Juan Carlos Lopez

Andy Marshall

In our past issue, we took a look at all the financing deals that The Needle has covered since our inaugural issue. This week we turn our attention to last year’s deal making in the preclinical biotech space.

In 2025, preclinical dealmaking didn’t just slow — it polarized. Capital clustered around AI-enabled discovery, China-sourced assets, and in vivo CAR-T cell therapies, while entire therapeutic categories effectively disappeared from licensing activity. Based on the 131 publicly disclosed preclinical transactions in our sample, we reveal where early-stage risk capital is still flowing — and where it has quietly retreated.

Similar to the data we reported in our past newsletter, our analysis captures only publicly disclosed deals (partnerships, research collaborations, licenses, joint ventures, reverse mergers, equity investments and options) on business wires, industry news sites, and venture-fund sources. In the preclinical space, many deals are carried out in stealth, and companies in some important regions (like China) don’t use business wires or news sources traditionally available in the West. For these reasons, our estimates underestimate the true level of early-stage preclinical dealmaking.

In total, we tracked 131 preclinical deals over the year, of which 42 were licensing deals, 64 were strategic partnerships/collaborations and 14 were mergers and acquisitions (M&As). In keeping with early stage’s exploratory nature, the importance of stealth, and the non-compensatory nature of much of the work done, over half of the publicly announced strategic partnerships (35 deals; 55%) had no terms disclosed. As one would expect, a smaller proportion of the licensing deals failed to provide terms, but even for this category, 8 of the 48 transactions (17%) didn’t give financial details. Four of the 14 M&As that we tracked also made no mention of deal terms.

US-headquartered companies continue to dominate the dealmaking landscape, whether it is research collaborations, licensing or trade sales. One reason for the dominance of companies in the US — and the UK, which is second in deal activity — is likely simple math; a greater number of companies are financed and built in these countries compared with the rest of the globe (see The Needle Issue #22).

Strategic partnerships in 2025 favored platforms over products — and Western biotechs over Asian peers.

The 64 strategic partnerships we tracked had upfront payments that ranged from $5 million to $110 million, but the median ($35.5 million) underscores how concentrated value remains in a handful of outlier platform deals.

US companies accounted for 37 of the 64 deals (58%). Three notable partnering big-ticket deals involved biotechs splashing out large sums on preclinical collaborations, with the payers showing interest in branching out into new therapeutic modalities: last May, CRISPR Therapeutics (San Diego, CA) pivoted from gene editing to siRNA, paying $95 million to Sirius Therapeutics (Shanghai, China) to co-develop a long-acting siRNA designed to selectively inhibit Factor XI for thrombosis; in December, Regeneron Pharmaceuticals (Tarrytown, NY) spent $150 million (and made an equity investment) to jointly develop Tessera Therapeutics’ (Somerville, MA) target-primed reverse transcription therapy (TSRA-196), which uses lipid nanoparticles (LNPs) to deliver RNAs encoding an engineered reverse transcriptase (‘gene writer’), writer-recognition motifs, and a SERPINA1 template to correct a mutation in alpha 1 antitrypsin deficiency; and later the same month, peptide developer Zealand Pharma (Søborg, Denmark) announced a transaction with OTR Therapeutics (Shanghai, China), paying $20 million upfront for small-molecule programs centered around validated targets of Zealand’s franchise in cardio-metabolic disease.

For obvious reasons, target discovery and drug screening comprise about a third of collaborations and partnership agreements, but do not figure much in licensing and M&A. Mentions of machine learning in partnering deals (18.2% of 2025’s deals, with several in the top 10 grossing set) suggest large-language and other models are an increasingly established facet of preclinical development. Neurodegenerative disorders garnered the second largest number of partnering transactions in our 2025 sample. And, with all the noise around GLP-1s and other incretins, metabolic disease and obesity were the focus of 11% of deals.

Perhaps the most counterintuitive finding in the partnership data is the near-total absence of China-headquartered companies — despite their dominance in preclinical licensing. This may reflect geopolitical friction, IP risk tolerance or a Western preference for control in collaborations. Alternatively, the absence may reflect the limitations of Haystack’s methodology for collecting data. Certainly, the partnership data contrasts starkly with our licensing data, which show Chinese assets performing so well that they are biting at the heels of US companies and running far ahead of UK companies. In contrast, for strategic partnerships, it was UK-, and South Korea-based firms that were most prominent behind the US (15%, and 7% of dealmaking, respectively).

For licensing, the shift to Asia seen in later parts of the biotech pipeline is also manifest in the preclinical space.

