline today is the mid-stage pharma pipeline we’ll be scrambling for tomorrow.”

His comments point to a potential longer-term consequence of cautious investment: reduced funding for early-stage programmes could limit the supply of assets available for later-stage development and pharmaceutical partnerships.

US uncertainty puts Europe in the spotlight

More than half of respondents (52%) said uncertainty surrounding US policy and regulation had made Europe more attractive as a place to build companies and establish partnerships.

However, Europe received an average score of just 2.8 out of five as a partnering and dealmaking hub. The US and China were also expected to remain the leading sources of future partnerships, ahead of Europe.

The findings suggest that geopolitical uncertainty could create opportunities for European biotech, but that greater appeal does not necessarily translate into stronger competitiveness or increased investment.

The survey’s respondents included leaders from companies at preclinical, clinical-stage and commercial stages, with organisations headquartered across the UK, EU/EEA, Switzerland, the US, China and Asia-Pacific.

Oncology leads investment interest as AI expectations grow

Oncology and antibody-drug conjugates (ADCs) were the leading areas for expected partnering and investment in 2026–27. Immunology and inflammation, cardiometabolic disease beyond glucagon-like peptide-1 (GLP-1) medicines, and neuroscience also featured among the priorities.

Meanwhile, respondents identified healthy ageing, mental health and women’s health as commercial opportunities they believe remain underinvested.

Clinical data packages were identified as the factor pharma partners and investors scrutinise most closely when assessing potential opportunities, ahead of management strength, execution track record, regulatory and chemistry, manufacturing and controls readiness, or intellectual property position.

Artificial intelligence (AI) adoption was another focus. Respondents said its greatest impact to date had been in back-office and operational functions, followed by target identification and drug discovery.

Looking ahead, 57% expected AI to improve research and development productivity over the next 12–24 months, while 33% anticipated faster clinical development. However, 22% said AI’s impact was currently overstated.

The survey was published ahead of BIO-Europe 2026, which takes place in Cologne, Germany, from 9–11 November.