The Evolving Landscape of Alternative and Non-Dilutive Financing | Life Sciences Snapshot – Q4 2025

A Quarterly Report on Financing Trends
10 minute read | October.17.2025

U.S. life sciences venture activity fell to its lowest level in a decade as deal flow continued to contract. Faster FDA review timelines supported approvals, but revived BIOSECURE Act scrutiny and ongoing supply chain pressures added friction. Early-stage risk appetite weakened further, shifting capital toward larger late-stage rounds and driving more startups to rely on grants and other nondilutive funding. Despite a steadier macro backdrop and potential rate cuts ahead, liquidity remains the key constraint, with exits and M&A activity still subdued.

This edition highlights quarterly investment trends and features a recap of Orrick's annual Life Sciences & HealthTech Alternative Financing Summit.

Key findings include:

Early-stage freeze, late-stage focus: Risk capital continues to retreat from seed and Series A deals, concentrating funding into fewer, larger rounds.
AI and platform momentum: Late-stage resilience centered on AI-enabled drug discovery, platform models, and device–therapeutic convergence.
Regulatory pressure mounts: The revived BIOSECURE Act and supply chain exposure are tightening compliance and diligence standards.
Liquidity squeeze persists: Sparse exit markets and slower M&A cycles are limiting returns and concentrating buyer activity around top-tier assets.

Read the report (10 minute read)