Biopharma Sentiment Index | Q4 2025

The inaugural BPSI shows a sector still mired in pessimism. Will this quarter be the turning point? Introducing the BPSI The biopharma industry runs on science, capital and confidence. When sentiment shifts, the effects can ripple through the industry in an instant. The Biopharma Sentiment Index (BPSI) was built to capture these changes, distilling thousands of perspectives from executives, investors, scientists and policy insiders into a single headline number. This inaugural release of the BPSI suggests that we could be at the start of one of those rippling changes in sentiment. The headline BPSI score stands at 78, well below the neutral baseline of 100, signaling a deeply pessimistic mood in biopharma. But the underlying data also show some pockets of hope emerging for the year ahead. Endpoints Signal, the new intelligence platform at Endpoints News, modeled the BPSI after the University of Michigan’s consumer confidence index, an 80-year-old benchmark for US economic conditions. Each quarter, we survey the global biopharma ecosystem to gauge sentiment across five key dimensions: business conditions, financial health, fundraising climate, regulatory environment and hiring. The result is one easy-to-grasp index number that tracks overall sentiment, along with two subindexes that split the story between Current Conditions and Future Expectations. We tease out important differences in viewpoint: between the US and China, for example, and between investors and pharma execs. Each quarter, we also include rotating “pulse” questions that measure confidence around timely issues — from the M&A outlook to the pace of innovation. The Q4 2025 BPSI draws from the expert subscriber base at Endpoints News. It includes the viewpoints of 1,457 verified respondents, a quarter of whom are C-level executives. Future installments will show how sentiment changes over time and how those changes line up with quantitative measures of the industry’s performance. The BPSI is calibrated to 100, which is the score one would expect during an average year for the industry (see Methodology for details). Anything above 100 is considered positive sentiment, with a maximum score of 180, and anything below is negative. Of course, 2025 is no average year. The inaugural reading of 78 captures a sector still in recovery from one of its most challenging stretches in decades. Contents Introducing the BPSI Headline results 2.1 Current conditions 2.2 Future expectations 2.3 Decoupling of expectations in Q4 Differences of opinion 3.1 Investors vs. drugmakers vs. academics 3.2 C-suite execs vs their employees 3.3 China vs US Pulse findings 4.1 Dealmaking and stock performance 4.2 Artificial intelligence and innovation 4.3 Reasons for pessimism and optimism Methodology 5.1 Sample and survey design 5.2 Baseline and index construction 5.3 Data quality and citing the BPSI Today's Reality After four punishing years, the collective mood across biopharma remains bleak. The survey was fielded in mid-October, a time when markets were in flux. While conditions had improved significantly compared to prior quarters, venture capital activity remained subdued, layoffs lingered and fundraising was still frigid. Across every aspect of current conditions measured, assessments of the industry were deeply negative. In their own words: “I am hoping that we have hit bottom. We’ve got to start moving in the other direction.” “It has to get better or there will not be a biotech industry.” The industry was most downbeat about the regulatory environment, which a striking 83% of respondents said had deteriorated. Respondents voiced frustration over whipsawing tariffs, uncertainty over IRA price negotiations, cuts to research funding and a government shutdown that temporarily halted new drug filings. Three in five BPSI respondents said business conditions had deteriorated from a year ago, while only one in five said they’d improved. The funding climate was even bleaker. Those assessments align with the retrenchment seen across venture capital and the continuing wave of restructurings through mid-2025 — from consolidation of platform biotechs like Verve and Denali to major cost-cutting programs at Bristol Myers Squibb and Pfizer. Improvements in Q4 While scars from the post-pandemic biotech cleanse were still fresh, conditions were improving rapidly while the BPSI was in the field. By the end of October, the XBI biotech stocks had climbed 60% from the lows in April, driven by a surge of global inflows, easing rates and a new wave of competitive M&A takeouts culminating in the $10 billion tug-of-war over Metsera by Novo Nordisk and Pfizer, which ultimately won out. Shifts in sentiment were happening so quickly that BPSI survey results consistently improved over the course