BIO 2026: The Trends Reshaping the Future of Biopharma

The Evolving Role of AI in Reshaping R&D Strategies

AI was one of the most prominent themes at BIO 2026, with this year’s conference featuring the second-annual AI summit, alongside 20 sessions focussed on AI. A panel of experts from Eli Lilly, Charles River, Insitro, Chai Discovery, and Benchling spoke on how AI can be embedded into R&D workflows to enable the development of medicines that were previously impossible to create. They noted that the number of novel mechanisms entering pipelines has dramatically decreased over the past 24 months, with many companies “sticking to the status quo” when they should be challenging themselves to develop therapeutic programs that are truly differentiated and have the potential for greater clinical impact. They also highlighted the cutting-edge AI work their own companies are doing, including Eli Lilly’s TuneLab, a mutually beneficial platform that provides companies with AI/ML models in exchange for training data, and Insitro’s progress with AI-driven analysis of large-scale genetic datasets, which has enabled them to identify what may be true genetic drivers of ALS.

The theme of AI was not confined to the AI-specific sessions, with the second day’s main stage talk, featuring Ashley Magargee (CEO, Genentech) and Kimberly Powell (VP of Healthcare, NVIDIA), covering the exciting prospect of using AI to better predict the complexity of biology and the likelihood of success of a molecule. Investor enthusiasm is strong, with several high-value Series A rounds for AI-enabled companies. This includes Xaira Therapeutics’ 2024 blockbuster $1Bn round for their platform spanning from discovery to the clinic, and more recently, Converge Bio’s $25m round for generative AI solutions built on DNA, RNA, and protein sequences. Overall, discussions at BIO suggested that the industry has largely moved beyond debating whether AI has a role in drug development, with an increasing focus now on identifying where it can deliver measurable improvements in productivity, decision-making, and R&D success.

 

The Continued Shift of Innovation Toward China

The conversation around China has evolved significantly in recent years, and BIO 2026 demonstrated just how central the country has become to innovation and the industry’s future. China has been supported by sustained government investment, favorable policy initiatives, and regulatory reforms designed to accelerate drug development and streamline clinical pathways. In a panel discussion, Lesley Stolz (Head of West North America, External Scientific Innovation, Johnson & Johnson) noted that China has embraced AI and robotics much more rapidly than Western markets, a sentiment echoed by Brian Bronk (Global Head of BD, Sanofi) who noted that the pace and scale of growth seen in China has been dramatic, and that the US and Europe cannot keep up. In a separate panel discussion, it was noted that China has been instrumental in coming up with pragmatic solutions to problems in the industry, allowing molecules to rapidly progress from discovery to preclinical to first-in-human studies. Indeed, Weichang Zhou (CTO, Medilink Therapeutics) highlighted that the time to advance from an idea to clinical testing in China has reduced from three years to less than a year, a fact attributed in part to significantly shorter clinical trial enrolment times. It was agreed that the FDA’s recent announcement of Operation Trailblazer, an initiative designed to accelerate clinical development and encourage more early clinical trials to be held in the US rather than overseas, was an important step in strengthening US competitiveness.

Geopolitical uncertainty was also a recurring topic of discussion. Several speakers highlighted concerns around investment restrictions and regulatory requirements. This includes the COINS Act, restricting US investors from financing sensitive technologies in certain countries, which may be amended to include the biotechnology sector. There was a strong sentiment among speakers of “being agnostic as to where the medicine comes from and the possible risks to patients of limiting their access to potentially life saving drugs. With approximately one third of licensing deals in 2025 involving China, there was a broad consensus that restricting cross-border collaboration risks slowing innovation and ultimately limiting patient access to new therapies.

