Q1 VC Financings Fall Short As Early Deals, Mega-Rounds Dip Last-Minute $600m Push Didn’t Save Quarter
Evaluate data show that biopharma companies raising cash in the smallest and largest categories of venture capital financings struggled to meet bars set in prior quarters.
Venture capital financing for biopharmaceutical companies may be headed into another downturn, reversing a surge in start-up funding that occurred in 2024. New data from Evaluate show that only 109 drug development firms raised VC rounds in the first quarter of 2025, far below the quarterly average of 142 companies in 2024, with $6.49bn raised in Q1 of this year, versus the $7bn quarterly average last year.
And there was not just one category of biopharma companies that led the decline in VC financings. Among firms that raised rounds of $50m or less, the Q1 total was $0.75bn, while in 2024 that category had no quarterly totals below $1bn. At the high end, venture mega-rounds of $100m or more totaled $3.83bn in Q1, less than in any quarter last year and below the 2024 quarterly average of $4.26bn. Mid-sized VC financings between $50m and $100m totaled $1.91bn in Q1, above the 2024 average of $1.53bn.
The first quarter’s largest round – a supersized mega-round announced just in time to be included in the Q1 total – wasn’t enough to help the quarter pull ahead of last year’s averages. Isomorphic Labs, which has an artificial intelligence-based drug discovery platform backed by Google Ventures and Alphabet, revealed its $600m round on 31 March, described as the company’s first-ever external financing.
It may be difficult for investors to rally enthusiasm for risky early-stage biopharma start-ups when merger and acquisition activity was not especially robust in 2024 – a trend that seems to be continuing in 2025 as big pharma buyers focus on smaller acquisitions. Investor sentiment is also struggling as public biopharma stock valuations slump due to macroeconomic concerns, such as tariffs implemented by US President Donald Trump, and regulatory risks due to a potential slowdown in US Food and Drug Administration activity following staffing changes under the Trump Administration.
However, some venture capital investors have fresh capital to spend via new funds raised in 2025, including Sofinnova Partners, which announced a new €1.2bn ($1.26bn) fund in March.
Rounding out the top five largest venture capital financings in Q1, after Isomorphic’s first-place mega-round, Verdiva Bio announced a $410m series A round in January to fund its development of VRB-101, a Phase-II ready oral GLP-1 agonist for the treatment of obesity that may be dosed once weekly.
Coming in third, Eikon Therapeutics revealed a $350.7m series D round in February. The company, helmed by veteran Merck & Co. R&D executive Roger Perlmutter, has drug discovery and development programs in progress across oncology, neurology and immunology, but its clinical-stage assets aim to treat cancer.
Another set of drug discovery veterans, from cardiomyopathy treatment developer MyoKardia, launched fourth-place Q1 VC fundraiser Kardigan in January with $300m in series A funding to finance a portfolio of cardiovascular disease treatments.
Following a notch behind, Aviceda Therapeutics grabbed a fifth place spot in Q1 with its $207.5m series C round to fund its development of immunomodulators for chronic inflammation, including a late clinical-stage program in geographic atrophy secondary to age-related macular degeneration.
Company
Investment
Financing Round
Specialty
Isomorphic Labs
$600m
Series A
AI-based drug discovery
Verdiva Bio
$410m
Obesity drug development
Eikon Therapeutics
$350.7m
Series D
Cancer, immunology and neurology
Kardigan
$300m
Cardiovascular diseases
Aviceda Therapeutics
$207.5m
Series C
Chronic inflammation
