STATE OF LIFE SCIENCES IN THE U.S. With a focus on California, Texas, New York and Massachusetts
January – June 2026
Contents Guiding Innovation From Lab to Market......................................................... 3 Executive Summary............................................................................................. 4 Policy & Regulatory Developments................................................................. 7 Innovation (Patents)............................................................................................. 9 Clinical Trials.........................................................................................................14 Private Capital......................................................................................................19 Mergers & Acquisitions.................................................................................... 25 Public Markets......................................................................................................31 Real Estate...........................................................................................................32 Hot Topic..............................................................................................................33
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Weaver Brings Audit, Tax and Advisory Professionals Together to Support These Demands at Every Life Science Stage Anna Stevens, CPA, FHFMA, CHFP
Tyler Ridley, CPA
Walt Brasch, CPA
Katy Foraker, CPA
Partner-in-Charge Health Care Industry Services O: 832-320-3494 anna.stevens@weaver.com
Partner Advisory-Valuation Services O: 512-609-1993 tyler.ridley@weaver.com
Partner Audit-Commercial O: 310-382-5389 Walt.brasch@weaver.com
Director Tax Credits and Property Incentives O: 240-200-1404 katy.foraker@weaver.com
STATE OF LIFE SCIENCES IN THE U.S. | 3
Executive Summary Our review of the U.S. life sciences sector in the first half (H1) of 2026 reveals a central theme: capital is concentrating. Fewer companies are raising money, fewer trials are starting and fewer patents are being filed, while total dollars invested, deal value and public market capitalization are rising. The industry is not shrinking; it is narrowing, with capital increasingly favoring later-stage programs with differentiated clinical data as earlier-stage ventures face a more selective funding environment. In this report, we examine that dynamic across California, Texas, New York and Massachusetts, which together host approximately 50% of U.S. interventional clinical trials, 88% of public life sciences companies and more than 75% of venture capital deployed in the sector. Each state occupies a distinct position in the innovation lifecycle, and their differing trajectories in H1 2026 highlight some of the structural forces reshaping the industry.
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Innovation Patterns are Shifting Patent publications declined 4.1% nationally, but the contraction is concentrated in traditional pharmaceutical chemistry. Biotechnology and genetic engineering patents surged nearly 20%, reflecting the industry’s pivot toward biological modalities — gene therapy, cell therapy and antibody platforms. California held flat while Massachusetts and Texas contracted, and the corporate-academic split widened: corporate patent filings declined 7.2% nationally while academic output held steady, suggesting that funding conditions may be contributing more to the slowdown than underlying scientific activity.
Clinical Trials are Bifurcating by Stage National trial starts grew modestly (+1.3% YoY), but all four major states contracted, meaning trial activity is dispersing into secondary markets. Phase 2 and later-stage trials drove the growth while Phase 1 stagnated, consistent with venture capital flowing to companies that already have clinical data. Massachusetts showed the steepest decline (-15.4% YoY), a 16.7 percentage-point gap from the national rate and the widest of any state analyzed. Texas and New York showed contrasting ecosystem roles: Texas hosts trials for other companies’ drugs (23% sponsor-to-site ratio) while New York originates nearly half its own (46%).
Private Capital is Flowing to Fewer, Larger Deals Venture deal count fell 18.2% nationally while capital deployed surged 23.8%: average deal size increased roughly 50% YoY. Pre-seed funding declined 43.6%, a leading indicator that could constrain pipeline formation over the next two to three years. Series B was the dominant growth driver across both biopharma (+55.8% deal count) and all four states. Massachusetts showed the most resilient fundraising (-9.9% deal count) despite the weakest clinical and patent performance, a divergence that may reflect a timing lag between capital deployment and clinical activity.
STATE OF LIFE SCIENCES IN THE U.S. | 5
M&A Value is Surging on Mega-Deal Concentration Disclosed M&A value more than doubled to $247.2 billion, driven by 22 deals over $2.5 billion (up from nine in the prior period). Q2 2026 alone produced $102.4 billion, the single largest quarter on record. However, the headline deal values do not necessarily reflect realized consideration: 73% of recent bio/pharma deals include earnout provisions, and only 9.5% of $95.1 billion in aggregate earnout potential has actually been paid. The gap between announced deal value and realized consideration has significant implications for purchase price accounting, contingent consideration measurement and post-closing financial reporting.
Public Markets are Reopening The XBI Biotech ETF rose 30.2% through June, outperforming the S&P 500 by more than threeto-one. Biopharma IPOs raised $5 billion across 13 offerings, already exceeding full-year totals from 2022 through 2025, with record-setting debuts from Kailera Therapeutics ($625 million) and Parabilis Medicines ($670 million). The SEC’s proposed compliance reforms — potentially raising the large accelerated filer threshold from $700 million to $2 billion — and the launch of the Texas Stock Exchange add structural tailwinds for smaller public companies.
Each State Tells a Different Story California’s innovation activity is shifting from traditional pharmaceutical development toward biotech modalities, while its venture market increasingly favors larger, later-stage deals. Texas, meanwhile, shows signs of transitioning from a clinical execution hub toward an innovation originator: sponsor trial starts increased while patent output and venture funding contracted, suggesting the state may be commercializing existing IP faster than it is generating new discoveries. New York’s pharma headquarters and academic medical centers are advancing late-stage programs while its venture market lags its innovation output. Massachusetts faces the sharpest near-term headwinds, even as its companies continue to attract acquirers willing to pay premiums.
The sections that follow examine each of these dynamics across patents, clinical trials, private capital, M&A, public markets, real estate and policy, with comparison across the four states and nationally.
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Policy and Regulatory Developments The U.S. life sciences sector entered H1 2026 with policy priorities increasingly focused on supply chain resilience, biosecurity, AI governance and regulatory compliance.
Section 232 Pharmaceutical Tariffs The April 2026 Section 232 action imposed a 100% tariff on patented pharmaceuticals and associated ingredients, while generic drugs, biosimilars and orphan drugs remain exempt. Companies with qualifying onshoring and pricing arrangements may receive reduced or zero tariff treatment, and preferential country-specific rates apply to the EU, Japan, South Korea, Switzerland/Liechtenstein and the UK. For life sciences companies operating in the four focus states, the tariff structure may affect decisions around domestic manufacturing. California and Massachusetts companies that have established contract manufacturing relationships in Asia may face the most immediate supply chain exposure, while Texas’ growing biomanufacturing base may benefit from reshoring incentives.
BIOSECURE Act Signed into law, the act restricts federal procurement and grant funding involving biotechnology equipment or services from designated “biotechnology companies of concern” (BCCs). OMB is expected to publish the BCC list by December 2026 with implementation through subsequent guidance. Companies that rely on China-based contract research or manufacturing organizations, particularly those in Cambridge and Bay Area biotech ecosystems, should assess their supply chain relationships as implementation moves forward. The act also intersects with the broader trend of China-origin asset licensing reflected in M&A deal data, as large pharmaceutical companies increasingly license Chinese-developed compounds.
FDA-EMA Joint AI Principles FDA and EMA jointly identified 10 principles for AI in drug and biologic development, covering human-centric design, risk-based assessment, data governance and lifecycle management. While not yet binding regulation, the principles signal movement toward a more formal framework, particularly relevant for companies in California and Massachusetts, where AI-driven drug discovery platforms represent a growing share of venture investment and patent activity.
STATE OF LIFE SCIENCES IN THE U.S. | 7
The National Institutes of Health (NIH) Funding Enacted FY2026 NIH program funding of $48 billion is modestly above FY2025 levels. The FY2026 budget request had proposed substantially lower funding and restructuring that were not incorporated into enacted appropriations. NIH’s strategy emphasizes chronic disease priorities, AI, alternative testing models, real-world data platforms and stronger oversight of foreign research. Funding stability is particularly relevant for Massachusetts and California, where academic institutions that generate significant patent output and clinical trial activity, including Boston Children’s, Dana-Farber, Stanford and UCSF, depend heavily on NIH grant support. Continued academic patent growth (+8.3% YoY in Massachusetts and +3.5% in California) may in part reflect this sustained federal research funding even as corporate R&D investment contracts.
SEC Compliance Reform The XBI Biotech ETF rose 30.2% through June, outperforming the S&P 500 by more than three-to-one. Biopharma IPOs raised $5 billion across 13 offerings, already exceeding fullyear totals from 2022 through 2025, with record-setting debuts from Kailera Therapeutics ($625 million) and Parabilis Medicines ($670 million). The SEC’s proposed compliance reforms — potentially raising the large accelerated filer threshold from $700 million to $2 billion — and the launch of the Texas Stock Exchange add structural tailwinds for smaller public companies.