Chinese companies were involved in nearly a quarter of all the licensing deals made last year, clinching 11 out of the 48 deals we tracked. This interest in early-stage Chinese assets mirrors last year’s banner deals for later-stage assets, such as Pfizer’s ex-China rights acquisition of 3SBio’s (Shenyang, China) PD-1 x VEGF bispecific antibody for $1.25 billion, or GSK’s $1.10 billion acquisition of Jiangsu Hengrui’s (Lianyungang, China) phosphodiesterase 3/4 inhibitor and oncology portfolio. Overall, deals seeking access to assets from Asian biotechs (companies based in China, South Korea, Singapore and Taiwan) comprised 33% of all preclinical licensing transactions in our sample.

Looking at the preclinical licensing as a whole, upfront amounts ranged from $0.7 million to $700 million, with a median value of $35 million. Most deals centered around cancer, followed by autoimmune, neurodegenerative and metabolic diseases.

What was perhaps most surprising is that we didn’t see any licenses for preclinical assets in the cardiovascular space, suggesting that the interest of a few years ago has somewhat diminished (although assets for heart disease still made up 4% of partnering agreements). Notably absent from preclinical licensing in 2025: cardiovascular, pulmonary, skeletomuscular, hepatic, pain, psychiatry, women’s health, sleep, hearing, and stroke. This pattern perhaps reinforces the industry’s retrenchment toward genetically anchored, biologically de-risked indications. Together, these licensing gaps underscore a 10-year low in early-stage risk appetite outside traditional blockbuster categories.

The top 10 licensing deals from last year are listed in the Table below. Of this elite tier of top-grossing deals, cancer and autoimmune comprised the lion’s share (70%), with neurodegenerative, neurodevelopmental, metabolic, and ophthalmic disease all represented. Only two of the top 10 deals involved traditional small molecules (with one additional license for a molecular glue), whereas biologics accounted for seven. While small molecules still comprise the biggest chunk of licensing activity (18.9%), deals trended toward bispecific and multispecific antibodies for cancer immunology and autoimmune indications — and biopharma was prepared to pay: Of the 8 licensing transactions for multispecifics in our sample, IGI Therapeutics’ (New York, NY) deal with Abbvie, and CDR Life’s (Zurich, Switzerland) agreement with Boehringer Ingelheim, ended among the top 10 grossing deals of the year.

Which leads us to mergers. Overall, we tracked 14 M&A deals last year in the preclinical space. According to Dealforma data presented at JP Morgan, private biopharma accounted for just over 55% of merger activity in 2025 on par with previous years. In the Haystack data, 12 of the 14 acquisitions for preclinical programs were for US-based private companies, reinforcing the historical trend of American biotechs outperforming those in the rest of the world in terms of negotiating successful exits for their investors.

The biggest story in early-stage mergers from last year, though, was biopharma’s ravenous appetite for in vivo CAR-T cell therapy, with Capstan, Orbital and Interius comprising 3 of the 14 acquisitions recorded by Haystack, all of which ranked among the top 5 highest upfront payments. As our sampling commenced in April 2025, we missed another deal: AstraZeneca’s acquisition of lentiviral in vivo CAR-T therapy developer Esobiotec, originally announced in March 2025 with an upfront of $425 million. All in all, in vivo CAR-T therapies claimed 4 of the top 5 acquisitions last year.

The use of lipid nanoparticles (LNPs) in many of these in vivo CAR-T platforms (Orbital, Aera Therapeutics, Stylus Medicine, MagicRNA, Orna Therapeutics, Byterna Therapeutics and Strand Therapeutics) and elsewhere (Tessera, Starna Therapeutics, Nanovation Therapeutics, United Immunity, Genevant Sciences, Pantherna Therapeutics, eTheRNA Immunotherapies, and Beam Therapeutics) also underlies a continuing theme of investment and dealmaking around drug delivery platforms.

Apart from LNPs, several drug delivery deals also centered around antibody shuttles that can take biologics and siRNAs across the blood–brain barrier into the CNS. These included Manifold Bio/Roche, Vect-Horus/Secarna, Ophidion/Neuronasal, JCR/Acumen and Denali/Royalty Pharma. This year will see more of these shuttles enter clinical testing, with Alector’s transferrin shuttle AL137, a subcutaneous anti-amyloid beta antibody, slated for an IND submission.

In sum, the preclinical dealscape in 2025 reveals an industry willing to fund innovation — but only when paired with platform leverage, delivery, or late-stage optionality. As Haystack tracks dealmaking through 2026, the key question will not be whether capital returns to early-stage biotech, but whether it broadens beyond today’s narrow set of ‘acceptable’ risks. We look forward to tracking deals throughout 2026 and identifying new emerging trends in biotech deals.