Pre-RevenueBiotech:Volatility,Deals,andWhytheScienceKeepsUsIn

Take a deep breath. Maybe meditate a little.

If you are running a pre-revenue biotech portfolio right now, you already know what we mean. The volatility is not for the faint of heart. Between the market’s ongoing AI obsession and an increasingly unpredictable global political environment, the swings in this space are enough to give anyone genuine heart palpitations. This is not investing for the passive or the impatient. And yet. There are real reasons for optimism when you step back and look at the broader investment landscape honestly.

Big pharma is writing checks. Deal activity is accelerating, particularly on derisked assets, but increasingly earlier in the development cycle as large players scramble to replenish aging pipelines. Every completed deal creates a new wave of winners with fresh capital to redeploy and the confidence to move down the risk curve. That money does not stay on the sidelines. It filters through the food chain and eventually finds its way to the compelling early-stage science that we spend our time identifying.

The regulatory environment is also shifting in a meaningful direction. The removal of Makary from FDA leadership was, in our view, long overdue. A regulator willing to bury mistakes to protect his own standing is a regulator who slows innovation and costs lives. The incoming FDA leadership appears genuinely committed to helping American biotech compete on the global stage. That matters enormously for the companies in our portfolio and the patients waiting on their pipelines.

Then there is the science itself. Every time we consider scaling back our exposure to this space, another company walks through the door with technology that stops us cold. The pace of genuine innovation in oncology, immunology, and gene therapy right now is staggering. It is not hype. The biology is real and it is moving fast.

The elephant in the room, of course, is Chinese biotech, and some individual biotechs stand to benefit enormously from that dynamic. But it requires careful watching. The geopolitical dimension adds a layer of complexity that pure science analysis alone cannot capture, and investors who ignore it do so at their own risk.

We are not scaling back. We are paying closer attention.

As always, these are speculative positions in pre-revenue companies. Any of them can implode. We strongly advise you to do your own due diligence before following any of our positions.