STATE OF LIFE SCIENCES IN THE U.S. | 8
Innovation (patents) National proxy, California, Texas, New York and Massachusetts Patent publications (TTM) declined to 3,079 (-4.1% YoY, -1.8% QoQ), with pharmaceuticals/ drug development — the largest category at 45% of all patents — declining 11.5% YoY. Biotechnology/genetic engineering was the sole growth category, increasing 19.9% YoY to 578 publications and representing 19% of the total, up from 15% a year ago.
Corporate patents declined across the proxy (-7.2% YoY) while academic patents remained relatively flat (-1.4% YoY), suggesting the slowdown in patent activity is concentrated in commercial R&D rather than institutional research. California accounted for 1,455 patents (47%), followed by Massachusetts at 993 (32%), New York at 422 (14%) and Texas at 209 (7%). The shift from pharmaceuticals toward biotechnology/genetic engineering may reflect a broader change in life sciences R&D as gene therapy, cell therapy and antibody engineering mature from experimental modalities into clinical programs. Patent activity appears to be shifting from traditional small-molecule chemistry toward biological and genetic approaches, although the magnitude varies considerably by state. Published Patents by Technological Family (TTM) Other Life Sciences
2025 Q2
Vaccines/ Immunotherapy
2025 Q3
Diagnostics
2025 Q4
Biotechnology/ Genetic Engineering
2026 Q1
Medical Devices
2026 Q2 0
1,000
2,000
3,000
4,000
Pharmaceuticals/ Drug Development
Patents by Assignee Type (TTM) 4,000 928
3,000 2,000
938
919
909
906
2,235
2,210
2,111
2,164
Corporate
2,051
Academic
1,000 Other
0 2025 Q2
2025 Q3
2025 Q4
2026 Q1
2026 Q2
STATE OF LIFE SCIENCES IN THE U.S. | 9
California Patent publications (TTM) remained nearly flat at 1,455 (-0.3% YoY, -2.1% QoQ), the strongest performance among the four states. Biotechnology/genetic engineering increased 26.4% YoY to 287 publications, offsetting declines in pharmaceuticals (-8.7% YoY) and medical devices (-11.5% YoY). Corporate assignees declined modestly to 1,132 (-3.0% YoY) while academic assignees grew to 269 (+3.5% YoY). The University of California System leads all assignees, followed by Amgen, Genentech (Roche), Stanford University and ImmunityBio — a mix of large-cap pharmaceutical companies and major research institutions.
California outperformed the national proxy (-4.1% YoY) and had the highest corporate assignee share of any state at 78% compared with 57% in New York, 35% in Texas and 63% in Massachusetts. Its biotechnology/ genetic engineering growth (+26.4% YoY) also led the four states, consistent with the concentration of gene therapy, antibody and cell therapy platforms in the Bay Area and San Diego. California’s relatively stable total patent output, combined with the shift among categories, suggest its innovation activity is changing rather than broadly contracting, with greater emphasis on biological and genetic modalities. Published Patents by Technological Family (TTM) Other Life Sciences
2025 Q2
Vaccines/ Immunotherapy
2025 Q3
Diagnostics
2025 Q4
Biotechnology/ Genetic Engineering
2026 Q1
Medical Devices
2026 Q2 0
500
1,000
1,500
2,000
Pharmaceuticals/ Drug Development
Patents by Assignee Type (TTM) 2,000 1,500 1,000
260 1,167
264
269
1,221
1,213
264
Corporate
269
1,171
1,132
Academic
500 Other
0 2025 Q2
2025 Q3
2025 Q4
2026 Q1
2026 Q2
STATE OF LIFE SCIENCES IN THE U.S. | 10
Texas Patent publications (TTM) declined to 209 (-20.2% YoY, flat QoQ), the steepest annual decline among the four states. Pharmaceuticals declined 27.9% YoY, while vaccines/immunotherapy declined 33.3%. Medical devices and diagnostics each increased 50% YoY, although both grew from relatively small bases of nine and 12 patents respectively.
Academic assignees declined to 131 (-25.6% YoY) while corporate assignees fell to 74 (-11.9% YoY). The top assignees are predominantly academic: the University of Texas System leads by a wide margin, followed by Houston Methodist, Texas A&M and University of Houston, with limited corporate representation beyond the top five. Published Patents by Technological Family (TTM) Other Life Sciences
2025 Q2
Vaccines/ Immunotherapy
2025 Q3
Diagnostics
2025 Q4
Biotechnology/ Genetic Engineering
2026 Q1
Medical Devices
2026 Q2 0
100
200
300
Pharmaceuticals/ Drug Development
Patents by Assignee Type (TTM) 300 176 162
200
148
131
138
Corporate Academic
100 84
83
74
67
72
Other
0 2025 Q2
2025 Q3
2025 Q4
2026 Q1
2026 Q2
STATE OF LIFE SCIENCES IN THE U.S. | 11
New York Patent publications (TTM) remained essentially flat at 422 (+0.2% YoY, -3.4% QoQ), making New York the only state with annual growth. Biotechnology/genetic engineering increased 31.6% YoY to 75 publications, and vaccines/ immunotherapy grew 7.7% YoY, while pharmaceuticals declined 8.3%. Corporate assignees held steady at 239 (-2.0% YoY) while academic declined modestly to 142 (-3.4% YoY). Memorial Sloan Kettering leads all assignees, followed by Regeneron Pharmaceuticals, Pfizer, SUNY Research Foundation and Columbia University — reflecting New York’s concentration of academic medical center research alongside pharma headquarters.
New York’s flat performance (+0.2% YoY) outperformed the national proxy (-4.1%) and was second only to California. Its biotechnology/genetic engineering growth (+31.6% YoY) is the highest of any state. New York’s assignee mix (57% corporate, 34% academic) sits between California’s corporate dominance and Texas’ academic dependence, with MSK reflecting the role of academic medical centers in both research and clinical-stage development. New York’s patent stability, combined with its strong sponsor-side clinical trial growth (+9.6% QoQ), suggests a relatively balanced innovation-to-commercialization profile, with new IP generation occurring alongside clinical development. Its academic medical centers and pharmaceutical headquarters may both contribute to that dynamic. Published Patents by Technological Family (TTM) Other Life Sciences
2025 Q2
Vaccines/ Immunotherapy
2025 Q3
Diagnostics
2025 Q4
Biotechnology/ Genetic Engineering
2026 Q1
Medical Devices
2026 Q2 0
100
200
300
162
155
400
500
Pharmaceuticals/ Drug Development
Patents by Assignee Type (TTM) 500 400
147
142
153
300 200
Corporate 244
242
238
231
239
Academic
100
Other
0 2025 Q2
2025 Q3
2025 Q4
2026 Q1
2026 Q2
STATE OF LIFE SCIENCES IN THE U.S. | 12
Massachusetts Patent publications (TTM) declined to 993 (-6.9% YoY, -0.9% QoQ), with pharmaceuticals down 12.1% YoY, diagnostics -18.2% YoY, and medical devices -14.7%. Biotechnology/genetic engineering was the sole growth category, increasing 14.3% YoY, rising to 192 publications. Corporate assignees declined to 606 (-15.2% YoY), the steepest corporate decline among the four states, while academic assignees increased to 364 (+8.3% YoY). The top assignees are predominantly academic: Massachusetts General Hospital, Dana-Farber, Harvard and Boston Children’s Hospital occupy the top four positions, with Foundation Medicine (Roche) the leading corporate filer at fifth.
Massachusetts’ decline (-6.9% YoY) was steeper than California (-0.3%) and the national proxy (-4.1%) but considerably milder than Texas (-20.2%). It was the only one where academic patent output increased (+8.3% YoY) while corporate output contracted sharply (-15.2%). Massachusetts remained the second-largest patent state, with 993 TTM publications — more than double New York’s total and nearly five times Texas’. The growing gap between Massachusetts’ academic and corporate patent output may reflect differences in funding sources. Academic institutions supported by NIH grants and endowments continued generating IP, while biotech companies faced a more selective private funding environment. This pattern is also consistent with the clinical trial data: Massachusetts sites contracted 15.4% YoY while sponsor activity became more concentrated in Phase 2 programs. Published Patents by Technological Family (TTM) Other Life Sciences
2025 Q2
Vaccines/ Immunotherapy
2025 Q3
Diagnostics
2025 Q4
Biotechnology/ Genetic Engineering
2026 Q1
Medical Devices
2026 Q2 0
250
500
750
1,000
352
364
631
606
1,250
Pharmaceuticals/ Drug Development
Patents by Assignee Type (TTM) 1,250 1,000 750
336
349
715
359
Corporate
700
641
500
Academic
250
Other
0 2025 Q2
2025 Q3
2025 Q4
2026 Q1
2026 Q2
STATE OF LIFE SCIENCES IN THE U.S. | 13
Clinical Trials
Clinical Trials Started in U.S. (TTM) 9,000
1,500 7,973
National Trial starts (TTM) edged up to 7,973 (+1.3% YoY, +2.5% QoQ), stabilizing after two quarters of contraction. Growth was concentrated in Phase 2 (+4.2% QoQ), Phase 4 (+15.4% YoY) and device (+12.2% YoY), while Phase 1 remained relatively flat (-1.2% YoY). Completions (TTM) remained robust year over year (+14.0%) but declined sequentially (-5.7% QoQ).
