Ep. 342 - 2026 Biotech Kickoff

The New Year begins with biotech running along parallel storylines. There’s cause for optimism as the industry’s financing gears have begun to churn again and innovation remains as strong as it has ever been, while there's cause for concern as the world’s most stable, progressive, science-based regulatory system has become unpredictable amid new leadership at HHS, FDA, and NIH. On the first episode of the BioCentury This Week podcast’s seventh year, BioCentury’s analysts assess the state of play for biotech in the U.S., Europe, and Asia.
The discussion ranges from recent changes at NIH to what’s next for rare pediatric disease priority review vouchers, and from Europe’s opportunity as FDA enters uncertain terrain to Japan’s evolving biotech landscape.

Early bird rates for BioCentury and BayHelix’s fifth East-West Biopharma Summit end Friday. Act now to join investors, dealmakers and innovators in Seoul this March to source innovation from Asia, or accelerate your own pipeline by finding the right Asia partner.

View full story: https://www.biocentury.com/article/657978

#BiotechOutlook #FDAUncertainty #GlobalBiotech #RarePediatricDiseasePRV #NIHLeadership

00:00 - Introduction
01:46 - 2026 Outlook
03:56 - Policy Landscape
11:48 - Priority Review Vouchers
15:03 - Global Perspectives
16:57 - Spotlight on Japan
21:55 - European Biotech Opportunities

To submit a question to BioCentury’s editors, email the BioCentury This Week team at podcasts@biocentury.com.

Chapters

• 0:00 Introduction
• 1:46 2026 Outlook
• 3:56 Policy Landscape
• 11:48 Priority Review Vouchers
• 15:03 Global Perspectives
• 16:57 Spotlight on Japan
• 21:55 European Biotech Opportunities

Transcript

0:00

[AI-generated transcript.]

Jeff Cranmer: 0:02

Welcome to Biotech 2026, as the BioCentury This Week podcast kicks off its seventh season. We have some opening thoughts for the year in biotech from Editor in Chief Simone Fishburn and Washington Editor Steve Usdin. Along the way, we will talk about how advocates are regrouping after the Senator from Vermont, Bernie Sanders has blocked Pediatric PRV reauthorization and we'll take a look. At the Land of the Rising Sun Japan biotech is looking to level up. Before we get to all of that, hey, BioCentury's is hosting its 5th East-West Summit in Seoul this March. Early bird rates expire on Friday. Come join us in biotech's next up and coming region, source innovation from Asia or accelerate your own pipeline by finding the right Asia partner. And if you wanna learn more, look for me, look for Josh at JP Morgan next week. We'd be happy to tell you all about it. And if you're planning to wander around the soggy streets of San Francisco next week, look no further than BioCentury's JPM Guide. That's Jpmguide.com, to help you navigate all of the conferences and receptions and satellite meetings that will be kicking off, as early as Saturday. Alright, let's cut to the chase. Simone, Steve, Happy New year. Simone, how are you looking at biotech as we kick off the year? We've done a lot of year end stuff. you can check out The Best of BioCentury. You can check out our analyst picks on BioCentury.com, but now we're moving on. We're looking ahead. Simone, where's your head at?

Simone Fishburn: 2:10

Well, first of all, I want to tell you, Jeff, that my phone reliably informs me that we will not be walking around the rain or soggy streets next week San Francisco. I've got lots of little sun pictures. Therein lies the story of 2026. So as we got onto this call, I was telling Steve how I was kicking off my letter from the editor with a lot of good news, and he said that is the split screen of 2026, which is the theme we are going with because there's really reason. On the financial front and the biotech funding front for optimism. We've had a good run at the end of 2025. Obviously we don't know how sustainable it is, but follow-ons are up the XBI ended up even so, you know, used that word IPO few times. There's generally a feeling that biotech is sort of coming outta the woods. Stephen Hansen is gonna be writing a story saying the bear market is over. We can look at approvals, which were a little down from the year before FDA, drug approvals, but really pretty, pretty robust there. if you think that generally the number of approvals per year is a, is a good number. so yeah, there's a, a lot of positive momentum within biotech. People seem to have shrugged off, absorbed the tariff uncertainty and all the rest of that and, and shrugged it off. And so the gears, the financial gears of biotech are, still churning. And now I'm gonna throw it to Steve who's gonna give us the other split screen kind of reality

