The Twelve Deals of Christmas

The Twelve Deals of Christmas

Biotech's 2025 was a year of contradictions. Venture funding collapsed to 2012 levels while the XBI climbed 37%. Startup formation cratered 70% while Big Pharma wrote $20+ billion in M&A checks. The IPO window stayed shut while royalty financing grew at 45% annually. A fifth of public biotechs traded below cash—and became acquisition targets.

So what did the industry actually get this year? Here's the full haul, sung to the tune you already know.

On the twelfth deal of Christmas, the market gave to me:

Twelve months of runway, Eleven boards capitulating, Ten biotechs below cash, Nine royalty closings, Eight percent cap-weighted, Seven tuck-in takeouts, Six bridge extensions, FIVE DOWN ROUNDS, Four VC funds, Three ETF rallies, Two mega-mergers, And a thaw in the nuclear winter.

The annotations, for those keeping score:

Twelve months of runway — The new definition of success. If you entered December with a year of cash, you outperformed.

Eleven boards capitulating — The tuck-in M&A wave that swept through sub-$500M market cap biotechs. Vigil, Regulus, Inozyme—names that quietly accepted pharma lifelines rather than face another financing.

Ten biotechs below cash — Actually 22%, or roughly 80 companies. The highest share in nine years. Cheaper to buy than to fund.

Nine royalty closings — At least nine major royalty and structured finance deals closed in H1 alone, raising over $3.4 billion. Revolution Medicines' $2B deal led the pack.

Eight percent cap-weighted — IBB's concentration limits. The ETF ended the year 2% off all-time highs, proving that large-cap biotech survived the winter.

Seven tuck-in takeouts — The quiet M&A wave. No headline-grabbing megadeals, just pharma quietly hoovering up distressed assets at sensible premiums.

Six bridge extensions — The financing structure of the year. Not a real round, not quite a death spiral. Just enough to reach the next catalyst.

Five down rounds — Conservative estimate. The actual number is unknowable, buried in opaque private market data. But everyone knows someone who took one.

Four VC funds — The number of biotech-focused venture funds that closed in Q1 2025. Down from 300+ at the 2021 peak.

Three ETF rallies — XBI +37%. ARKG +43%. IBB +30%. All crushing the S&P. The generalists who fled in 2022 missed the rebound.

Two mega-mergers — J&J's $14.6B takeout of Intra-Cellular. Sanofi's $9.5B acquisition of Blueprint Medicines. Proof that pharma's $176B patent cliff is concentrating minds.

And a thaw in the nuclear winter — The narrative that defined 2022–2024 is losing conviction. Fund flows turned positive. M&A accelerated. The "haves" doubled in value. Whether it's a real recovery or a bear market rally remains to be seen—but for the first time in years, biotech's stocking isn't empty.

Merry Christmas. Here's to 2026: more shots on goal, fewer bridge rounds, and readouts that hold up past the press release. 🎄