6,000
1237
1,000
1153
1006
604
3,000
500
2025 Q4
389
2026 Q1
0
0 All Trials
Phase 1
Phase 2
Phase 3
Phase 4
Device
2026 Q2
Clinical Trials Completed in U.S. (TTM) 9,000
6,000
1,500
5,878
1,000
924 838 606
3,000
500
471
2025 Q4
264
0
0 All Trials
Phase 1
Phase 2
Phase 3
Phase 4
2025 Q3
Device
2026 Q1
All four major states contracted while the national total grew, suggesting trial activity is dispersing into secondary markets. Massachusetts (-15.4% YoY) diverged most sharply from the national trend, followed by New York (-9.0%), Texas (-7.9%) and California (-6.2%). These four states host at least one site for approximately 50% of all U.S. interventional trials. The national pipeline is increasingly weighted toward later-stage programs, while early-stage activity remains constrained. At the same time, the completion backlog from 2022 through 2024 continues to mature, most visibly in Texas (+17.6% YoY completions) and New York (+14.0%).
STATE OF LIFE SCIENCES IN THE U.S. | 14
California Trial starts (TTM) at California sites declined to 1,968 (-6.2% YoY, -3.0% QoQ). Phase 2 increased slightly (+0.9% QoQ) while Phase 1 (-6.5% QoQ) and Phase 3 (-12.8% YoY) declined. Phase 4 surged (+31.1% YoY). Completions declined to 1,622 (-6.9% QoQ, +8.1% YoY). California’s site activity declined 6.2% YoY, compared with 1.3% growth nationally, but the decline was the smallest among the four states. California remains the largest market, accounting for approximately 25% of U.S. trial starts — nearly twice the share of second-place Texas. California-sponsored trial starts increased to 731 (+3.4% YoY, +6.1% QoQ), led by growth in Phase 2 (+23.3% QoQ) and device (+33.3% YoY). Phase 3 sponsor activity declined to 32 (-38.5% YoY). Completions remained relatively unchanged at 429 (+0.9% YoY).
As investors place greater emphasis on proof-of-concept clinical data, California’s biotech ecosystem appears to be responding accordingly: Phase 2 sponsor starts showed the strongest growth of any phase in any state, while Phase 1 and Phase 3 both declined.
California’s sponsor activity increased while site activity declined, a divergence unique among the four states. California’s 37% sponsor-to-site ratio falls between New York’s 46% and Texas’ 23%, reflecting differences in the balance between trial origination and execution across the three states.
Clinical Trials Started in California (TTM)
Clinical Trials Started in California (TTM) 3,000 2,000
2026 Q1
2026 Q2
600 1,968
All Trials
442
400 200
1,000 0
2025 Q4
0
80
Phase 2
Phase 3
Phase 4
Device
Clinical Trials Completed in California (TTM) 2,000 1,500
1,622
200
500 0
All Trials
2025 Q4
2026 Q1
600
0
382 249
105
106 88
All Trials
0
Phase 1
Phase 2
Clinical Trials Completed in California (TTM) 80
600 429
72
60
32
34
Phase 3
Phase 4
2025 Q3
Device
2025 Q4
2026 Q1
62
40
200 0
400
1,000
2025 Q3
2026 Q2
150
50
200
400
2026 Q1
100
400
380 221
731
600
0
258
Phase 1
800
2025 Q4
36
38
25
20 All Trials
0
Phase 1
Phase 2
Phase 3
Phase 4
Device
361 126 58
Phase 1
Phase 2
Phase 3
Phase 4
Device
STATE OF LIFE SCIENCES IN THE U.S. | 15
Texas Trial starts (TTM) at Texas sites declined to 1,659 (-7.9% YoY, -1.1% QoQ), with declines in Phase 1 (-10.1% YoY), Phase 2 (-10.7% YoY) and Phase 3 (-12.1% YoY). Phase 4 grew sequentially (+18.2% QoQ). Completions rose 17.7% to 1,434 but declined 4.9% quarter over quarter. Texas’ site decline (-7.9% YoY) was the third steepest among the four major states, 9.2 percentage points below national growth of 1.3%. However, Texas posted the strongest completion growth of the four states (+17.6% YoY), consistent with the maturation of its historical trial pipeline. Texas participated in 21% of U.S. trial starts, second only to California. Texas-sponsored trial starts increased to 377 (+9.3% YoY, +14.6% QoQ), led by Phase 1 (+28.1% YoY) and device (+52.4% YoY). Phase 3 sponsor activity remained limited at 3 starts. Completions were nearly flat at 238 (-0.8%). Texas posted the strongest quarterly sponsor growth of the four states (+14.6% QoQ) while site activity declined 7.9% YoY. Texas also had the lowest sponsorto-site ratio of the four states, at 23%. Nearly four in five trials in Texas sites are sponsored by companies headquartered elsewhere, increasing the state’s exposure to changes to out-of-state trial budgets. Clinical Trials Started in Texas (TTM) 2,000 1,500
1,659
394
All Trials
2,000
377
60
200
40
100
20 All Trials
2026 Q1
2026 Q2
80
300
364
0
180 52
Phase 1
Phase 2
Phase 3
2025 Q3
Phase 4
2025 Q4
Device
2026 Q1
600 1,434
1,000
0
64
60 41 17 3
Phase 1
Phase 2
400
All Trials
0
Clinical Trials Completed in Texas (TTM) 400 300
Phase 3
Phase 4
Device
260
367
330
51
Phase 1
Phase 2
Phase 3
Phase 4
2025 Q3
2025 Q4
2026 Q1
80 238
60
200
40
100
20
0
200
500 0
400
2025 Q4
275
Clinical Trials Completed in Texas (TTM) 1,500
2026 Q2
Clinical Trials Started in Texas (TTM)
0
200
500 0
2026 Q1
600 400
1,000
2025 Q4
Growth in Texas-sponsored Phase 1 and device trial starts contrasts with the national Phase 1 trend and may indicate a growing role for Texas-based companies in trial origination. However, Phase 3 sponsor activity remains limited, suggesting that this shift is still developing.
All Trials
0
54
27
Phase 1
23
Phase 2
6
10
Phase 3
Phase 4
Device
107
Device
STATE OF LIFE SCIENCES IN THE U.S. | 16
New York Trial starts (TTM) at New York sites declined to 1,424 (-9.0% YoY, -3.6% QoQ), with Phase 3 (-15.8% YoY) and Phase 4 (-21.9% YoY) declining most sharply. Phase 1 was the sole growth category (+4.0% YoY). Completions rose 14.0% YoY to 1,240 but declined 4.6% quarter over quarter. New York annual site decline (-9.0% YoY) was the second steepest among the four major states and more than 10 percentage points below the national growth of 1.3%. Its Phase 4 contraction (-21.9% YoY) contrasted sharply with national Phase 4 growth (+15.4% YoY), the widest single-phase gap between any of the four states and the national average. New York-sponsored trial starts rose to 651 (+6.7% YoY, +9.6% QoQ), with Phase 3 (+19.3% YoY), Phase 2|3 (+192.3% YoY) and Phase 2 (+4.6% YoY) all growing. Device sponsor starts increased to 76 (+15.2% YoY, +31.0% QoQ). Completions declined to 414 (-4.8% YoY). New York sponsor activity grew both sequentially and annually, with growth in late stage Phase 3 and Phase 2|3 starts. Its 46% sponsor-to-site ratio — the highest of the four states — indicates that a substantially larger share of trials at New York sites originate with companies headquartered in the state than in Texas, where the ratio is 23%. Clinical Trials Started in New York (TTM) 2,000 1,500
400 1,424
1,000
200
500
100
0
0
All Trials
312
300
2025 Q4
2026 Q1
2026 Q2
304
50
Phase 2
Phase 3
Clinical Trials Started in New York (TTM) 800 600
651
0
All Trials
Phase 4
600 Device
400
2,000 1,500
91
0
2025 Q4
2026 Q1
0
76
68 32
Phase 1
Phase 2
Phase 3
2025 Q3
Phase 4
Device
2025 Q4
2026 Q1
414
100
95
64
50
All Trials
0
29
Phase 1
Phase 2
Phase 3
26
28
Phase 4
Device
400 1,240
200
500
100 All Trials
296
300
1,000
0
2025 Q3
2026 Q2
150
800
200
Clinical Trials Completed in New York (TTM)
99
50
200
2026 Q1
150 100
400
2025 Q4
Clinical Trials Completed in New York (TTM) 185
157
Phase 1
Growth in late-stage sponsor activity, combined with declining Phase 4 activity at New York sites, points to a shift in the state’s clinical trial mix toward later-stage development programs and away from post-market studies.