Jeff Cranmer: 3:45

Well first, don't sleep on innovation. I mean, everybody we talked to we had Stelios on. Uh, they talk about how the science has never been better, the innovation's never been better. So I did wanna make a pitch for what's happening in, in the labs before, uh, Dr. Gloom and Doom, uh, joins us. See, Steve's not all that bad. He is, uh, he, he is, he, he might be a little more chipper. He is just back from Argentina. he's seen, maybe he's seen the light, Steve.

Steve Usdin: 4:17

I don't know about the light. Look, the, the thing is, we're actually, we're, we're kind of going into an experiment, right? So the thesis for biotech and for the life sciences for the last couple of decades has been that the United States had a competitive advantage because it had the most stable, progressive, science-based regulatory system in the world. Because, it invested generously in. basic research that really created the engine. And that, that, that basic research then was translated into biotech companies, that generated innovations, that then were commercialized by either bigger biotech companies or, pharma companies. We're gonna be seeing a lot of enthusiasm, around the, the finances in, in 2026. And as Simone said, a split screen because there's also a lot of concern about some of these fundamental pillars of, of the industry. Let's start with FDA. there's tremendous uncertainty about what FDA is going to be doing, going forward. The Center for Drug Evaluation and Research now is being directed by Tracy Beth H who has regulatory experience, no qualifications for the job other than political fealty to Marty Makary, the FDA Commissioner, and the vision of Robert F. Kennedy Jr. The HHS Secretary. There's likely to be a great deal of uncertainty. As I said at at FDA. There's also a sense that the Commissioner's National Priority Voucher Program is going to create different kinds of flows at FDA, it's gonna make it more unpredictable of what's gonna get approved and in, and what speed. It's coming on top of a, a, a situation where there's, there's large numbers of FDA staff who have left the agency over the last few months, making it much more difficult for the agency to do its routine work. Um, it's going to be prioritizing work around the, uh, these, um, priority vouchers. and it's, it's unclear what that's gonna mean for other kinds of, of activities. Then shifting over to, um, to NIH, which has really been the you know, kind of the the nursery for, um, innovation in, in the United States. There's tremendous amount of uncertainty at, at NIH.

Simone Fishburn: 6:31

Steve, um, just, I know there was recent news from NIH. Tell us about the latest thing in terms of one of the directors at one of the institutes at NINDS, right?

Steve Usdin: 6:41

Yeah, that's right. so it's, it's actually quite extraordinary. On December 30th, Jay Bhattacharya, the Director of NIH, sent out a memo announcing that Dr. Walter Koroshetz, will be concluding his service as Director of the National Institute of Neurological Disorders and Stroke. His last day is gonna be January 24th. The extraordinary thing about it is that Bhattacharya wrote in the memo that he supported Dr. Koroshetz. He wanted Koroshetz to stay. And he said that Koroshetz's performance as Director has been exceptional. However, the Department of Health and Human Services has elected to pursue a leadership transition. That's actually, if you, if you think about it, basically what Bhattacharya is saying is that he's not running NIH, Kennedy is.

Simone Fishburn: 7:28

Yeah, I have a couple of questions about this one. I mean, yeah, it's extraordinary on two fronts. One is that's really like saying I'm not making the decisions here. I think we heard that very early on in his tenure when he joined, and they, you know, there'd been a lot of people laid off and he said, well, I wasn't behind all of that, but, but he wasn't really, you know, um, he, he hadn't been there very long. Now he's been, uh, I can't remember Steve at least six months, maybe nine. I, I forget exactly when he took the role. So that's extraordinary. And the other thing is that it is really saying in black and white that this is a political decision. I have now one follow up question for you, because I know, in our, one of the pieces end of year pieces you projected about FDA and how long RFK Jr. might stay in his role at HHS. Do you think that this all goes is badly for, for Dr. Bhattacharya or not necessarily?