of several weeks. The mood shift was also reflected in assessments about how conditions will evolve over the next 12 months, an outlook that was more upbeat than assessments of current conditions. Decoupling of Expectations Taken together, the BPSI paints a picture of an industry emerging from triage. Current conditions are much worse than a year ago, but expectations for the coming year are less gloomy. This decoupling of expectations suggests that confidence may be returning ahead of fundamentals. The biggest improvements between current and future conditions emerged in the categories of general business conditions and the funding climate. These shifts can be viewed as a proxy for risk appetite returning to the edges of the market. Respondents say capital markets will continue to thaw in 2026, and dealmaking will pick up. So, too, will hiring. In their own words: “Unprecedented uncertainty due to governmental actions may provide opportunities for some.” “It can't stay bad forever.” “Belief in science and the dedication to improvement of human health will keep us driving forward.” Overall expectations for the next 12 months still tilt negative, but a solid majority predict that at least the most painful part of the biopharma reset is over. The top reason given for optimism right now: the pace of innovation, an answer given by 20% of respondents. Biopharma Expectations Turn a Bit Less Bleak Relative scores for future expectations, though still tilting negative, are much improved over current conditions. Scores below 100 reflect negative sentiment. Current conditions Expectations for next year Neutral sentiment Radar chart requires JavaScript. Note: BPSI survey of Endpoints subscribers Oct. 6 – Oct. 17, N=1457. Source: Endpoints Signal Keep an Eye on the Subindexes The BPSI is made of two combined subindexes: Current Conditions and Future Expectations. Each five-question subindex is calculated by subtracting the average percentage of negative responses from the average percentage of positive responses and adding 100. The scores are then reduced by 10% to account for well-established positivity bias in economic sentiment surveys. (See Methodology for details.) The two subindexes are worth monitoring: The changing relationship between them could offer early indications of consequential shifts in biopharma. This inaugural report of the BPSI sets a baseline; future updates will track each of the three indexes over time. The overall BPSI is weighted 60% to future expectations and 40% to current conditions in order to provide a forward measure of industry mood. Differences of Opinion The mood in biopharma varied significantly by subsector. In general, sentiment was more upbeat the farther the organization’s focus veered from the lab. Academia was harshest in its assessment, followed by pharma and biotech companies, then contracting services like CDMOs and support services, including lawyers and public relations consultants. The most positive of the bunch: Investors. In their own words: “The weakest companies are (mostly) gone. So this is a solid foundation from which to build." "While M&A and public market activity have increased dramatically in the past few weeks alone, early-stage financings (seed to Series A) are still at market lows with the exception of a few megaround incubations.” “Access to capital still dominates decision making, and the capital gatekeepers are too reactive.” For biopharma investors riding high on the recent rebound in their portfolios, Q4 2025 sentiment is about what would be expected in an average year for biopharma. Investors and people in finance were practically ebullient about prospects for the next 12 months. Sentiment was worst among academics, amid some of the most turbulent times in modern history for US research funding. This year, federal grants were slashed and trials halted, new restrictions on international research partnerships took effect, and immigration rules tightened for postdoctoral scientists. The policy environment made long-term planning difficult, and academia’s outlook for 2026 remains the lowest in the BPSI. In their own words: “The biopharma industry has new directives on an almost daily basis. It is hard to be optimistic unless this inconsistency slows down and politicization of health information stops.” “Things are looking better in the public markets, but the private markets are still in the doldrums.” View From Above Even at pharma and biotech companies, in-house scientists were the most downbeat. On the flip side, C-level executives, who accounted for a quarter of BPSI results, were significantly more positive than the people who work for them. Split Outlook One of the starkest splits in sentiment in the BPSI divides Asia Pacific and the West. In 2025, the Trump administration injected