Report
Biopharma at a Crossroads: Where Investors Can Find Growth
The biotechnology sector is going through the longest “downturn” in its history, while at the same time science is generating revolutionary breakthroughs — from curing genetic diseases to drugs capable of dramatically improving the health of entire nations. Ilya Yasny, Head of Scientific Expertise at LanceBio Ventures, explains how this market works, where real breakthrough technologies are hidden, and how to distinguish them from unfounded hype.
The Rules of the Game: Why 9 out of 10 Drugs Fail — and How Investors Still Make Money
“We are in a very bad time for biotech in terms of financing. But any decline in investor interest today means fewer innovative drugs for patients tomorrow.”
Biopharma investments are a high-stakes game with paradoxical logic. To understand where opportunities lie, you must first accept its main rule: the overwhelming majority of projects are destined to fail.
“Statistically, about 92% of drugs that enter human trials never make it to the market,” explains Ilya Yasny. “That’s precisely why this field is so risky, and why investments here are called venture capital.”
From an investor’s point of view, the long road of drug development — from idea to pharmacy shelf — is essentially an exchange of money for information that reduces risk. At each stage (preclinical studies, Phase I, Phase II, and Phase III trials), the company spends more capital to run an experiment. The outcome either “kills” the project or validates it, reducing risk and enabling the next, larger funding round.
It is this step-by-step model that allows venture funds to operate successfully in such a risky environment. “Although the full cycle of drug development can take 10–15 years, our investment horizon is usually 3–5 years,” the expert notes. “We enter a company when promising animal data is available and help it reach a key milestone — going public. That IPO becomes our exit point and keeps the system working.”
Today, however, this well-oiled system has broken down. “Since February 2021, the biotech sector has been in the longest downturn in its history,” says Yasny. “Public markets have dropped, the IPO window has all but closed. Private investors don’t know how long they’ll have to wait for an exit, and risk appetite has decreased.”
This creates enormous pressure on small innovative companies. Yet, according to Yasny, it is precisely in such conditions that true science proves its strength — and the most interesting opportunities emerge. So where are they hidden today?
“Statistically, about 92% of drugs that enter human trials never make it to the market,” explains Ilya Yasny. “That’s precisely why this field is so risky, and why investments here are called venture capital.”
From an investor’s point of view, the long road of drug development — from idea to pharmacy shelf — is essentially an exchange of money for information that reduces risk. At each stage (preclinical studies, Phase I, Phase II, and Phase III trials), the company spends more capital to run an experiment. The outcome either “kills” the project or validates it, reducing risk and enabling the next, larger funding round.
It is this step-by-step model that allows venture funds to operate successfully in such a risky environment. “Although the full cycle of drug development can take 10–15 years, our investment horizon is usually 3–5 years,” the expert notes. “We enter a company when promising animal data is available and help it reach a key milestone — going public. That IPO becomes our exit point and keeps the system working.”
Today, however, this well-oiled system has broken down. “Since February 2021, the biotech sector has been in the longest downturn in its history,” says Yasny. “Public markets have dropped, the IPO window has all but closed. Private investors don’t know how long they’ll have to wait for an exit, and risk appetite has decreased.”
This creates enormous pressure on small innovative companies. Yet, according to Yasny, it is precisely in such conditions that true science proves its strength — and the most interesting opportunities emerge. So where are they hidden today?
The lecture by Ilya Yasny was organized at Harbour.Space University in Barcelona by Ekaterina Kotelnikova, founder of the Barcelona BiomedTech community.
Three Pillars of Modern Biopharma: The Key Growth Drivers of the Next Decade
Despite the overall market downturn, three areas in biopharma are undergoing tectonic shifts. These are technologies already reshaping how entire classes of diseases are treated — and creating new multibillion-dollar markets.
Obesity: A $100 Billion Market
The breakthrough of 2024, according to Science, was not gene therapy but a new generation of obesity treatments. Their development took years, but the outcome has been nothing short of stunning. Drugs such as Novo Nordisk’s semaglutide and Eli Lilly’s tirzepatide have shown unprecedented effectiveness in reducing weight.
“In 2023, this market reached $6 billion, and by 2035 it is projected to exceed $100 billion,” notes Ilya.
The potential goes far beyond weight loss. The receptors targeted by these drugs are found throughout the body, paving the way for much broader applications:
The “Software” of Life: Gene and Cell Therapy
If obesity drugs reshape metabolism, gene and cell therapies rewrite the rules themselves by targeting the root cause of disease. Until recently, this sounded like science fiction — but the first commercial products are already saving lives.
CRISPR: Editing the Code of Disease.
“In November 2023, a milestone was reached: the U.S. and the U.K. approved the first therapy based on CRISPR ‘genetic scissors,’” says Ilya. He cites the story of Victoria Gray, who suffered from sickle-cell anemia since infancy and has now lived five years without pain or symptoms after treatment.
The potential is enormous. Initially focused on rare monogenic diseases, the technology is rapidly moving toward mass-market applications. A key signal for investors was Eli Lilly’s $1 billion acquisition of a developer using CRISPR to “knock out” the PCSK9 gene in humans, which dramatically reduces “bad” cholesterol.