Steve Usdin: 8:24

It's hard to predict what's gonna happen with Bhattacharya. But I, my sense of it is that Kennedy is probably going to be out by this time next year. I think he's not gonna last much longer than the midterms and all of the public health leadership thats closely associated with him is likely to follow. And, and some of them may leave before he does, but there's a tremendous amount of damage that has been done and that will be done over the course of the next year. So I, I'm not sure that that's really something to be sanguine about at all.

Simone Fishburn: 8:59

I mean, it's just that Jay Bhattacharya is an acolyte, you know, he was from Stanford. He is part of the group that had a narrative around government's actions with COVID, and suppression of voices and so on. And I think he entered NIH claiming that he was going to foster open communication and people shouldn't be scared of, what they wanted to say. we know that that's not actually really born out, but, but I'm talking about something different here. It really seems that there's now daylight between him and the administration on this. So I don't really know how to read that. Does that just mean that he's gonna continue to roll over and do what the administration or at least, uh, the head of HHS wants or will he at some

Steve Usdin: 9:48

Absolutely

Simone Fishburn: 9:48

or will he at some point say, this isn't for me.

Steve Usdin: 9:51

no ab absolutely, he's, he's given no evidence that he's going to, um, stick up for, um, science or for the scientists at NIH. I don't think that this is the last director who's going to be terminated regardless of what, um, Bhattacharya says. And I think that it's, it's deeply concerning. Look, this is the sixth largest Institute at NIH. It does extraordinarily important work, and it's going to be turned over we don't know who, but you can bet it's gonna be somebody who, believes in Kennedy's philosophy and, and is going to be, you know, subservient to Kennedy. The Eye Institute, um, director may be the next one to go. And so on down the line, this is part of a, in an upheaval that's going to take a very, very long time to correct if it, if it's possible ever to correct it. And it is not losing.

Simone Fishburn: 10:45

Question though, Steve, I just wanna jump in. You've mentioned a couple of other folks, but going back to the head of NINDS, can you just outline if there were specific things you can point to that are counter to the philosophy of this HHS.

Steve Usdin: 11:00

I don't know. And I, and the people I've spoken with at NIH don't know either. It's really baffling. He is a highly respected scientist. He played as Bhattacharya noted in his memo announcing his departure Koroshetz's played a leading role in the NIH Brain Initiative, guiding high risk, high reward research that's expanded our ability to map brain cells and circuits, link neural activity to behavior and lay the groundwork for more precise interventions across neurological and psychiatric diseases. He was involved in partnerships that cut across NIH. I think this is just part of an anti-science agenda, emanating from Robert F. Kennedy Jr. I don't know that there's any particular thing that, Dr. Koroshetz did or represented that led to his being forced to leave.

Jeff Cranmer: 11:48

Okay, Steve. You had a story last week about, what's happening with the pediatric vouchers Priority Review Vouchers. This has been going on for some time now. Can you bring us up to speed, on what the latest is?

Steve Usdin: 12:05

So this is Priority Review Vouchers for, companies that develop drugs for rare pediatric conditions. There's broad bipartisan support. There's broad support among patient advocates among the tiny biotech companies that rely on PRVs to bring therapies for rare cancers, for rare neurological conditions and other conditions forward. And there have been an extraordinary lobbying campaign or advocacy campaign that had brought republicans, democrats, conservatives, liberals, everyone across the board in Congress together to want to reauthorize the PRV program. On the last day of the Senate session this year, there was an attempt to pass it, it needed, um, universal, consent. And, um, Senator Sanders, Bernie Sanders, independent from Vermont, opposed it. He blocked it. He said that he was blocking it because he wanted the Senate to vote in favor of some unrelated healthcare provisions. He knew, when he stood up and did that, that there was no chance, uh, that the Senate was going to do that. The things that he's asked for would cost billions of dollars. They haven't been, debated and they haven't gone through the normal order that would be needed to consider some of those things. And even in the unlikely event that the Senate had agreed to his demands, it wouldn't get through the house. You know, so, he, he wasn't negotiating. He was basically vetoing the reauthorization of Priority Review Vouchers. Individual patients who I've spoken with and patient families are devastated by it. But they're, um, they're going to, to, to move forward. There's an attempt now to get the PRV legislation attached to a continuing resolution that Congress has to pass before the end of January in order to prevent a government shutdown, or if there is a government shutdown, there'll be an attempt to attach that to whatever legislation is passed to reopen the government.

