To many, 2026 is the year the biotech industry came back to life. The XBI—an exchange-traded fund that tracks the U.S. biotech sector—has been buoyant, while a flurry of startups broke the IPO dry spell with their public debuts, including record-setting offerings from Kailera Therapeutics and Parabilis Medicines.
Sprinkle on top the approval of Revolution Medicines’ pancreatic cancer game changer Rasonque and signs of a more industry-friendly stance from the FDA, and things are looking pretty rosy in the drug development world. That’s especially true compared with last year, when the industry faced a rotating cast of villains, including mass federal layoffs, terminated research funding, a government shutdown and drug pricing reform.
That brighter outlook is also reflected in the eight biotech closures Fierce has reported so far this year. Add two more companies whose closures Fierce has either confirmed off the record or sought to verify following reports elsewhere in the industry, and this year’s graveyard has 10 entries—well below the 16 confirmed closures in last year’s lineup and just over a third of the 27 closures in the dark days of 2023.
This tracks with broader trends in biotech layoffs, which have settled down this year after reaching worrying heights in 2025.
Still, these more positive trends offer little solace to biotech employees who lost their jobs when companies called it quits over the past 10 months. At Fierce, we remain hopeful that—even in a tight job market—all of the talented individuals affected by these closures will find a new home for their expertise.
In the meantime, Fierce has made its annual visit to the biotech graveyard to remember all the companies we lost in 2026. While we're embracing the spooky spirit of Halloween, we hope the sad stories of drug developers shutting up shop won’t haunt the industry for too long.
A fight for funding
For drug developers in the earliest stages of development, every funding round can become a life-or-death struggle to avoid the biotech graveyard. That battle has only intensified as investors become warier of backing riskier bets, instead favoring companies with more mature assets and clinical data to support their science.
That appeared to be the problem facing Adecto Pharmaceuticals. The immunotherapy startup was relatively long in the tooth, having been launched in 2014 by researchers from Tufts University to develop therapies and diagnostics targeting ADAM8-positive cancers. But the company entered 2026 with its lead candidate, AD100—a monoclonal antibody designed to inhibit ADAM8 and reprogram both lymphoid and myeloid cells—still in preclinical development.
Adecto had never reported a traditional seed or venture capital funding round, instead relying on “multimillion-dollar” grants from the National Cancer Institute's Small Business Innovation Research program.
The Boston-based biotech “fought hard to keep going,” CEO Nora Mineva, Ph.D., explained in an October LinkedIn post. But ultimately, the company was unable to secure the funding needed to stay afloat.
“However, navigating a risk-averse fundraising environment that is hesitant to back new therapeutic targets without clinical data meant that we simply ran out of financial runway,” Mineva said in the post.
It was a similar story at f5 Therapeutics. The molecular glue-focused biotech couldn't be faulted for its ambition, aiming to reshape drug discovery with its NExMods platform to identify new disease targets.
The company's approach was intended to support the development of treatments across numerous therapeutic areas, including oncology, immuno-oncology, fibrosis, inflammation and neurodegeneration.
Like Adecto, f5 had yet to advance a drug into the clinic, with none of its programs progressing beyond in vivo studies. That lack of clinical data may have made it harder for the company to attract investors.
In a March LinkedIn post, f5 CEO and founder Gary Choy pointed to the difficult funding environment facing early-stage biotechs.
“The past few years have been brutal for early‑stage biotech, with funding for young platforms at multi‑year lows and dozens of startups shutting their doors despite strong science,” Choy wrote.
Defeated by the data
In some cases, you just can’t argue with the science. That was the case for Nido Biosciences, which shuttered early in the year after its lead neurological disease candidate disappointed in a midstage study.
Nido’s story had gotten off to a strong start, with the Massachusetts-based biotech publicly emerging in 2023 with $109 million in hand and backing from Eli Lilly. Its primary mission was to advance NIDO-361, a small molecule designed to correct disruptions in gene expression associated with Kennedy's disease, a rare inherited neuromuscular disorder.
NIDO-361 made it into a global phase 2 trial in patients with Kennedy’s disease—also known as spinal and bulbar muscular atrophy (SBMA)—but the results were disappointing.
“The results were not what we had hoped, and as a result, NIDO-361 will no longer be a clinical candidate,” Nido CEO Jeremy Springhorn, Ph.D., explained in a LinkedIn post.
“This was a very hard outcome for all of us, especially considering the hope this program held for SBMA patients and their families,” added Springhorn.
It was a similar song at Arpeggio Biosciences, although the transcriptome-focused biotech never managed to get its lead candidate into the clinic.
Still, the company’s focus on a small-molecule Nrf2 degrader for non-small cell lung cancer had looked promising. Nrf2 is a transcription factor that regulates cellular defense mechanisms, including responses to oxidative stress and inflammation.
Arpeggio had attracted investors including Khosla Ventures for a $17 million series A in 2022, although the biotech had kept a relatively low profile since the fundraise.
When the company did resurface in August, it was to reveal that the Nrf2 program had hit a wall. The problem appeared to be an off-target liability that the company couldn't separate from the molecule's therapeutic effects.
“Our lead drug program … represented years of novel science,” CEO Joey Azofeifa wrote on LinkedIn. “But in the end, we were unable to separate the molecule's efficacy from an off-target liability.”
Azofeifa acknowledged that there were “numerous challenges associated” with Arpeggio’s goal of developing medicines “to restore the system rather than ablate a single target.” But the CEO maintained that the company’s “founding idea was beautiful.”
Meanwhile, Denmark’s IO Biotech fought for life to the last. The failure of its cancer vaccine Cylembio, in combination with Merck & Co.’s Keytruda, to significantly outperform Keytruda alone in a phase 3 melanoma trial in August 2025 wasn’t enough to dim IO’s dream of taking its therapy to market.
But that dream crashed into reality the following month when the FDA advised the company not to submit Cylembio for approval based on the phase 3 data. That setback led to layoffs and the exploration of strategic options, but it wasn’t until March of this year that IO finally surrendered to the inevitable and filed for bankruptcy.
A second life?
Not every company facing burial in the biotech graveyard was fully laid to rest. Rome Therapeutics announced in January that it had been “winding down operations” and that the process was complete, four months after the preclinical biotech—which had been exploring the therapeutic potential of so-called “junk DNA”—blamed “challenging market conditions” for its decision to pursue layoffs.
But instead of going quietly into the night, Rome's CEO revealed that the biotech would operate as a wholly owned subsidiary of Pretzel Therapeutics. Under the agreement, Rome’s scientific co-founders David Ting, M.D., of Massachusetts General Hospital Cancer Center, and Benjamin Greenbaum, Ph.D., of Memorial Sloan Kettering Cancer Center would continue to have input into the subsidiary's work.
The companies already had close ties. Pretzel’s CEO and co-founder Jay Parrish, Ph.D., and its chief operating officer Baruch Harris, Ph.D., had both served stints at Rome before Pretzel’s launch in 2022 to develop treatments for diseases linked to mitochondrial dysfunction.
At the time of the acquisition, Rome’s most advanced asset was a LINE-1 reverse transcriptase inhibitor that had successfully lowered autoantibodies in mouse models of autoimmune disease in 2023.
While Rome’s story as an independent company had come to an end, CEO Rosana Kapeller, M.D., Ph.D., was at least able to say that “the science we championed is not ending—it is continuing.”
Rome’s fate offers a final reminder: A biotech may end up in the graveyard, but its science doesn't necessarily have to be buried with it.
The state of biotech funding is one of the hot topics being discussed at Fierce Biotech's high-impact event in London next month. Find out more information and register by clicking on the banner below:
