HSBC has released a lengthy, information-backed report on biotech (and genomics) investing for 1H2025, with a multi-year perspective.
Find the July 17, 2025 press release here. It's the third annual mid-year report.
Find the 68-page PDF here. (And track down that web page for earlier reports.)
Here's HSBC's top line summary:
- Many venture-backed companies finished 2024 struggling to secure new investor-led capital. During the first half of 2025, overall deal volume dropped, but mega rounds helped set a two-year high for invested capital during Q1.
- With questions, continued headwinds and uncertainty lingering from Q2, our 2025 Mid-Year Venture Healthcare Report takes a magnifying glass to the year so far.
For example, see page 26:
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AI CORNER
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Here's an AI summary.
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Here’s a detailed summary of the HSBC 2025 Midyear Venture Healthcare Report, aimed at your highly experienced genomics and biopharma readership.
The report provides a broad yet data-driven synthesis of 1H 2025 venture trends across biotech, diagnostics, computational biology, and pharma-tech, with key implications for genomics investors, platform companies, and those seeking alignment with biopharma development and commercialization strategies.
🔬 Executive Summary for Genomics-Savvy Investors
The HSBC Midyear 2025 Healthcare Venture Report breaks new ground by dissecting healthcare venture trends into detailed verticals with special attention to:
Computational biology (Comp Bio) as a distinct sector
Platform genomics companies across early-phase financing
Valuation dynamics and M&A/IPO exit timing
The intersection of R&D tools and biopharma investment behaviors
It’s an essential read for investors and genomics startups aiming to align their narratives and partnering strategies with what biopharma and financial markets are actually funding and acquiring.
🔍 What’s New and Notable
1. Comp Bio Is Breaking Out
The report formally recognizes Computational Biology (Comp Bio) as a standalone venture category, separating it from Dx/Tools and Biopharma. This reframing matters for genomics readers because many of today’s sequencing and bioinformatics firms now blur the lines between tools and platforms.
Valuations are climbing: Median valuations for Comp Bio deals reached $29M in 1H 2025, up from $7.4M in 1H 2023.
Key subcategories include protein design, IVF tech, and AI-driven drug discovery.
Investor attention is high even though exits remain rare; this implies long-cycle bets with strategic value.
2. Step-Ups, Flats, and Write-Downs
Across sectors, HSBC introduces a visual and statistical lens on valuation movement—step-up, flat round, or step-down—and correlates this with exit strategies and time to IPO. For genomics CEOs, this is a wake-up call to track post-money valuation inflation relative to performance and commercial traction.
3. Biopharma Partnering Themes
Even though biopharma investing slowed slightly, it remains top-heavy: the largest Series A round in 1H 2025 was $579M for a platform company at $1.8B valuation. The report distinguishes platforms from indication-specific companies and documents upward trends in cardiovascular and metabolic funding, while oncology remains robust. For genomics firms pitching to biopharma, aligning platform messaging with therapeutic value creation is key.
4. VC-Backed Exits Are Highly Selective
Both IPOs and M&A events reveal that only a few firms reach public markets or high-value acquisitions—and these tend to have:
Validated biomarkers or companion diagnostics
Demonstrable clinical outcomes
Strategic relevance to big pharma portfolios
A cautionary tale: one 2025 IPO in neurology raised $148M at a $428M post-money valuation—but traded down to a $60M market cap within months.
5. Pharma Tech as a Cohesive Sector
HSBC aggregates previously diffuse pharma enabler segments (supply chain, market access tech, digital R&D) under a new umbrella: Pharma Tech. This matters for genomics companies who offer platforms for trial optimization, AI matching, and lab automation—this is now a recognizable investment vertical.
🧬 Why This Matters to Genomics and Precision Medicine Players
Platform companies in genomics should recognize that biopharma continues to fund platform plays, but with increasing selectivity. Pitch decks should clearly articulate how the platform maps onto drug development pain points.
AI-driven genomics and multi-omic diagnostics live in a hybrid zone across Dx, Comp Bio, and Pharma Tech. Investors are increasingly comfortable with this hybridization, but companies must tailor their partnering strategies accordingly.
Understanding exit environments is essential for long-term positioning. This report reveals how post-money valuations at financing may or may not align with acquisition or IPO values. CEOs need to backtest their future scenarios with these datasets.
Cross-disciplinary collaboration is rising. As Comp Bio and Pharma Tech become recognized verticals, the old walls between "diagnostic" and "therapeutic" business models are breaking down—and the smartest genomic companies are navigating both sides.
🎯 Who Should Read This (and Why)
Genomics platform CEOs and founders: To understand where the money is moving and what exit multiples are realistic.
Investors in computational biology: For insight into a sector that is rapidly gaining legitimacy as its own venture class.
Pharma BD & alliance managers: To see where the strategic capital is flowing—especially into cardiovascular and protein engineering.
Venture partners and analysts: To benchmark deal sizes, syndication patterns, and how "step-up" valuations compare across cycles.