 

Patent Cliffs Driving a New Era of Partnerships and M&A

The challenge of multiple imminent patent expirations on the horizon was another key theme, discussed across multiple sessions, including a dedicated panel discussion with Alterome, Sanofi, Morgan Stanley, and Johnson & Johnson. Blockbuster drugs such as Sanofi’s Dupixent and Merck’s Keytruda are losing patent protection in the coming years, leaving pharma racing to fill these revenue gaps. As a result, many companies are turning to external innovation. Throughout the conference, licensing, collaborations, and acquisitions were consistently highlighted as critical tools to offset the impact of upcoming losses of exclusivity by accessing new assets. Panelists noted that while licensing remains a preferred route for many organizations, the current market environment is increasingly leading to acquisitions, particularly for later-stage, de-risked assets in the areas of oncology, immunology, and inflammation. Speakers pointed to a resurgence in M&A activity during 2026, with more than $135 billion exchanging hands across 200+ deals, with expectations that this level of activity will continue. Aside from M&A, organic growth was also highlighted as a key strategy being used by pharma to prepare for patent expiries coming over the next decade. Allison Kean (Global BD Search & Evaluation Team Leader, Pfizer), emphasised the importance of balancing inorganic growth, such as M&A and joint ventures for risk and cost sharing, with organic growth through internal innovation.

This balance is forcing pharmaceutical companies to be increasingly selective in how they allocate capital and prioritise therapeutic areas. Large addressable markets capable of delivering long-term growth are the goal, with I&I cited as one of the biggest industry trends of the moment, largely due to the success of Dupixent and Abbvie’s immunology portfolio. Oncology, cardiometabolic, and neurology were also cited as areas capable of generating future blockbuster revenues. Speakers noted that emerging biotechs remain central to this strategy, providing access to a significant proportion of the industry’s most innovative assets.

 

Emerging Biotechs Leading the Next Generation of Innovation

At a time when AI is reshaping R&D and major patent expiries are approaching, emerging biotechs are playing an increasingly important role in drug development and innovation. These companies are now responsible for 72% of the clinical pipeline intended for the US market, up from 55% the previous year, with a particular concentration in hot areas like immunology and less explored areas like psychiatry and ophthalmology. In comparison, large pharma are now adding fewer drugs to their pipelines despite significantly higher R&D spends. This dynamic reinforces the role of emerging biotech’s as the industry’s innovation engine.

Alongside the growing influence of emerging biotech’s, BIO’s Startup Stadium highlighted a new generation of companies pursuing highly differentiated science across a broad range of therapeutic areas. Across three days, 50 startups from seven different countries pitched in front of a panel of judges. Aside from trends in previously discussed areas such as AI and I&I, many startups were pursuing novel mechanisms rather than incremental improvements to existing ones. For example, Mangrove Therapeutics showcased their first-in-class therapies targeting a novel RNA-mediated master regulator of inflammation, whereas ENU Medicines spotlighted their first-in-class oral small molecule therapies for food allergy. The emphasis was repeatedly on creating these first-in-class medicines to address unmet patient needs. There was also an increased focus on rare diseases that have historically received limited industry attention. iNFixion Bioscience shared their antisense oligonucleotides for neurofibromatosis type 1, a rare genetic disease with no current cure, whereas AddGraft Therapeutics presented their autologous engineered skin cell therapy for the rare recessive dystrophic disease epidermolysis bullosa.

However, discussions also highlighted the challenges facing early-stage companies, particularly in raising pre-seed, seed and Series A financing in order to reach key value inflection points. It was stressed that the amount of capital going to these innovative startup companies is shrinking, as investors prefer to avoid risks and fund later-stage, de-risked assets, raising concerns about how early-stage companies will secure the capital required to progress. A panel discussion featuring four startup founders from BrainStorm Therapeutics, ANTA Biotech, Navega Therapeutics, and Esperto Medical, highlighted that grant funding and partnerships were key steps in bridging the gap to traditional venture capital.

 

Key Takeaways from BIO 2026

BIO 2026 highlighted an industry balancing short-term commercial pressures with the need for long-term innovation, in a time when early-stage funding is increasingly difficult to come by. Despite this, and other challenges including geopolitical uncertainty and looming patent expiries, there was a strong sentiment that 2026 and beyond could mark the beginning of a new era of growth driven by technological advances, strategic dealmaking, and the rise of emerging biotech companies. Across many of the discussions, a common theme emerged: innovation is becoming increasingly global, collaborative, and technology enabled. Ultimately, BIO 2026 highlighted the industry’s resilience and its enduring commitment to advancing novel, disease-modifying therapies that address significant unmet patient needs.