“Theoretically, everyone could have this gene removed to significantly lower the risk of heart attacks and strokes. That’s still the future, but the fact that Big Pharma is making such deals shows where the industry is headed,” says Ilya.
CAR-T: Training Immunity to Fight Cancer — and More.
Another revolutionary technology is CAR-T therapy, in which a patient’s immune T-cells are harvested, “trained” in the lab to attack a specific target (e.g., a cancer cell), and reinfused.
“For the first time in 50 years, this technology changed the standard of care for lymphoma, proving superior to bone marrow transplantation,” the expert emphasizes.
But the real surge of interest came recently, when German researchers published “astonishing” results of using CAR-T to treat severe autoimmune diseases such as lupus. Patients who could barely walk returned to normal life after a single infusion.
“Now, every company developing CAR-T for oncology has rushed into this field. It’s a potentially gigantic market, and we are only at the very beginning,” concludes Ilya.
Obesity: A $100 Billion Market
The breakthrough of 2024, according to Science, was not gene therapy but a new generation of obesity treatments. Their development took years, but the outcome has been nothing short of stunning. Drugs such as Novo Nordisk’s semaglutide and Eli Lilly’s tirzepatide have shown unprecedented effectiveness in reducing weight.
“In 2023, this market reached $6 billion, and by 2035 it is projected to exceed $100 billion,” notes Ilya.
The potential goes far beyond weight loss. The receptors targeted by these drugs are found throughout the body, paving the way for much broader applications:
- Prevention of cardiovascular disease.
- Treatment of kidney failure and nonalcoholic steatohepatitis (MASH).
- Promising data for Alzheimer’s prevention and treatment, as well as tackling addictions ranging from food to narcotics and alcohol.
The “Software” of Life: Gene and Cell Therapy
If obesity drugs reshape metabolism, gene and cell therapies rewrite the rules themselves by targeting the root cause of disease. Until recently, this sounded like science fiction — but the first commercial products are already saving lives.
CRISPR: Editing the Code of Disease.
“In November 2023, a milestone was reached: the U.S. and the U.K. approved the first therapy based on CRISPR ‘genetic scissors,’” says Ilya. He cites the story of Victoria Gray, who suffered from sickle-cell anemia since infancy and has now lived five years without pain or symptoms after treatment.
The potential is enormous. Initially focused on rare monogenic diseases, the technology is rapidly moving toward mass-market applications. A key signal for investors was Eli Lilly’s $1 billion acquisition of a developer using CRISPR to “knock out” the PCSK9 gene in humans, which dramatically reduces “bad” cholesterol.
“Theoretically, everyone could have this gene removed to significantly lower the risk of heart attacks and strokes. That’s still the future, but the fact that Big Pharma is making such deals shows where the industry is headed,” says Ilya.
CAR-T: Training Immunity to Fight Cancer — and More.
Another revolutionary technology is CAR-T therapy, in which a patient’s immune T-cells are harvested, “trained” in the lab to attack a specific target (e.g., a cancer cell), and reinfused.
“For the first time in 50 years, this technology changed the standard of care for lymphoma, proving superior to bone marrow transplantation,” the expert emphasizes.
But the real surge of interest came recently, when German researchers published “astonishing” results of using CAR-T to treat severe autoimmune diseases such as lupus. Patients who could barely walk returned to normal life after a single infusion.
“Now, every company developing CAR-T for oncology has rushed into this field. It’s a potentially gigantic market, and we are only at the very beginning,” concludes Ilya.
High-Alert Zones: Where’s the Hype and Where Are the Real Prospects?
In the wave of technological optimism, investors are constantly pitched new revolutionary ideas. But as Ilya warns, the ability to distinguish scientific potential from market hype is a core skill in biopharma. Some of the hottest topics of recent years demand particularly sober judgment.
Artificial Intelligence: A Revolution Postponed?
AI in drug discovery has become one of the most hyped themes. Companies promise faster and cheaper molecule design. Reality, however, is far more complex.
“The problem is that large language models, the ones everyone talks about, are trained on vast amounts of text and images. Pharmacological data, by contrast, is messy, scarce, and highly heterogeneous,” explains Ilya. “Models often ‘hallucinate,’ and rapid breakthroughs are unlikely.”
According to him, AI’s real value today lies elsewhere: in analyzing massive volumes of unstructured information, such as scientific publications, electronic health records, and clinical trial data.
“If AI helps us raise the success rate of drug candidates even slightly — say from 8% to 10% — that would be a colossal improvement with industry-wide impact,” he concludes.
Longevity: An Investor’s Trap
The idea of a “pill for aging” is another recurring headline-grabber. Ilya urges extreme caution with such projects.
“We believe fundamental science is not yet ready for radical life extension. Results in worms and mice are extremely difficult to translate to humans,” he says. “Unfounded hype in this area only damages trust in serious aging research.”
He cites Theranos as a textbook example of red flags investors should heed:
Artificial Intelligence: A Revolution Postponed?