Jeff Cranmer: 14:09

All right. Thanks for that, Steve. We're gonna take a quick break and we'll be back.

Alanna Farro: 14:15

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Jeff Cranmer: 15:03

We are back on the BioCentury This Week podcast. And just another reminder that the early bird deadline for East-West ends this Friday, January 9th. So reach out to us. We'd love to tell you more about the conference. Simone, we talked a lot about what's going on in the U.S. Take us a step beyond that.

Simone Fishburn: 15:27

Well, thanks, Jeff. to be thinking more globally than the US right now, and there are many reasons for that. First of all, I think that, no conversation in biotech is complete without talking about China. BioCentury has been talking about China for a long while now. Frankly, I would be delighted if I could go the entire 2026 without somebody telling me that the quality of the data from China isn't really that good. It's nonsense, and that they don't really do innovation, that's nonsense. It's nonsense. It ignores the very reality that China biotech is becoming more and more innovative and sophisticated this is partly because they are investing as we are not in the US in their life sciences sector. Having talked about investing in the life sciences sector, you can see other parts of the world really seeing that as an area to grow the U.K., Europe, we'll talk a little bit about Europe. And now as BioCentury's conferences reflect, South Korea is quite often mentioned as another place for early clinical trials. Uh, Australia Long has been one, and this idea of getting early clinical data fast is becoming more and more important in biotech and the US is not really putting itself as the destination to enable that. So we saw this in our survey, many people saying, actually we are handling FDA risk by taking our clinical trials overseas. I also wanna talk a little bit about innovation, but here is where I'm gonna throw to you, Jeff, because what we see is several other areas of the world that have been sort of dormant for a while, that have not really seen, I mean, China was like this to some degree. No one really saw it as a threat until it was, or an opportunity if you prefer. And so you've done a, a recent large piece that I want you to talk about in Japan, which I think everybody knows, has a sort of Japan pharma very strong foothold. But nobody had, has really, they've never really managed to foster a biotech ecosystem. But you seem to find that that's changing, right? Jeff? Tell us about that.

Jeff Cranmer: 17:37

Yes, Simone. Thanks for that. Japan, has long been a source of innovation, in biopharma behind the U.S. it's the number two country of origin for blockbuster drugs, after the U.S. But unlike the US all those blockbusters have come from Japanese pharma, as, you kind of alluded to there, and not the biotech. Um, talk to a lot of VCs from Japan and the US including, uh, Ken Horne of AN Venture Partners, Robert Weisskoff of F-Prime Capital. Both, have been going to Japan for a very long time. And what they've been saying is that they just have felt like the science is spectacular, but there's sort of this been this missed opportunity. And part of that is because everyone sort of, I think knows there's sort of, Japan's reputation is a bit risk off. there's the sort of the stereotype of the salary man, you join one company for life. Uh, it's kind of the antithesis of that biotech entrepreneurial spirit. And yet, all along there's been this great science coming out of Kyoto, out of Tokyo, out of Osaka the universities there. And they sort of go into these, or they have been going into these biotechs that they aren't necessarily set up to fail, but they're not set up to succeed. They're undercapitalized, they're led by academics, and they, they've sort of lacked the knowhow, the, the, the management, uh, knowhow, the VC leadership to get the innovation into proper sized biotechs.

Simone Fishburn: 19:21

Yeah, Jeff. I think most people know that Japan's behind the Seminole PD ones and many of the other big breakthroughs, but I think we also know from things like Nobel Prize that, you know, on the technology front, they've, they've in fact been pioneering areas like stem cells and that kind of research. So maybe you can just talk about, I think what's really, we've had the academics, we've, we've got the sort of know-how from the pharmas. Obviously what's been lacking is capital, right. And so VCs, so just maybe briefly just talk about, do you have sort of numbers of the way that that picture is changing in terms of Japan being seen as an investment opportunity?