policy uncertainty into an already fragile post-pandemic downturn. At the same time, Xi Jinping pressed ahead with China’s decades-running bid for global leadership — expanding government incentives for drug innovation, easing trial restrictions and accelerating approvals. In their own words: “If American biotechs cannot figure out how to develop drugs faster, cheaper, and better, then our leadership in innovation will wane.” “There is an inevitable crisis of innovation in USA over the next 5 years. China is loving how this story is playing out.” China’s biopharma sector is surging, BPSI respondents said, just as momentum in the West falters. There’s even a sense that China’s relative success was amplifying the sense of stagnation elsewhere. The contrast shows up clearly in the data: When asked to name the biggest reasons for optimism or pessimism in the industry, “Innovation in China” was the only factor to land in the top five for both lists. Beyond the core BPSI metrics, we also took the industry’s pulse on four forward-looking fronts: dealmaking, investment returns, AI and innovation.Dealmaking and Stock Performance Dealmaking in biopharma this year has been brisk but selective. Buyers concentrated capital on a smaller set of late-stage assets while letting licensing carry more of the discovery risk. After the reset year of 2024, companies came ready to spend: Sanofi moved on Blueprint Medicines for $9.5B, Novartis snapped up Avidity for $12B, Pfizer bought obesity player Metsera for $10B, and Merck bought Cidara Therapeutics for $9.2 billion. Most bets are aimed at plugging pipeline gaps or doubling down on the industry’s hottest themes — obesity, immunology, gene therapy and AI-driven technologies. In their own words: “While it's expected that private/public transactions will recycle capital to early-stage companies, this activity has waned and funds have instead been deployed to in-licensed clinical-stage assets. For innovation to continue, we must invest in new biology, new modalities, and capital-efficient models at the earliest stages.” “More selective investment = higher quality innovation” “Loss of exclusivity will drive dealmaking and attract new capital to all segments, spurring future innovation. But I also fear a stock market crash.” Acquisitions rose sharply in the third quarter, almost doubling Q2, with 22 deals totaling $36 billion, according to DealForma. Those figures aren’t setting any records, but they put 2025 on track to triple the dealmaking seen in 2024. Confidence is building, too. Nearly 60% of BPSI respondents expect the pace of strategic transactions to accelerate over the next 12 months, while just 12% foresee a slowdown. One of the clearest measures of industry health is stock performance. By that measure, the past half-decade has been brutal for biopharma. From the pandemic peak through the 2022–2025 washout, biotech investors have absorbed a historic drawdown: collapsing valuations, vanishing IPOs and forced consolidations. While the broader stock market marched upward, the XBI biotech stocks spent years scuttling across their post-pandemic floor. In the last five years, the XBI fell roughly 10%, while the XPH pharmaceuticals eked out just a 5% gain. Over the same stretch, the broader S&P 500 soared 90%. Could this be the pivot point? Over the next five years, 61% of BPSI respondents expect higher returns than in the previous five. While the bar for higher returns is low, the outlook sounds an upbeat note, given the broader sense of caution in the BPSI. Artificial Intelligence & Innovation Artificial Intelligence has been widely used in biopharma R&D for years in the forms of machine learning and predictive modeling — long before the current wave of hype around large language models. That history gives the industry a more measured view of today’s AI news boom. Some see echoes of past tech cycles that delivered more press releases than breakthroughs. In their own words: “The AI bubble will burst, making proven biopharma innovations more attractive to investors than AI speculation.” “Companies need to take advantage of these brilliant minds vs. taking swings with AI.” Still, there’s a sense that something is shifting. The tools are maturing, and what once lived in pilot programs and niche discovery work is starting to move into the daily workflow. Nearly seven in 10 BPSI respondents now expect AI to speed up drug discovery within the next year. For years, biopharma executives have worried that innovation was slowing — that the industry was spending more but discovering less. The latest BPSI results suggest that mood may be starting to shift. A plurality of respondents now see signs that the pace of scientific and technological progress is picking up, even if no one’s ready to call it a boom. The positive sentiment