0
277
160
113 51
Phase 1
Phase 2
Phase 3
Phase 4
Device
STATE OF LIFE SCIENCES IN THE U.S. | 17
Massachusetts Trial starts (TTM) at Massachusetts sites fell to 904 (-15.4% YoY, -8.3% QoQ), with Phase 1 (-17.3% YoY), Phase 2 (-22.7% YoY) and Phase 3 (-25.1% YoY) all in double-digit annual decline. Phase 4 was the sole growth category (+6.1% YoY). Completions declined to 900 (-6.5% YoY, -4.7% QoQ). Massachusetts stands out among the four major states. It is the only state where every major drug development phase declined in double digits simultaneously and the only state with an annual decline in completions. The gap between Massachusetts site starts (-15.4% YoY) and national growth (+1.3%) is the widest of the four states, at 16.7 percentage points. Massachusetts-sponsored trial starts declined 3.3% YoY but increased 3.3% QoQ to 381. Phase 2 starts increased 48.6% YoY and 23.5% QoQ, while Phase 1 (-8.3% YoY) and Phase 3 (-20.0% YoY) declined. Completions increased 31.3% YoY to 319 but declined 5.6% QoQ. Massachusetts’ Phase 2 sponsor growth (+48.6% YoY) was the strongest singlephase sponsor growth among the four states, indicating increased activity at this stage despite broader declines in Massachusetts trial starts. Its 42% sponsor-tosite ratio was second only to New York, indicating that a relatively large share of trials at Massachusetts sites are sponsored by companies headquartered in the state. Clinical Trials Started in Massachusetts (TTM) 1,500 1,000
2025 Q4
2026 Q1
2026 Q2
300 904
500
All Trials
0
111
81
Phase 1
Phase 2
Clinical Trials Completed in Massachusetts (TTM)
1,500 1,000
2025 Q3
Phase 4
2025 Q4
Device
2026 Q1
216
200
381
2026 Q2
80
300
60
200
40
100
20 All Trials
2026 Q1
0
55
52
33 16
Phase 1
Phase 2
Phase 3
21
Phase 4
Device
182
Clinical Trials Completed in Massachusetts (TTM) 400 300
319
2026 Q1
60
100
20
0
0
All Trials
2025 Q4
80
40
200
2025 Q3
40
38
36 11
Phase 1
Phase 2
Phase 3
19
Phase 4
Device
900
100
500 0
Phase 3
300
2,000
400
2025 Q4
170
35
0
Clinical Trials Started in Massachusetts (TTM)
0 191
200 100
Massachusetts’ broad decline in site activity comes amid a more selective funding environment for early-stage biotech companies. The state’s simultaneous declines in Phase 1, Phase 2 and Phase 3 site starts, alongside strong Phase 2 sponsor growth, may indicate that clinical activity is becoming more concentrated among companies and programs that have secured funding.
All Trials
0
97 38
Phase 1
Phase 2
Phase 3
Phase 4
73
Device STATE OF LIFE SCIENCES IN THE U.S. | 18
Private Capital National — All Life Sciences Life sciences deal count (TTM) declined to 1,378 (-18.2% YoY, -7.3% QoQ), while total capital raised increased to $29 billion (+23.8% YoY, +4.3% QoQ). The divergence — fewer deals attracting substantially more capital — reflects an industry-wide concentration in larger, laterstage financings. Series A (+1.9% YoY deal count) remained relatively stable, while series B increased 12.7% YoY, pre-seed declined sharply (-43.6% YoY) and seed declined 10.0%.
All Life Sciences Deal Count by Series (TTM) 2025 Q2
1,684
2025 Q3
1,628
2025 Q4
1,634
2026 Q1
1,487
2026 Q2
Pre-seed
1,378
0
500
1,000
1,500
2,000
Seed Series A
All Life Sciences Total Capital by Series (TTM)
Series B
$40,000 $30,000
$26,565
$28,061
$27,785
$28,977
$23,412
Series C+ Not Disclosed
$20,000 $10,000 0 2025 Q2
2025 Q3
2025 Q4
2026 Q1
2026 Q2
All four states followed the national pattern of declining deal counts, although the magnitude varied considerably. Texas experienced the largest decline (-28.7% YoY) followed by New York (-24.9%), California (-18.2%) and Massachusetts (-9.9%). Capital raised in Texas increased 65.7% YoY to $1.7 billion, driven by a large series B round, while California led in total capital raised at $16.2 billion (+26.0% YoY). National fundraising trends show a growing concentration of capital among fewer deals. Total capital raised increased nearly 24% while deal count fell 18%, resulting in an approximately 50% increase in average deal size YoY. The data suggests investors are directing more capital to fewer, later-stage companies with established clinical or commercial profiles, while earlier-stage companies face a more selective funding environment. The 43.6% YoY decline in pre-seed deals could constrain the development pipeline in the coming years.
STATE OF LIFE SCIENCES IN THE U.S. | 19
Biotech and pharma deal count (TTM) declined to 791 (-7.6% YoY, -3.7% QoQ), a smaller decline than the broader market, while capital raised increased to $21.1 billion (+31.6% YoY, +9.0% QoQ). Series B deal count increased 55.8% YoY, while series B capital increased 66.8% YoY to $5.9 billion, making it the primary driver of growth. Pre-seed declined 33.3% YoY, while series A declined 4.6%, continuing the trend toward greater selectivity.
Device deal count (TTM) declined to 587 (-29.1% YoY, -11.9% QoQ), the larger decline of the two sectors. Capital raised increased to $7.8 billion (+6.6% YoY) but declined sequentially (-6.7% QoQ). Series A increased 16.0% YoY, while pre-seed declined 53.0% and series B declined 38.9%. The device sector experienced a more pronounced decline in early-stage activity than biopharma, with less capital flowing into the earlier stages of the pipeline.
Biotech & Pharma Deal Count by Series (TTM)
Medical Deal Count by Series (TTM)
2025 Q2
2025 Q2
856
2025 Q3
868
2025 Q4
875
2026 Q1
200
400
600
800
$18,838
759
$21,149
$19,397
$6,000
$10,000
$4,000
$5,000
$2,000
0
0 2025 Q4
200
400
$10,000 $8,000
$16,068
2025 Q3
587
0
$15,000
2025 Q2
666
600
800
1,000
Medical Total Capital by Series (TTM)
$25,000 $20,000
2025 Q4
1,000
Biotech & Pharma Total Capital by Series (TTM) $19,270
760
2026 Q2
791
0
2025 Q3
2026 Q1
821
2026 Q2
828
2026 Q1
Pre-seed
2026 Q2
Seed
Series A
Series B
$8,791 $7,343
$8,183
2025 Q2
2025 Q3
Series C+
2025 Q4
$8,388
2026 Q1
$7,827
2026 Q2
Not Disclosed
STATE OF LIFE SCIENCES IN THE U.S. | 20
California (All Life Sciences)
Pre-seed
Series A
Seed
Series B
Series C+
Not Disclosed
California life sciences deal count (TTM) declined to 625 (-18.2% YoY, -6.9% QoQ), matching the national year-over-year decline, while capital raised increased to $16.2 billion (+26.0% YoY, +1.7% QoQ). California accounts for 45% of national deal count and 56% of national capital raised, making it the largest life sciences funding market. California’s deal count decline (-18.2% YoY) matched the national rate, while capital raised increased 26.0%, exceeding growth in all states except Texas (+65.7%), which started from a much smaller base. Series B deal count increased 9.1% YoY, while pre-seed declined 47.9%, consistent with the broader pattern across all four states. California also had the highest capital raised per deal among the four states, reflecting a concentration of larger, late-stage financings. All Life Sciences Deal Count by Series (TTM)
Biotech & Pharma Deal Count by Series (TTM)
Medical Device Deal Count by Series (TTM)
2025 Q2
2025 Q2
2025 Q2
764
2025 Q3
734
2025 Q3
2025 Q4
746
2025 Q4
392 387 396
2025 Q3
347
2025 Q4
350
2026 Q1
671
2026 Q1
363
2026 Q1
2026 Q2
625
2026 Q2
348
2026 Q2
0
200
400
600
800
1,000
0
100
200
300
400
372
500
308 277
0
100
200
300
400
All Life Sciences Total Capital by Series (TTM)
Biotech & Pharma Total Capital by Series (TTM)
Medical Device Total Capital by Series (TTM)
$20,000
$15,000
$8,000
$15,000
$12,895
$14,568
$15,897
$15,976
$16,247
$10,000
$10,000
$9,230
$9,976
$11,009
2025 Q2
2025 Q3
2025 Q4
2026 Q1
2026 Q2
California’s fundraising profile shows a concentration of capital in larger deals, even as overall deal count declines. The state raised $16.2 billion across 625 deals, an average of approximately $26 million per deal, roughly double the national average and triple the Texas average. The figures are consistent with California’s concentration of larger, later-stage life sciences financings.