AI in drug discovery has become one of the most hyped themes. Companies promise faster and cheaper molecule design. Reality, however, is far more complex.
“The problem is that large language models, the ones everyone talks about, are trained on vast amounts of text and images. Pharmacological data, by contrast, is messy, scarce, and highly heterogeneous,” explains Ilya. “Models often ‘hallucinate,’ and rapid breakthroughs are unlikely.”
According to him, AI’s real value today lies elsewhere: in analyzing massive volumes of unstructured information, such as scientific publications, electronic health records, and clinical trial data.
“If AI helps us raise the success rate of drug candidates even slightly — say from 8% to 10% — that would be a colossal improvement with industry-wide impact,” he concludes.
Longevity: An Investor’s Trap
The idea of a “pill for aging” is another recurring headline-grabber. Ilya urges extreme caution with such projects.
“We believe fundamental science is not yet ready for radical life extension. Results in worms and mice are extremely difficult to translate to humans,” he says. “Unfounded hype in this area only damages trust in serious aging research.”
He cites Theranos as a textbook example of red flags investors should heed:
- Lack of specialized investors: the board was filled with politicians and generals, not biotech experts.
- Total secrecy: no publications, no disclosed data.
- Reliance on big names: celebrities instead of scientific credibility.
“The more secrecy we see, the less trust there is. No publications, no solid science, and no sector-specific investors on the board — these are very bad signs”
Psychedelics: When Good Ideas Fail
Even scientifically promising areas can stumble against the harsh reality of clinical trials. A vivid example: the recent failures of companies seeking approval for psychedelic-based treatments for PTSD and depression.
“The issue was trial design,” explains Ilya. “It was impossible to ensure blinding. Patients — many with prior experience of these substances — immediately knew they weren’t on placebo after the first dose. This subjective factor is something regulators like the FDA cannot overlook.”
A New Player Changing the Rules
While Western markets wrestle with internal challenges, the global biopharma landscape is shifting rapidly — and China is the key driver of change.
“The era when China was just a generic producer is over,” emphasizes Ilya. “Last year, a third of all licensing deals by U.S. biotechs were signed with Chinese partners — an unprecedented level.”
Chinese companies are moving with remarkable speed in testing new scientific hypotheses, particularly in cutting-edge areas like gene and cell therapy. This dynamic has already reshaped the balance of power.
“China has overtaken Europe and firmly secured the number two spot worldwide, behind only the U.S. American experts are seriously worried they might lose first place within years,” says Ilya. For global investors, ignoring innovation coming out of China is no longer an option.
While Western markets wrestle with internal challenges, the global biopharma landscape is shifting rapidly — and China is the key driver of change.
“The era when China was just a generic producer is over,” emphasizes Ilya. “Last year, a third of all licensing deals by U.S. biotechs were signed with Chinese partners — an unprecedented level.”
Chinese companies are moving with remarkable speed in testing new scientific hypotheses, particularly in cutting-edge areas like gene and cell therapy. This dynamic has already reshaped the balance of power.
“China has overtaken Europe and firmly secured the number two spot worldwide, behind only the U.S. American experts are seriously worried they might lose first place within years,” says Ilya. For global investors, ignoring innovation coming out of China is no longer an option.
What Should Investors Do?
- Innovation is stronger than crisis. Despite financing challenges, the flow of fundamental scientific discoveries does not stop. Sooner or later, this will bring new therapies and market growth.
- Big Pharma will keep buying. Large pharmaceutical companies face looming patent expirations on their blockbusters. They critically need to replenish their pipelines by acquiring small innovative biotechs. This means M&A activity will continue, creating exit opportunities for venture investors.
- Capital is there — but only for the best. In today’s environment, only companies with excellent science and convincing data can raise funds.
- The key asset is expertise. Ultimately, success in biopharma investing is not about chasing hype, but about the ability to conduct deep scientific due diligence.
Impuls Dossier
Ilya Yasny — PhD in Chemistry, venture investor focused on the biopharmaceutical industry.
A graduate of the Faculty of Chemistry at Moscow State University, Ilya began his career in computer-aided drug design. Later he moved into venture capital, where for over 10 years he has led scientific due diligence of projects. Today, Ilya Yasny heads scientific expertise at LanceBio Ventures, an investment fund focused on innovative biotech companies.
Beyond investing, Ilya is an active science communicator — he is an author and editor of the portal Biomolekula and runs the Telegram channel LanceBio, covering news and trends in biopharma.
A graduate of the Faculty of Chemistry at Moscow State University, Ilya began his career in computer-aided drug design. Later he moved into venture capital, where for over 10 years he has led scientific due diligence of projects. Today, Ilya Yasny heads scientific expertise at LanceBio Ventures, an investment fund focused on innovative biotech companies.
Beyond investing, Ilya is an active science communicator — he is an author and editor of the portal Biomolekula and runs the Telegram channel LanceBio, covering news and trends in biopharma.
Special thanks to Maxim Musin from Rebels.Ai for his assistance in preparing this material