Biopharma Job Market Turnaround Not Expected Until 2026, Experts Say

The biopharmaceutical industry continues to face challenges in its job market, with experts predicting a significant turnaround is unlikely before 2026. This outlook comes amid ongoing economic uncertainties, regulatory changes, and a slowdown in investment activity. Industry insiders point to several key factors that need to align for a recovery in hiring trends.

Funding and Investment Climate

The current investment landscape remains a critical hurdle for the biopharma sector. Audrey Greenberg, CEO and founder of AG Capital Advisors, notes that "funding is still very selective" with "a lot of capital sitting on the sidelines." The industry has seen a notable decrease in venture capital activity, with biopharma VC funding dropping 20% year-over-year in the first quarter, from $8.1 billion to $6.5 billion.

Ira Leiderman, healthcare managing director at Cassel Salpeter & Co., echoes this sentiment, stating that "funds with a lot of money are holding back, keeping dry powder for their portfolio companies." This cautious approach has led to fewer transactions being closed and a general slowdown in early-stage research and development hiring.

Despite these challenges, some regions have shown resilience. Philadelphia and the Greater New York City/New Jersey metropolitan area have secured significant venture capital funding for life sciences companies, with $6.5 billion and $12.5 billion respectively between 2019 and 2024.

Regulatory Environment and Political Uncertainty

Recent changes at the FDA have contributed to the industry's hesitancy. The agency's staffing reduction of 3,500 employees in April has led to drug review delays, creating additional uncertainty for companies navigating the regulatory landscape. Greenberg emphasizes the need for "regulatory predictability" as a key factor in job market recovery.

The upcoming election cycle is also casting a shadow over the industry's outlook. Leiderman suggests that the biopharma job market might see improvement after the 2026 midterm elections, depending on potential shifts in congressional control and their impact on policy-making.

Strategies for Growth and Hiring

As the industry navigates these challenges, companies are advised to adopt strategic approaches to growth and hiring. Greenberg recommends finding the right balance, cautioning against both underhiring and overhiring. She advocates for hiring "against real inflection points" and avoiding "short-termism."

For contract development and manufacturing organizations (CDMOs), timing is particularly crucial. Greenberg notes that these companies often need to hire "a bit ahead of need" to demonstrate capabilities to potential clients, with a typical timeline of "six months door to floor" for new hires to become fully operational.

Leiderman advises companies to focus on programs with the highest likelihood of success, emphasizing that "good data" is key to attracting funding and talent. This targeted approach may help businesses navigate the current climate more effectively.

While the short-term outlook remains challenging, Greenberg offers a positive perspective on the current state of the industry. "This isn't 2022, and that's a good thing," she remarks, describing the current market as "more rational" with leaner emerging biotech companies making "good decisions" and Big Pharma maintaining discipline. She sees the industry "scaling with purpose" in areas such as cell and gene therapy, AI, and manufacturing, setting the stage for "the next wave of innovation."