0
$6,000 $4,000
$5,000
$5,000 0
$8,115
$10,065
$4,779
$5,338
$5,922
$5,911
2025 Q4
2026 Q1
$5,237
$2,000 2025 Q2
2025 Q3
2025 Q4
2026 Q1
2026 Q2
California biotech and pharma deal count declined to 348 (-11.2% YoY) while capital raised to $11 billion (+35.7% YoY), with series B accounting for much of the growth at $2.9 billion (+84.4% YoY). Pre-seed declined -35.6% YoY and series A declined 22.0%, consistent with the national trend toward greater concentration of capital in later-stage programs.
0
2025 Q2
2025 Q3
2026 Q2
California device deal count declined to 277 (-25.5% YoY, -10.1% QoQ) while capital raised increased to $5.2 billion (+9.6% YoY). Series A increased 20.0% YoY, while other stages declined, including pre-seed (-60.3%) and series B (-35.0%). The decline in device deal count was greater than in biotech and pharma, consistent with the broader national pattern. STATE OF LIFE SCIENCES IN THE U.S. | 21
Texas (All Life Sciences)
Pre-seed
Series A
Seed
Series C+
Series B
Not Disclosed
Texas life sciences deal count (TTM) declined to 117 (-28.7% YoY, -22.0% QoQ), the largest decline of any state, while capital raised increased to $1.7 billion (+65.7% YoY), driven by a small number of large deals. Series B capital increased 91.7% YoY, largely due to a single transaction, while series C+ deal count doubled (+100% YoY) to six deals. Texas represents 8.5% of national deal count and 6.0% of national capital raised, the smallest shares among the four states. Its deal count declined 28.7% YoY, compared with an 18.2% national decline, and was approximately 10 percentage points greater than the decline in any other state. However, Texas recorded the highest year-over-year capital growth rate (+65.7% YoY), illustrating the significant effect a single large deal can have in a market with relatively low deal volume All Life Sciences Deal Count by Series (TTM) 2025 Q2
164
Biotech & Pharma Deal Count by Series (TTM)
Medical Device Deal Count by Series (TTM)
2025 Q2
60
2025 Q2
2025 Q3
157
2025 Q3
62
2025 Q3
2025 Q4
158
2025 Q4
60
2025 Q4
2026 Q1
58
2026 Q1
2026 Q1
150
2026 Q2
2026 Q2
117
0
50
100
150
200
All Life Sciences Total Capital by Series (TTM) $2,500
$1,000
$1,875
$1,798
$1,152 $1,730
75
$1,269
$1,244
$1,390
$1,000
$1,044
$500
$500 0
50
Biotech & Pharma Total Capital by Series (TTM) $1,500
$1,933
$2,000 $1,500
25
2025 Q2
2025 Q3
2025 Q4
2026 Q1
2026 Q2
With just 117 TTM deals, Texas remains a relatively small fundraising market where modest changes in deal count can materially impact YoY metrics. Even so, capital raised remained concentrated despite lower deal volume, particularly in pre-seed (-46.4% YoY) and Series B (-62.5%), despite significant clinical trial activity.
0
$399
2025 Q2
2025 Q3
2025 Q4
2026 Q1
95 98 92
2026 Q2
51
0
104
2026 Q2
Texas biotech and pharma deal count declined to 51 (-15.0% YoY, -12.1% QoQ) while capital increased to $1.4 billion, driven largely by a single series B round. Excluding that transaction, funding activity was more subdued: pre-seed declined 25.0% YoY, seed was relatively unchanged and series A activity remained limited. The increase in capital raised therefore does not reflect broad-based growth across funding stages.
66
0
20
40
60
80
100
120
Medical Device Total Capital by Series (TTM) $875 $750 $625 $500 $375 $250 $125 0
$645
$782 $606
$554 $339
2025 Q2
2025 Q3
2025 Q4
2026 Q1
2026 Q2
Texas device deal count declined to 66 (-36.5% YoY, -28.3% QoQ), the largest decline among the four states, while capital raised declined to $339 million (-47.4% YoY, -38.8% QoQ). Pre-seed (-62.5% YoY), series A (-40.0%) and series B (-50.0%) all declined. This contrasts with growth in device clinical trial starts in Texas, indicating different trends in fundraising and clinical trial activity. STATE OF LIFE SCIENCES IN THE U.S. | 22
New York (All Life Sciences)
Pre-seed
Series A
Seed
Series B
Series C+
Not Disclosed
New York life sciences deal count (TTM) declined to 226 (-24.9% YoY, -1.7% QoQ), the second-largest decline after Texas, while capital raised declined to $2.1 billion (-11.5% YoY, +13.1% QoQ). New York is the only state where both deal count and capital raised declined year over year. New York’s declines in both deal count (-24.9%) and capital raised (-11.5%) are unique among the four states and contrast with the national pattern, where capital raised increased 23.8% despite falling deal counts. Series A deal count increased 85.7% YoY despite lower overall deal volume. Pre-seed (-42.6%) and Series C+ (-28.6%) accounted for much of the contraction. New York represents 16% of national deal count but 7% of capital raised, the lowest capital share relative to deal volume. All Life Sciences Deal Count by Series (TTM)
Biotech & Pharma Deal Count by Series (TTM)
Medical Device Deal Count by Series (TTM)
2025 Q2
2025 Q2
2025 Q2
301
2025 Q3
277
2025 Q3
2025 Q4
275
2025 Q4
147 145 139
2025 Q3
132
2025 Q4
136
2026 Q1
230
2026 Q1
118
2026 Q1
2026 Q2
226
2026 Q2
119
2026 Q2
0
100
200
300
400
All Life Sciences Total Capital by Series (TTM) $3,000
50
100
150
200
Biotech & Pharma Total Capital by Series (TTM) $2,000
$2,351
$2,000
$2,161
$2,265
$1,840
$2,081
$1,500
$1,384 $1,017
$1,167
$1,275
$1,317
2025 Q3
2025 Q4
2026 Q1
2026 Q2
New York’s decline in fundraising contrasts with growth in clinical trial sponsor activity (+9.6% QoQ) and relatively stable patent output (+0.2% YoY). The differing trends suggest that clinical development and innovation activity are continuing despite lower levels of new private capital investment. New York’s share of national capital raised also remains relatively low compared with its share of deal volume.
0
107
0
50
100
150
200
Medical Device Total Capital by Series (TTM)
$1,000
$967
$1,144
$1,098
2025 Q2
2025 Q3
2025 Q4
2026 Q1
2026 Q2
New York biotech and pharma deal count declined to 119 (-19.0% YoY, +0.8% QoQ), while capital raised declined to $1.3 billion (-4.8% YoY, +3.3% QoQ). Series A increased 100% YoY to 14 deals, the largest increase among the four states, even as overall deal activity declined. Pre-seed (-30.8% YoY) and series C+ (-75.0%) accounted for much of the overall decline.
0
$763
$565
$500
$500 2025 Q2
112
$1,500
$1,000
$1,000 0
0
154
2025 Q2
2025 Q3
2025 Q4
2026 Q1
2026 Q2
New York device deal count declined to 107 (-30.5% YoY, -4.5% QoQ), while capital raised declined to $763 million (-21.1% YoY) but increased 35.0% quarter over quarter. Series A increased 71.4% YoY, while pre-seed declined 51.4%. The decline in device deal count was greater than in biotech and pharma, consistent with the national pattern. STATE OF LIFE SCIENCES IN THE U.S. | 23
Massachusetts (All Life Sciences)
Series A
Seed
Pre-seed
Series C+
Series B
Not Disclosed
Massachusetts life sciences deal count (TTM) declined to 410 (-9.9% YoY, -6.0% QoQ), the smallest decline among the four states, while capital raised increased to $8.9 billion (+25.2% YoY, +9.2% QoQ). Massachusetts accounts for 30% of national deal count and 31% of national capital raised, the most closely aligned shares among the four states. Massachusetts’ deal count declined 9.9% YoY, compared with an 18.2% national decline, despite larger declines in the state’s clinical trial activity (-15.4% YoY) and corporate patent activity (-15.2% YoY). This divergence indicates that fundraising activity is following a different pattern than clinical and patent activity. Series B deal count increased 73.7% YoY, while series B capital increased 65.5%, the largest increase among the four states. All Life Sciences Deal Count by Series (TTM) 2025 Q2
455
2025 Q3
460
2025 Q4
455
Biotech & Pharma Deal Count by Series (TTM)
Medical Device Deal Count by Series (TTM)
2025 Q2
2025 Q2
257
2025 Q3
274
2025 Q3
2025 Q4
280
2025 Q4
2026 Q1
436
2026 Q1
282
2026 Q1
2026 Q2
410
2026 Q2
273
2026 Q2
0
100
200
300
400
500
0
50
100
150
200
250
300
All Life Sciences Total Capital by Series (TTM)
Biotech & Pharma Total Capital by Series (TTM)
$10,000
$8,000
$8,000
$7,122
$7,903
$8,024
$8,171
$8,920
$6,000
$6,000 $4,000 $2,000 0
2025 Q2
2025 Q3
2025 Q4
2026 Q1
2026 Q2
Massachusetts stands out for the contrast between declining clinical trial and patent activity and comparatively stronger fundraising. The difference may reflect timing between capital raises and subsequent clinical activity or a greater concentration of capital among fewer companies.
