Navigating Biotech's New Reality: Capital is Tighter, Deals are Smaller, but Innovation is Still Moving Fast

This week’s headlines paint a clear picture of a biotech industry in transition—driven by capital scarcity, evolving deal structures, and continued scientific progress. From EY’s latest Biotech Beyond Borders report to Sangamo’s push for a partner in Fabry disease and new treatment options in EGFR-mutated lung cancer, the underlying message is consistent: commercial strategy and market access planning must now be smarter, leaner, and more adaptive than ever. For commercial leaders, it's no longer just about launch execution—it's about building sustainable value early, aligning with the right partners, and positioning for success in a landscape defined by precision, pressure, and potential.

EY Highlights Market Reset in Biotech – EY 2025 Biotech Beyond Borders Report: Biopharma — Focus on fundamentals to bounce back

According to the 2025 Biotech Beyond Borders report from EY, pharma and biotech are contending with significant market pressures—rising interest rates, inflation, policy and tariff uncertainty, and capital scarcity. While public biotech revenues grew by nearly 7% to $205.4 B in 2024, follow-on financing fell to its lowest level since 2016 (~$19.9 B), and approximately 39% of biotechs now have under a year of cash runway. M&A deal value also halved to $77B, pointing to a shift from mega-deals toward smaller, strategic partnerships, especially those leveraging AI.

As EY observes, this is a time for fundamentals and resilience: biotechs are being urged to optimize portfolios and operations, plan for multiple scenarios, and build tax-efficient, tariff-savvy supply chains. Companies that embrace capital discipline, leverage AI to boost efficiency, and demonstrate clear clinical and commercial value will be best positioned to thrive—and bounce back—when market conditions improve.

TruView: In today’s capital-constrained, investment-selective environment, industry leaders must treat capital as a scarce commodity and align strategy accordingly. Double down on demonstrating value early—use data-driven analytics to bolster your payer narratives and model long-term outcomes. With capital constraints, biotechs should scenario plan for smaller, partnership-driven commercial launches if necessary. Furthermore, building internal capabilities across multi-functional centers of excellence (commercial, access, AI/data) now will differentiate you when investor confidence returns.

Sangamo Advances Fabry Gene Therapy While Shopping for a Partner – Sangamo preps FDA application for Fabry gene therapy on heels of phase 1/2 registrational data

Sangamo Therapeutics shared encouraging Phase 1/2 STAAR trial results for its one-time gene therapy, isaralgagene civaparvovec (ST-920), treating Fabry disease—a rare condition affecting kidney function. In 32 patients, kidney function (measured by eGFR slope) improved over 52 weeks, and in 19 patients followed for two years, benefits persisted. All 18 patients previously on enzyme replacement therapy (ERT) halted it post-treatment. The FDA has confirmed the eGFR slope as an acceptable surrogate endpoint for accelerated approval, supporting Sangamo’s plan to submit a Biologics License Application as early as 2026. The therapy showed mild side effects, is well tolerated, and does not require pre-conditioning. Sangamo is now actively seeking a commercialization partner to support launch and accelerate timelines.

TruView: Sangamo’s move toward accelerated approval for its Fabry gene therapy highlights both opportunity and risk in today’s capital-constrained biotech environment. As detailed in EY’s 2025 Biotech Beyond Borders report, investor appetite has shifted toward capital efficiency and late-stage derisked assets—making early commercialization planning more critical than ever. With no internal commercial team, Sangamo’s ability to translate clinical success into market impact will depend heavily on securing the right partner. For emerging biotechs, this reinforces the importance of building early value strategies, pressure-testing payer assumptions, and engaging potential partners who bring not only capital, but deep market access expertise and proven launch execution in rare disease.

FDA Expands Treatment Options for EGFR-Mutated NSCLC - Datroway approved in the US for patients with previously treated advanced EGFR-mutated non-small cell lung cancer

The treatment landscape for EGFR-mutated non-small cell lung cancer (NSCLC) continues to evolve, with the FDA’s recent accelerated approval of Datroway (datopotamab deruxtecan-dlnk) marking a significant milestone. This first-in-class TROP2-directed antibody-drug conjugate is approved for adults with advanced EGFR-mutated NSCLC who have progressed after both an EGFR-directed therapy and platinum-based chemotherapy. In clinical studies, Datroway showed a confirmed objective response rate of 45% and a median duration of response of 6.4 months, alongside a manageable safety profile.

TruView: This approval reflects the growing importance of differentiated mechanisms of action and precision targeting in heavily treated NSCLC populations. For commercial and access teams, it’s a reminder to invest early in value strategy and payer messaging. Competitive differentiation will hinge on clearly articulating where a product fits in an increasingly crowded treatment landscape, and generating robust real-world data on patient subgroups with unmet needs. For new entrants, market success will depend not only on clinical efficacy but also on smart launch planning and innovation value differentiation.

As capital tightens and therapeutic innovation accelerates, biotech companies must treat commercialization as a strategic imperative—not a downstream event. Whether you’re scaling a single-asset company or refining a portfolio in a large pharma organization, success will hinge on your ability to define and defend value early, build cross-functional capabilities for a lean launch strategy, and form strategic alliances that maximize investment.

The headlines this week are more than news—they’re signals. The organizations that interpret them well and act decisively will shape the next phase of biopharma leadership. TruBio Consulting helps biotech and pharma teams translate market shifts into smart, strategic action.