Liquidity Supply to Early Bio Ventures Centered on RA Capital

Venture capital firm RA Capital Management is actively leading the global bio investment ecosystem, participating in 30 funding rounds in 2026 alone. In September, it participated consecutively in Solstice Oncology's $225 million Series A and Tectora Therapeutics' $55 million round. Tectora is a spinoff of Schrödinger (SDGR). Additionally, it co-led a $56 million round for Typewriter Therapeutics, which develops in vivo CAR-T therapies, and deployed capital into metabolic disease biotech Superluminal Medicines. Large pharmaceutical company Eli Lilly (LLY) is also serving as a key source of funding for private biotechs, executing 12 venture investments this year based on liquidity secured from the success of its obesity treatments.

Shock of Consecutive Phase 3 Failures in Novartis' Core RNA Pipeline

Conversely, big pharma Novartis (NVS) experienced a severe stock price correction, with over $40 billion in market capitalization evaporating in a single week due to consecutive failures in key late-stage Phase 3 clinical trials. Pelacarsen, an antisense oligonucleotide (ASO) targeting Lipoprotein(a) (Lp(a)) being co-developed with Ionis Pharmaceuticals (IONS), failed to meet its primary endpoint in the large-scale cardiovascular disease prevention Phase 3 HORIZON trial. Subsequently, del-desiran (AOC 1001), an antibody-oligonucleotide conjugate (AOC) from Avidity Biosciences (which was acquired for $12 billion), also failed to meet its target in the Phase 3 HARBOR study for Myotonic Dystrophy Type 1 (DM1). As flagship pipelines expected to generate peak annual sales of over $1.5 billion failed one after another, Novartis' strategy to defend against patent expirations after 2030 has faced serious setbacks.

Reverse Merger Trend Emerging as an Alternative to Traditional IPOs

As high entry barriers in the IPO market persist, reverse mergers—where unlisted biotech companies acquire listed shell companies—have firmly emerged as a new mainstream funding channel. According to data from life science advisory firm JB Strategy Partners, there have been approximately 24 biotech reverse merger deals announced so far in 2026, more than doubling the 10 deals in all of 2025. A representative case is the recent announcement of a merger between Ambros Therapeutics, a chronic pain treatment developer, and Werewolf Therapeutics (HOWL), which was undergoing clinical pipeline restructuring. Once considered a desperate measure for struggling companies, reverse mergers are being completely re-evaluated as a strategic choice to rapidly access Nasdaq capital under the leadership of influential institutional investors.

Influx of Institutional Capital such as Janus Henderson and Revaluation

According to Gilmartin Group data, global asset manager Janus Henderson (JHG) is driving structural transactions as the most frequent sponsor of biotech reverse mergers this year. A win-win structure has emerged in which unlisted companies with promising early-stage pipelines immediately acquire the remaining cash and listed status of public companies, while listed companies preserve their equity value rather than facing liquidation. However, as demonstrated by the Novartis case, failure to prove clinical efficacy in late-stage Phase 3 trials leads to massive destruction of shareholder value, making market scrutiny increasingly harsh. Consequently, the biotech financial landscape is being reshaped by VCs' initial diversification of investments across platforms to spread risk and restructuring centered on reverse mergers to maximize capital efficiency.