$7,432 $6,170
$6,984
$6,858
$6,813
175 154 137
50
$2,000
$500 2025 Q4
2026 Q1
2026 Q2
Massachusetts biotech and pharma deal count increased to 273 (+6.2% YoY, +3.2% QoQ), the only state with year-over-year growth. Capital raised increased to $7.4 billion (+20.5% YoY, +9.1% QoQ). Series B drove much of the growth, with capital raised increasing 70.3% YoY to $2.4 billion. Pre-seed declined 34.1% YoY, seed declined 71%, and Series A was relatively unchanged (+2.8%).
150
200
250
$2,000 $1,500
2025 Q3
100
Medical Device Total Capital by Series (TTM)
$1,000
2025 Q2
186
0
$4,000
0
198
0
$952
$919
2025 Q2
2025 Q3
$1,166
2025 Q4
$1,358
$1,487
2026 Q1
2026 Q2
Massachusetts device deal count declined to 137 (-30.8% YoY, -11.0% QoQ), similar to the national device decline. Capital raised increased to $1.5 billion (+56.2% YoY, +9.5% QoQ), with increases in Series A (+25.0% YoY) and Series C+ capital (+129.4% YoY). Series C+ deal count declined 41.7%, indicating fewer but larger later-stage rounds. Pre-seed declined 40.5% YoY. STATE OF LIFE SCIENCES IN THE U.S. | 24
Mergers and Acquisitions National — All Life Sciences Life sciences M&A deal count (TTM) declined to 277 (-18.8% YoY, +4.5% QoQ), while disclosed deal value increased to $247.2 billion (+132.3% YoY, +43.4% QoQ). Q2 2026 accounted for $102.4 billion across 89 deals, the largest quarter in the dataset, including 10 deals valued at more than $2.5 billion each and totaling $72.3 billion. Of the 277 TTM deals, only 45% disclosed transaction values, meaning reported figures represent a minimum estimate of total M&A value and should be interpreted accordingly throughout this section. California led M&A activity with 65 TTM deals (23% of the national total) and $86.4 billion in disclosed value (35% of the national total), followed by Massachusetts with 45 deals and $60 billion. Texas (12 deals, $3 billion) and New York (11 deals, $15 billion) accounted for smaller shares of deal count, while a single large transaction in Q4 2025 accounted for a significant portion of New York’s disclosed value. Deal count declined in California and Texas but increased in Massachusetts (+36.4% YoY) and New York (+37.5% YoY), both from relatively small bases.
All Life Sciences Deal Count by Value (TTM)
All Life Sciences Deal Count by State
2025 Q2
455
2025 Q3
460
2025 Q4
455
2026 Q1
436
2026 Q2
410
23%
0
100
200
300
California Massachusetts Texas
52% 16%
400
4%
New York Rest of U.S.
4%
M&A activity is becoming more concentrated in larger transactions, with contingent consideration playing a significant role in deal structures. The number of transactions valued at more than $2.5 billion increased from nine in the prior TTM period to 22 in the current TTM, while deals under $250 million declined. In addition, 73% of recent biotech and pharma deals include earnout provisions, according to the SRS Acquiom 2025 Life Sciences M&A Study, meaning reported transaction values may significantly exceed the amount paid at closing. Of the $95.1 billion in aggregate earnout potential tracked across 342 life sciences deals, 9.5% ($9 billion) has been paid. Milestone achievement rates also vary by sector: 22% of biotech and pharma development milestones have been achieved, compared with 43% for devices and diagnostics. For acquirers, sellers and their advisors, these figures highlight the importance of distinguishing between total announced deal value and consideration paid at closing or upon achievement of subsequent milestones. All Life Sciences Total Capital by Value (TTM)
All Life Sciences Total Capital by State
$300B $247.2B
$250B $200B $150B $100B
California Massachusetts
$172.3B
34% $106.4B
$108.7B
35%
$109.9B
Texas New York
$50B $0B 2025 Q2
2025 Q3
2025 Q4
2026 Q1
Under $25M
$25M-$100M
$100M-$250M
$1.0B-$2.5B
Over-$2.5B
Not Disclosed
2026 Q2
Rest of U.S.
6% 1%
24%
$250M-$1.0B
STATE OF LIFE SCIENCES IN THE U.S. | 25
California
Under $25M
$25M-$100M
$100M-$250M
$250M-$1.0B
Over-$2.5B
$1.0B-$2.5B
Not Disclosed
California M&A deal count (TTM) declined to 65 (-8.5% YoY) but increased 25.0% quarter over quarter, with 31 deals occurring in 2026 — nearly half the TTM total. Disclosed deal value increased to $86.4 billion (+273.9% YoY), with Q2 2026 contributing $42.6 billion alone, including five deals valued at more than $2.5 billion each and totaling $29.7 billion. California’s deal count decline (-8.5% YoY) was smaller than the national decline (-18.8%) by approximately 10 percentage points. Its 63% disclosure rate also exceeded the national rate of 45%. California accounted for 35% of national disclosed M&A value but 23% of deal count, indicating a higher average disclosed value per transaction than the national average. All Life Sciences Deal Count by Value (TTM) 2025 Q2
71
2025 Q3
67
2025 Q4
57
2026 Q1
52
2026 Q2 20
40
60
$86.4B
$80B
$20B $0B
33
2025 Q2
2025 Q3
31
2025 Q3
2025 Q4
28
2025 Q4
2026 Q1
29
2026 Q1
0
10
20
$21.9B
$23.3B
2025 Q2
2025 Q3
2025 Q4
$80B
$20B 2026 Q1
2026 Q2
40
50
Biotech & Pharma Total Capital by Series (TTM) $71.7B
$42.8B
$40B
$46.1B $23.1B
30
$0B
$11.0B
$11.4B
2025 Q2
2025 Q3
$16.5B
2025 Q4
2026 Q1
38 36 29 23
2026 Q2
35
$60B
$60B $40B
2025 Q2
80
All Life Sciences Total Capital by Series (TTM) $100B
Medical Device Deal Count by Value (TTM)
2026 Q2
65
0
Biotech & Pharma Deal Count by Value (TTM)
2026 Q2
California’s M&A activity increased substantially in the first half of 2026, particularly among larger transactions in Q2. Deal count increased from 14 in Q1 to 31 in Q2, indicating increased acquisition activity during the quarter.
at more than $2.5 billion accounting for the majority of Q2 2026’s $42.6 billion in disclosed value. Transactions valued between $1 billion and $2.5 billion also increased to five in Q2 2026, compared with two or three per quarter historically.
California’s biotech and pharma M&A was concentrated among larger transactions, with deals valued
California device M&A contributed to deal count, particularly among transactions valued between
30
0
10
20
30
40
50
Medical Device Total Capital by Series (TTM) $16B $14B $12B $10B $8B $6B $4B $2B
$0B
$14.8B
$12.2B $10.5B $6.8B $3.3B
2025 Q2
2025 Q3
2025 Q4
2026 Q1
2026 Q2
$250 million and $1 billion. It appears that device targets in California benefited from the state’s concentration of medtech companies in the Bay Area and San Diego, where companies with regulatory clearance and commercial traction attracted strategic acquirers looking for shorter-timeline revenue additions. STATE OF LIFE SCIENCES IN THE U.S. | 26
Texas Texas M&A activity included 12 TTM deals (+20.0% YoY), of which four disclosed transaction values totaling $3 billion. The 33% disclosure rate was the lowest among the four states. Deal activity was concentrated in Q1 and Q2 2026, with four and five deals respectively, but none of the five Q2 transactions disclosed a value. A single $2.3 billion transaction in Q3 2025 accounted for most of the TTM disclosed value. Texas accounts for 4% of national deal count and 1.2% of national disclosed deal value. With 12 TTM deals, the relatively small sample limits the ability to draw meaningful trend conclusions; a change of one deal can shift the year-over-year percentage by more than 8 points. The 33% disclosure rate further limits comparisons based on deal value.
All Life Sciences Deal Count by Value (TTM) 2025 Q2
10
2025 Q3
8
2025 Q4
6
2026 Q1
10
2026 Q2
1
0
5
10
15
All Life Sciences Total Capital by Value (TTM)
Texas’ relatively low M&A activity is consistent with its smaller share of national life sciences deal activity. While occasional large transactions can significantly affect the state’s disclosed deal value, the limited number of transactions makes it difficult to identify a consistent M&A trend.