around innovation, however, is far from unanimous. Thirty-nine percent say innovation is moving faster, while 36% think it’s holding steady, and 26% believe it’s slowing down. The division captures a broader tension across the industry: optimism about new tools like AI and gene editing, tempered by concerns over regulation, deployment of capital, and the long road from discovery to market. The Source of Biopharma’s Funk When asked to name the biggest reasons for pessimism in the industry, respondents pointed overwhelmingly to politics. Nearly half cited the political environment as their top concern — far outpacing every other factor. Beneath that headline, the next four items — trade tensions, drug pricing, regulation, and even the role of Chinese innovation — all trace back, in one way or another, to questions of governance. The result reflects a moment of unease shaped by the administration’s often antagonistic stance toward the industry and to global trade at large. Pricing threats, tariffs, regulatory unpredictability, and a rising skepticism toward science itself have merged into a unifying theme: Policy risk is the dominant force shaping sentiment in biopharma. If pessimism is clustered around politics, the reasons for optimism in biopharma are more diffuse: the quickening pace of discovery, the growing utility of AI, a revived dealmaking climate, and a friendlier cost of capital. Together, they sketch a sector that sees a clear path forward. In their own words: “We're at a point where we can have more impact on human health than any other time in history, how does that not win out in the long run?” “Obesity therapies and all the comorbidities that it affects — transformational.” “Belief in science and the dedication to improvement of human health will keep us driving forward.” “Innovation in China” emerged as one of the defining themes in the Q4 2025 BPSI results. It was the only factor to appear among both the top reasons for pessimism and the top reasons for optimism — pessimism driven by frustration and fear of falling behind, optimism fueled by the sense that China is helping to push the industry forward at a pace perhaps unique in the history of life sciences. It’s a reminder that biopharma’s outlook isn’t defined by ideology or geography so much as momentum — wherever the science and capital are moving fastest. For all the gloom still hanging over the sector, there are hints of recovery in biopharma’s collective psyche. The mood is cautious, but no longer paralyzed. Whether that fragile rebound in confidence turns into something lasting will hinge on what happens in 2026. If it translates into real investment, hiring, and scientific momentum, this quarter could mark the bottom of a cycle. If not, it may prove just another head fake in biopharma’s long, uneven recovery. Methodology The Biopharma Sentiment Index (BPSI) provides a disciplined, forward-looking measure of confidence across the global biopharmaceutical industry. The structure draws inspiration from the University of Michigan’s Consumer Confidence Index, adapting that framework to the unique dynamics of life sciences. The survey universe is drawn from the Endpoints subscriber base, which comprises a wide cross-section of the global biopharma community. The sample includes investors across venture, private equity, and public markets; C-suite and senior executives; clinical and R&D staff; commercial employees; and policy and regulatory professionals. Company types span biotech, large pharmaceutical firms, CROs, CDMOs, generics manufacturers, and financial institutions. Access requires an Endpoints account to ensure that all responses are tied to verified industry participants. Each quarterly survey seeks a minimum of 1,000 completed surveys (1,457 for Q4 2025). Responses are analyzed by role, company type and geography to identify significant categorical variations. The survey is conducted online during the first few weeks of the calendar quarter. Respondents are asked, via emailed invitation, to complete a short survey that balances rigor with ease of completion. The median time to complete the survey was just over three minutes. Survey Design The BPSI survey consists of five paired questions that form the backbone of the index. Each question is posed in two forms: one focused on current conditions and another framed as expectations for the year ahead. Responses employ standardized three-point scales — such as “Better / Same / Worse” — with slight variations to align with the wording of the question. A variation of “Don’t know” or “Not applicable” was always available, and those responses were excluded from scoring. Creating the Baseline The Biopharma Sentiment Index (BPSI) draws inspiration from the University of Michigan’s Consumer Sentiment Index in its overall