Biotech in 2025 – A Nobel Prize Case Study
By Anders Månsson, Senior Advisor at Ventures Accelerated
November 3, 2025
Anders Månsson
With the recent announcements on the 2025 Nobel Prizes, it is only natural to attempt a connection to that in this issue of the Accelerated Insights editorial. I will abstain from any comments on the peace prize, as that has been discussed ad-nauseum in media given that politics involved. And, although fascinating from a popular science perspective, I must confess that quantum tunneling and ideas on the development of metal-organic frameworks, from the dominions of physics and chemistry respectively, are a bit out of my league proficiency wise. Also, though I hear his latest novel was written in only one sentence, which would possibly signal succinctness, I also deem myself unqualified to comment on the literary achievements of László Krasznahorkai - to be honest, to me, just spelling his name correctly was something of a literary challenge. As I have worked in the area, I would perhaps not be a total amateur in commenting on the scientific discoveries on the immune system T-cells, underpinning this year’s prize for Medicine, but the prize that draws my attention the most as I write today is the Economics prize, suggesting how innovation drives growth, for that I think is more broadly relevant to our industry right now than any of the other prizes, including the one for Medicine.
I think that we can draw on the prize awarded to Mokyr, Aghion, and Howitt, for their research on innovation-driven growth and “creative destruction,” to gain valuable insight into the problems with the current funding crisis in the global biotech sector. Their work offers perhaps both a warning and a roadmap for the revitalization of this industry, which is certainly shaken due to structural underfunding and shifting investment priorities, as elaborated on in earlier editorials.
The fundamental message of the Economics Nobel laureates is clear: long-term economic growth hinges on innovation, not merely on the incremental accumulation of labor or capital. Societies see enduring advances when new blossoming knowledge, technological breakthroughs, and entrepreneurial risk-taking, continually disrupt the status quo. Some nations are excellent examples of this, and in the Nordics Denmark is certainly one of them.
In the last few decades Denmark as a nation has turned itself from a rather rural and agriculturally dominated trade economy to an undeniable knowledge and innovation hub, not least as it pertains to biotech. Obviously, the jewel in the crown is Novo Nordisk, whose core business of insulin was once actually a spin-out from the agricultural industry, with insulin being derived from pigs initially. Although the growth journey of the Nordic pharma giant has as of lately been facing its first obstacles in decades, the company has drawn with it on its hitherto journey of unbridled success, a plethora of medium-sized and small biotech and pharma companies, turning the Greater Copenhagen Area into a formidable pharma and biotech hub. One can only lament the tragic vote of Sweden not to place EMA in Copenhagen a few years ago. Having EMA in Copenhagen would surely have further solidified Scandinavia as a global hub in our industry.
As our Nobel laureates in Economics point out, innovation is not self-sustaining by default. As Mokyr’s historical research shows, and as Aghion and Howitt’s models confirm, it is obvious that innovation cycles can stall. Societal, political, regulatory, and financial environments that stifle experimentation, punish risk-taking, or channel resources away from science and technology certainly risk causing stagnation and falling behind more open and risk-tolerant regions or sectors.
In 2025, the biotechnology sector provides a sobering example of these dynamics. After the funding booms of the late 2010s and the COVID-19 pandemic, global biotech is now grappling with what analysts describe as a “funding winter.” Early-stage investment has plunged: venture funding for startups dropped by as much as 35-40% versus 2021 highs, and the climate remains especially harsh for preclinical and seed-stage companies. The result, as recent industry reports confirm and as has been elaborated on in previous editorials, is widespread pipeline reductions, layoffs, and a chilling reluctance in the pursuit of bold, high-risk projects, essential to scientific and medical progress.
Per the Nobel Prize theory, reducing support for breakthrough innovation undermines the very mechanism that drives enduring growth for both society and sector. In biotech, “creative destruction” is vital: many ventures will fail, but those that succeed could give rise to whole new therapeutic classes, create platforms for future advances, and sometimes they can even redefine entire industries.
In this light it is sad to note for example the “raise to the bottom” tendencies in terms of drug pricing that is under consideration in the USA with its suggested policy of “most favored nation” for the largest economy on earth, and one that benefits tremendously from pharma and biotech industry success at that. There is nothing wrong with price prudence per say and indeed ensuring ample generic competition after patent expiration is also an important driver of innovation. Regrettably, tariffs and global trade barriers, also part of recent US policy, might impair such competitive forces that would otherwise be driving prices down quickly in the post patent phase, thus indirectly exacerbating the problem, reducing the pull effect for innovation while increasing costs.
However, economic policy by choice as it relates to the pharmaceutical area is not the industry’s only current problem. A prevailing unstable geopolitical situation in general inevitably fuels sentiments of risk aversiveness (notably mostly outside the AI sector, it would seem) and investing in commodities such as gold has become the defensive way of a dealing with the situation. However, whereas individual investments in precious metals and other “safe commodities” could be lucrative in the short run, I think we should all be aware that as a society we are not investing in our future growth and prosperity. And now this is not only my opinion; I have Nobel Prize laureates backing me on that…
Still, for the here and now, we must consider the words of R&B legend Billy Ocean – “when the going gets tough, the tough get going”, and at Ventures Accelerated we certainly stand ready to help you up your stakeholder game in these challenging times.