$4B $3.0B
$3.0B
$3.0B
2025 Q4
2026 Q1
2026 Q2
$3B $2.4B
$2B
$1B
$889.7M
$0B 2025 Q2
Under $25M
$25M-$100M
$100M-$250M
2025 Q3
$250M-$1.0B
$1.0B-$2.5B
Over-$2.5B
Not Disclosed
STATE OF LIFE SCIENCES IN THE U.S. | 27
New York New York M&A activity included 11 TTM deals (+37.5% YoY), up from eight in the prior year period. Disclosed value totaled $15 billion, including a single $9.8 billion transaction in Q4 2025. The remaining 10 deals totaled $5.2 billion in disclosed value. The 82% disclosure rate was the highest among the four states. New York accounts for 4% of national deal count, like Texas, but 6% of national disclosed deal value. New York’s higher share of disclosed value relative to deal count reflects the effect of larger transactions, including the $9.8 billion Q4 2025 deal. New York’s M&A activity contrasts with its private capital trends. Total capital raised declined 11.5% YoY, while M&A deal count increased 37.5%. However, the relatively small number of M&A transactions and the concentration of disclosed value in one large transaction limit broader conclusions about the relationship between the two trends.
All Life Sciences Deal Count by Value (TTM) 2025 Q2
8
2025 Q3
8
2025 Q4
10
2026 Q1
10
2026 Q2
11
0
2
4
6
8
10
12
All Life Sciences Total Capital by Value (TTM) $20B $15.0B
$15B $11.3B
$11.3B
2025 Q4
2026 Q1
$10B
$5B $309.4M
$349.5B
2025 Q2
2025 Q3
$0B
Under $25M
$25M-$100M
$100M-$250M
$250M-$1.0B
$1.0B-$2.5B
Over-$2.5B
2026 Q2
Not Disclosed
STATE OF LIFE SCIENCES IN THE U.S. | 28
Massachusetts Massachusetts M&A deal count (TTM) increased to 45 (+36.4% YoY, -2.2% QoQ), the only large state to report annual deal count growth. Disclosed deal value increased to $60 billion (+170.9% YoY), with Q2 2026 accounting for $39.4 billion across nine deals, including three transactions valued at more than $2.5 billion each and totaling $34.3 billion. The quarter accounted for nearly two-thirds of the TTM value. Massachusetts was the only state where M&A deal count increased year over year, compared with an 18.8% national decline. However, disclosed value was highly concentrated in a small number of large Q2 2026 transactions. Massachusetts’ 62% disclosure rate was comparable to California’s 63%. Massachusetts’ M&A activity contrasts with trends in other measures of the state’s life sciences sector. While clinical trial activity (-15.4% YoY) and corporate patent output (-15.2%) declined, Massachusetts recorded the largest increase in M&A deal count among the four states (+36.4%YoY). This makes strategic sense — acquirers are purchasing the companies that Massachusetts’ venture ecosystem built over the prior cycle, even as the next generation of startups faces funding headwinds. One possible explanation is that Massachusetts is harvesting from its deep historical pipeline of venture-backed biotech companies, many of which now have the clinical data packages that large pharma is paying premium for.
All Life Sciences Deal Count by Value (TTM) 2025 Q2
33
2025 Q3
42
2025 Q4
41
2026 Q1
46
2026 Q2
45
0
10
20
30
40
50
All Life Sciences Total Capital by Value (TTM) $80B $60.0B
$60B
$40B
$20B
$22.1B
$23.6B
$24.7B
$25.2B
2025 Q3
2025 Q4
2026 Q1
$0B 2025 Q2
Under $25M
$25M-$100M
$100M-$250M
$250M-$1.0B
2026 Q2
$1.0B-$2.5B
Over-$2.5B
Not Disclosed
STATE OF LIFE SCIENCES IN THE U.S. | 29
Biotech and pharma transactions accounted for the majority of Massachusetts’ disclosed M&A value. In Q2 2026, transactions valued at more than $2.5 billion accounted for $34.3 billion in disclosed value, suggesting acquirers are targeting late-stage or approved-stage biotech companies in the state’s core therapeutic areas of oncology, rare disease and genetic medicine. Device M&A activity in Massachusetts was lower than biotech and pharma activity, with transactions occurring mostly in $250 million-$1 billion range. Q2 2026 also included the approximately $20 billion acquisition of Hologic, Inc. Biotech & Pharma Deal Count by Value (TTM)
Medical Device Deal Count by Value (TTM)
2025 Q2
2025 Q2
13
2025 Q3
13
20
2025 Q3
29
2025 Q4
2025 Q4
32
35
2026 Q1 2026 Q2 10
20
2026 Q2
30
40
Biotech & Pharma Total Capital by Series (TTM) $40B
14
0
5
10
15
20
Medical Device Total Capital by Series (TTM) $35.7B
$30B $20B
11
2026 Q1
31
0
9
$30B $24.2B
$25B $20B
$21.3B
$20.8B
$22.2B
$22.2B
$15B $10B
$10B
$5B
$0B
$0B 2025 Q2
2025 Q3
Under $25M
2025 Q4
2026 Q1
$25M-$100M
2026 Q2
$100M-$250M
$2.8B
2025 Q2
$250M-$1.0B
$2.5B
$3.0B
$1.0B
$1.0B-$2.5B
2025 Q3
Over-$2.5B
2025 Q4
2026 Q1
2026 Q2
Not Disclosed
STATE OF LIFE SCIENCES IN THE U.S. | 30
Public Markets Public Biotech Rallies as IPO Window Reopens The public biotech sector outperformed broader equity markets in H1 2026, with the XBI Biotech ETF rising 30.2% through June — more than triple the S&P 500’s 9.3% gain and ahead of the Nasdaq’s 20.1%. The rally occurred against a backdrop of improving volatility, with the VIX declining to 16.45 by June 30 — well below the 20 threshold broadly considered conducive to IPO activity. Biopharma raised $5 billion across 13 offerings in H1 2026, exceeding fullyear totals from 2022 through 2025. Two offerings — Kailera Therapeutics ($625 million) and Parabilis Medicines ($670 million) — became the largest development-stage biotech IPOs on record, surpassing the previous mark set by Moderna in 2018. Both companies recorded substantial first day gains of 63% and 58% respectively. One possible explanation is that it is signaling strong institutional appetite for differentiated science with clear clinical value propositions. Medtech IPO activity was more limited, with
two U.S. offerings raising $710 million, led by MiniMed Group’s $560 million Q1 offering. The U.S. life sciences public company universe tracked in this report comprises approximately 364 companies with significant operations across the four focus states — 269 in biopharma and 95 in medical devices. California leads with approximately 230 companies, followed by Massachusetts at 90, Texas at 60 and New York at 52. Because some companies maintain significant operations in multiple states, individual state figures are not mutually exclusive. California and Massachusetts together represent the largest concentration of public life sciences companies, consistent with their dominance in patent output, clinical trial sponsorship and venture fundraising. Texas’ public company roster skews differently from the coastal states. While California and Massachusetts are overwhelmingly biopharma-heavy, Texas’ 60 public life sciences companies
include a notable concentration of large medical device manufacturers and life sciences tool companies that maintain significant operations in the state, alongside a growing base of smaller Texas-headquartered biotech companies. This device and tools orientation is consistent with the state’s clinical trial profile (device sponsor starts grew +52.4% YoY) and its real estate development pipeline, where purpose-built lab and manufacturing space is expanding in Houston, Austin and Dallas-Fort Worth.
Improved public market conditions have implications across the capital formation spectrum. For late-stage private companies, a more active IPO market provides an alternative to M&A as an exit strategy. However, the IPO market remains selective: 11 of 13 H1 2026 biopharma IPOs had Phase 2 assets or later, consistent with the broader concentration of capital in companies with more advanced clinical programs. [See Hot Topic: Going Public May Be About to Get Easier]
Public Company Indices in Q2 2026 30% California
25%
Massachusetts
20%
New York
15%
Texas
10%
XBI
5%
S&P500
0% -5% -10% -15% March 31
April 30
May 31
June 30
STATE OF LIFE SCIENCES IN THE U.S. | 31
Real Estate Life Sciences Real Estate: Oversupply Persists as Stabilization Signals Emerge The national life sciences real estate market remained under pressure in H1 2026, though early signs of stabilization emerged in select submarkets. Vacancy rates remained elevated, including San Francisco Bay Area at 31.1%, Boston Metro at 28.7% and San Diego at 26.9%, reflecting the continued oversupply following the 2021-22 construction boom of. All three coastal markets reported negative absorption through much of the period, along with declining asking rents and elevated sublease availability. However, Cambridge recorded its first positive net absorption since Q3 2025. New development has largely halted across the major markets, reducing the amount of new supply entering an already oversupplied market. Sublease availability also has begun to decline in the Bay Area, providing another potential sign of stabilization. Improving private capital, IPO and M&A activity could eventually support greater demand for life sciences real estate, although current conditions remain favorable to tenants.
