The following is an excerpt from a Bloomberg article published on May 6, 2025:
The Trump administration’s sweeping cuts of federal research funding and its fight with Harvard University risk bleeding into the venture capital market, curbing financing opportunities for early-stage drug development.
More than half of biopharmaceutical company respondents expect to have a harder time raising capital, according to a survey conducted in late April and released on Tuesday by the Massachusetts Biotechnology Council and Biocom California.
Venture capital funding is crucial to next-generation medical developments. These investors have historically been willing to take riskier bets than conventional banks, aiming for a big payoff if a treatment succeeds or the company goes public. But the Trump administration’s cuts to research grants from the National Institutes for Health and its increasingly hostile standoff with Harvard are injecting volatility into the funding landscape.
“Biotech is a high-risk, long cycle industry,” David Meeker, the chief executive officer of Boston-based Rhythm Pharmaceuticals Inc., told the survey authors. Venture capital “funding is the first to go in times of instability.” Early-stage research is most likely to get squeezed, with the pullback likely to eventually curtail the pipeline of new drugs, he said.
Medical innovations may “never be realized because there’s just no funding to move them along,” said Steve Hale, founder and CEO of Boston-based DG Medicines, which focuses on developing treatments for a rare type of pancreatic cancer.