design: a small set of core sentiment questions split between current conditions and future expectations, and an index value constructed from diffusion-style scoring. However, the focus of questions, wording, and scaling system is unique to biopharma and was developed independently by Endpoints Signal. Diffusion scales like the BPSI are excellent at capturing breadth of sentiment, but they come with a well-established positivity bias, particularly in the context of business sentiment measures. The share saying “better” tends to exceed those saying “worse” — even in neutral years. To correct for systematic bias, we normalize the BPSI to “100 = neutral” footing. Readings significantly above or below the 100 baseline should indicate net optimistic or pessimistic conditions. To determine our rebasing factor, we analyzed the long‑run experience of the University of Michigan’s consumer sentiment series. Michigan uses its own version of weighting — by indexing a score of 100 to a single base year: 1966. This formula for rebasing has been found to significantly overcompensate for positivity bias, resulting in an average consumer sentiment score of roughly 84.5 instead of 100. Using Michigan’s decades of publicly available data, we can calculate a rebasing factor that should put us much closer to our intended 100 = neutral baseline. From the historic records, we calculate that the average un-weighted per-question diffusion score in Michigan’s index is 111. From there, we arrive at a simple neutralizing multiplier of .9 (𝑘 = 100/111 = 0.9), which should more accurately result in “100 = neutral” scaling. This rebasing method is simple, keeps the index results closer to the raw data, and is supported by an extensive record of data. Index Construction The five current-condition questions are used to create the Current Conditions subindex (BPSI-CC), while the five forward-looking items are averaged to form the Expectations subindex (BPSI-EX). Each subindex is formed by taking an average of the five RS values and rebasing to 100. These subindexes are then combined into the headline BPSI through a weighted formula — 40% current conditions, 60% future expectations. BPSI-CC = ((average RS_CC) + 100) * 0.90 BPSI-EX = ((average RS_EX) + 100) * 0.90 BPSI = (0.4 * BPSI-CC) + (0.6 * BPSI-EX) The heavier weighting on expectations mirrors the methodology used in the Michigan consumer confidence framework and reflects the greater importance of forward-looking sentiment for forecasting purposes. The first full wave of the survey establishes the base period. Subsequent waves are reported both as absolute scores on the “100 = neutral” scale and as quarter-over-quarter and year-over-year comparisons. While the “100 = neutral” scaling provides a key reference in the early quarters of the BPSI, it’s likely that quarter-over-quarter comparisons will ultimately take precedence, just as they have with the Michigan index. To keep the BPSI responsive to current issues, each quarterly wave includes a small set of “pulse” questions. These rotate quarterly and cover topical issues such as the outlook for M&A, the anticipated productivity impact of AI, or future returns on investment. The pulse questions provide context for the BPSI report, but are not factored into the headline sentiment scores. At least one open-text prompt is always included, in this case asking respondents to identify factors lifting or dampening their optimism. These qualitative responses provide nuance and color to the quarterly reports. Data Quality and Checks Several safeguards are in place to ensure the quality of responses. For example, results are screened for duplicate submissions by login-defined URL and are checked for failing to meet a minimum completion time while “straight-lining” answers. Additional safeguards may be taken as necessary. With each release, the report discloses sample size and any methodological changes so that users can interpret the index transparently. To ensure transparency, a full methodology is updated with each quarterly report. This appendix includes the core-question wording, demographics, response distributions and indexing formulas. The consistent application of these methods will ensure a reliable measure of industry sentiment. Citing the BPSI The BPSI was created to be a tool for anyone with an interest in biopharma. Endpoints welcomes you to use our charts and data, with credit given to Endpoints Signal. When possible, please include either a hyperlink to this report or the full URL so others may discover it, too: https://endpoints.news/biopharma-sentiment-index-q4-2025/ If you have any feedback about the BPSI or ideas for future pulse questions, drop us a line at signal@endpoints.news. Signal is the new intelligence arm at Endpoints News. Read more at Endpoints Signal.