Jeff Cranmer: 20:00

Yeah, I mean, um, in terms of numbers, we're starting to see some really large funds, um. AN Ventures has just raised the largest Japan dedicated fund. You have longtime players such as University of Tokyo. Edge Capital Partners, which launched in 2004, billion dollars in assets under management, just raised a$326 million sixth fund. And this is coupled by a lot of capital support from the Japanese government. They have a two for one matching program for programs backed by accredited VCs. And I I, I think the last point I wanna make, the, the one thing that I found really interesting is the sort of the new strategies that are taking place there. One, you have some companies like Fast Track Initiative, and Remiges Ventures. Both are building companies, based on IP from Japanese Academia. Remiges is deploying sort of an incubator model that it launched, uh, five years ago, where the firm's R Discovery unit kind of handles the nuts and bolts that, that generally trip up young biotechs. Brings each project forth until the point at which they can attract capital and sort of leave the nest. And then you have F-Prime, you have ANV among others. who are starting to build companies that, that marry, venture money and management chops from the US with Japanese innovation, and are building these companies that are, you know, right from the get go, global cross border companies that, have one foot in Japan, one foot in the U.S. leveraging the inexpensive R&D. capabilities and talents, and innovation out of Japan with, C-Suites from the U.S.

Simone Fishburn: 22:10

I think it's super interesting, especially when you hear things like for F-Prime, a lot of the western investors going in there. I'm gonna come back to Europe, bring the conversation back to Europe in a minute. But I wanna make this point because it's really important to BioCentury and it's one of the reasons why we were in China very early, really seeing the opportunity there because we do believe that this is a global business and biotech is a global business, so we do hold our conferences in these different regions of the world so that we can shine a light on that. I think the South Korea, the conference in Seoul, The East-West, which is in March, is gonna be super interesting. It does aggregate, or congregate, I should actually say, innovators and investors from other regions, but it also shines a spotlight on that. And bringing it back to Europe this year, we're actually in Prague, who doesn't wanna go to lovely Prague for Bio€quity in May. But I feel that, obviously I talk a lot about the U.K. and um, I know the U.K. as a, as a nation financially has a lot of problems right now. But everything that I listen to and read talks about investment in the life sciences sector. And Steve, I think you were early earlier talking about the European Union making a plane now recognizing the opportunity as the US makes it hard to do innovation, at least from a public investment point of view. And you know, Europe seems to be seeing that opportunity in terms of both investment and attracting talent. Did you have any thoughts to contribute there?

Steve Usdin: 23:42

Well sure. Yeah, I think obviously, people in leadership positions in Europe are looking at what's happening with regulatory agencies in the United States and with science funding, and seeing if there are ways that they can capitalize on it. Their high profile scientists are leaving the United States for positions in Europe. The EMA leadership has invited CEOs of pharma companies for a meeting with Emer Cooke the head of EMA, and, um, with the EMA's Chief Medical Officer, in April. I think that this is gonna be part of a, a larger effort for Europe to make a play for companies to invest in innovation in Europe. I'm gonna be talking on the podcast next week about the Biosecure Act. But I think that, you know, there, there are ways that that's going to, again, it's gonna create or could create competitive advantages for companies that in Europe that aren't necessarily subject to some of the restrictions in dealing with China that the US companies are feeling.

Jeff Cranmer: 24:40

Well thanks for that, Steve, Simone, let's hope it's an exciting year for biotech. I am, uh, confident we'll see a lot of great innovation and a lot of stories to watch in Europe, in Asia, and obviously the US as well. You can read some of BioCentury's year-end coverage our analysts picks and predictions The Best of BioCentury, uh, Legends Lost looking at the scientists, entrepreneurs and investors who left their mark on the biotech industry. Coming up soon, we'll have our annual look at the catalyst we are looking for in the coming year, as well as Stephen Hansen's 2026 Public Markets Preview. Thank you for listening. If you like what you're hearing, like, subscribe, tell your friends about us, send us a question. Kendall Square Orchestra provides the music for BioCentury This Week. The group connects science and technology professionals and other members of the Greater Boston community to collaborate innovate and inspire through music, while supporting causes related to healthcare and education.