Texas presents a different picture. With approximately 13.2 million square feet of combined inventory across Houston (5.0 million square feet), Austin (4.9 million) and Dallas-Fort Worth (3.3 million), the state’s life sciences real estate market remains in an earlier stage of development. Houston, anchored by the Texas Medical Center, has the largest established inventory but no competitive life sciences space currently under construction. Development activity is concentrated in Austin, with 224,000 square feet under construction and 1.3 million proposed and DallasFort Worth, with 61,200 square feet under construction and 2.6M square feet proposed. New York’s life sciences real estate market is not tracked as a standalone segment by the major commercial real estate brokerages, though growing institutional and developer interest in Brooklyn and Long Island City suggests this may change in future reporting periods. Sources: CBRE Life Sciences MarketView (San Francisco, San Diego, Boston); Cushman & Wakefield (San Diego); CoStar (Texas markets); Weaver real estate practice team.
STATE OF LIFE SCIENCES IN THE U.S. | 32
Hot Topic Cost Segregation Studies for Life Science Properties Why Life Science Properties Are Strong Candidates for Cost Segregation Life science real estate presents a range of opportunities for owners and investors, from new development in emerging markets such as Texas to acquisition opportunities in coastal markets working through excess inventory from the 2021-2022 construction cycle. Whether constructing a new facility, acquiring an existing lab building or funding significant tenant improvements, companies may be able to accelerate tax deductions through cost segregation. Cost segregation is an engineering-based approach that identifies building components that may qualify for shorter depreciation periods rather than the standard 39-year recovery period for nonresidential real property. Qualifying personal property may be depreciated over five or seven years, while certain land improvements may qualify for a 15-year recovery period. The reclassified assets may also qualify for accelerated depreciation. Life science properties can be particularly well suited to cost segregation because laboratories, cleanrooms and specialized research facilities often contain a high concentration of components that may qualify for shorter recovery periods. These may include lab casework and benchtops, HVAC and exhaust systems serving
lab spaces, electrical systems for high-voltage equipment, plumbing for specialized gas lines and deionized water, and process piping may qualify for five or seven-year treatment. The potential impact can be significant. Consider a life science real estate investor acquiring a 40,000 square foot lab building in the Texas Medical Center for $18 million, including $12 million allocated to the building and $6 million to land. Without a cost segregation study, the $12 million building basis depreciates over 39 years at roughly $308,000 per year. After a study, an engineer identifies $3.2 million as 5-year personal property and $1.8 million as 15-year land improvements, leaving $7 million as 39-year structural. With 100% bonus depreciation, the $5 million of shorter-lived property is fully deducted in Year 1, pushing first-year depreciation from $308,000 to approximately $5.3 million. At a 37% effective tax rate, the accelerated deductions generate approximately $1.85 million in additional first-year tax savings compared to straight-line
depreciation — cash that would otherwise have been recovered incrementally over the remaining depreciable life of the building. Owners, investors and tenants that construct, acquire or significantly renovate life science properties may benefit from a cost segregation study. A study must be performed by a qualified engineer and documented to withstand IRS scrutiny, and it is generally most effective when considered early in the acquisition, construction or renovation process. For life science companies and investors making significant real estate investments, considering cost segregation early can help identify available tax benefits and incorporate them into broader project and tax planning. Author
Lauren Daigle
Senior Manager, Audit Weaver
STATE OF LIFE SCIENCES IN THE U.S. | 33
For Life Sciences Founders, Going Public May Be About to Get Easier For the past two decades, the rising cost of public company compliance has contributed to the challenges life sciences companies face in accessing the public markets. A new SEC proposal could reduce some of those costs, particularly for smaller companies. The SEC has proposed reforms to rules defining public company compliance that have not been revised since 2005. Among other changes, the SEC’s proposal would raise the large, accelerated filer threshold from $700 million to $2 billion, extend the emerging growth company transition period to five years and use a two-year average to determine filer status rather than a single measurement date. These changes could be particularly significant for life sciences companies. Unlike many companies entering the public markets, clinical-stage biotech companies may have little or no revenue. Drug development can take more than a decade, requiring companies to fund research and clinical development long before a product reaches the market. Public company compliance costs can therefore compete with resources available for research and development. Industry testimony to Congress cited one clinicalstage company whose annual cost for the external
audit of internal control over financial reporting increased from $650,000 to $2.2 million. The proposal also comes as biotech IPO activity is increasing. In H1 2026, 13 biopharma offerings raised $5.0 billion, exceeding full-year totals from 2022 through 2025. Offerings from Kailera Therapeutics ($625 million) and Parabilis Medicines ($670 million) set records for development-stage biotech IPOs, while the XBI Biotech ETF increased 30.2% through June. The proposed SEC changes are not yet final. Life sciences companies considering an IPO should continue planning under current requirements while evaluating how potential rule changes could affect their timelines and compliance costs. Regardless of the final rules, establishing strong financial reporting processes early remains an important part of public company readiness. Author
David Lange
Partner, Governance, Risk and Compliance Weaver
STATE OF LIFE SCIENCES IN THE U.S. | 34
What Life Sciences Deal Data Reveals About Valuation Risk Life sciences M&A activity is increasingly concentrated in large transactions but announced deal values do not always reflect the consideration paid at closing. Disclosed deal value reached more than $247 billion (TTM) across pharmaceutical, biotechnology and device transactions, with Q2 2026 accounting for $102 billion across 89 deals. Understanding the role of contingent consideration is important when evaluating these figures. Earnouts are a significant component of life sciences deal structures. Among 466 private-target life sciences transactions studied through mid-2025, 73% included earnout provisions — milestone-based contingent payments tied to specific development, regulatory or commercial targets. Among biotech and pharma transactions, earnouts appeared in 89% of deals, up from 77% four years earlier. Aggregate up-front payments across the studied biotech and pharma deals totaled $64.8 billion, while potential earnout value totaled an additional $81.5 billion. As a result, a substantial portion of announced transaction value may depend on future milestone achievement. Of $95.1 billion in total earnout potential across the life sciences sectors studied, $9 billion, or 9.5%, had been paid as of mid-2025. Achievement rates varied considerably by sector. Among milestones
that had become due, 22% of biotech and pharma development milestones were achieved, compared with 43% of device and diagnostics milestones. These differences have important implications for both buyers and sellers. For sellers, the structure and achievability of earnout milestones can significantly affect the ultimate value received in a transaction. Among biotech and pharma deals with milestones due, 45% had received no earnout payments as of the study period. Preclinical assets had the lowest achievement rate by dollar value, with 8% of potential earnout value paid, while commercial-stage milestones had the highest at 25%. Buyers, meanwhile, can use contingent consideration to link a portion of the acquisition price to future development, regulatory or commercial performance. Deal consideration also is changing. Among recent biotech and pharma transactions, 27% included a combination of cash and buyer equity as closing consideration, up from 5% a decade earlier. Equity consideration introduces another variable for sellers because the ultimate value received can be
affected by the acquirer’s stock performance after closing. It can also add complexity to purchase price allocation and transaction accounting. For life sciences companies considering a transaction, headline deal value is only one measure of value. The amount paid at closing, the structure and achievability of earnout milestones and the form of consideration all affect the economics of a transaction. Companies also should consider the accounting implications early, including ASC 805 purchase price allocation, fair value measurement of contingent consideration and subsequent remeasurement requirements. Author
Tyler Ridley
Partner, Financial Advisory Services Weaver Source: SRS Acquiom, 2025 Life Sciences M&A Study (September 2025). Study covers 466 private-target transactions closed from 2008 through 2025. Achievement rates are based on 242 deals with at least one milestone due by mid-2025.
STATE OF LIFE SCIENCES IN THE U.S. | 35
The views expressed in this report are solely those of the authors and do not necessarily reflect the views of Weaver. This material, including without limitation to the statistical information herein, is provided for informational purposes only. The material is based in part on information from third-party sources that we believe to be reliable but which has not been independently verified by us, and, as such, we do not represent the information is accurate or complete. The information should not be viewed as tax, accounting, investment, legal or other advice, nor is it to be relied on in making an investment or other decision. You should obtain relevant and specific professional advice before making any investment or accounting decisions. Nothing relating to the material should be construed as a solicitation, offer or recommendation to acquire or dispose of any investment, or to engage in any other transaction. All non-Weaver named companies listed throughout this document, as represented with the various statistical, thoughts, analysis and insights shared in this document, are independent third parties and are not affiliated with Weaver. Any predictions are based on subjective assessments and assumptions. Accordingly, any predictions, projections or analysis should not be viewed as factual and should not be relied upon as an accurate prediction of future results. © COPYRIGHT 2026, WEAVER AND TIDWELL, L.L.P. | FOR MORE INFORMATION VISIT WEAVER.COM.