The latest BPSI shows signs of a more durable phase in the biopharma recovery, with improvements across every metric.
After four years of hunkering down, the mood in biopharma turned sharply more optimistic heading into 2026. The Biopharma Sentiment Index (BPSI) climbed to 90 in Q1, up from 78 the prior quarter — a broad-based shift with all 10 core measures improving.
While still below the neutral benchmark of 100, the move marks a decisive change in mindset after a bruising stretch for the industry. The rebound is especially striking as the US consumer confidence plunged to a 12-year low, underscoring biopharma’s countercyclical streak.
Beyond the headline gains, the gap between current conditions and future expectations narrowed considerably in Q1, a key predictive signal that the early-stage recovery is stabilizing.
Headline Results
Contents
1. Headline results
1.1 A decisive pivot in sentiment
1.2 The outlook turns neutral
1.3 Signs of stabilization
2. Differences of opinion
2.1 Investors and execs vs. scientists
2.2 The East-West divide
2.3 Europe fades as a career launchpad
2.4 Biopharma rookies are the most optimistic
3. Pulse findings
3.1 Dealmaking and the stock rally
3.2 Politics as the primary source of pessimism
3.3 Crisis of conviction: Betting on the industry
3.4 Artificial intelligence in 2026
4. Methodology
4.1 Who makes up the BPSI?
4.2 Survey design and index construction
4.3 Data quality and citing the BPSI
The Biopharma Sentiment Index is a global benchmark produced by Endpoints Signal. Each quarter, we survey the biopharma ecosystem using the same set of questions across five dimensions: business conditions, finances, fundraising, the regulatory environment, and hiring. The result is a single easy-to-grasp headline number, with subindexes tracking Current Conditions and Future Expectations. We also explore timely topics such as dealmaking and where respondents would put their own money.
The BPSI draws from the expert subscriber base at Endpoints News. The latest report reflects the views of 988 verified respondents, a quarter of whom are C-level executives.
The Q1 survey was fielded in mid-December, following a six-month run-up of biotech stocks and a burst of dealmaking and public-market fundraising. Against that backdrop, the two biggest areas of improvement in the BPSI were overall business conditions and access to capital. When asked about the biggest source of industry optimism, the No. 1 response was dealmaking activity.
Despite improvements, regulatory uncertainty continues to cast a shadow over the industry. An overwhelming 69% of respondents said the regulatory environment had deteriorated compared to a year ago — only 7% said it had improved. There was little optimism things would get better in 2026.
In their own words:
“Biotech is back. Term sheets are flowing. But instability/revolving door at CDER is a major issue at the FDA. That’s what’s holding more investors back.”
“I work in drug reviews. We have many fewer reviewers, and the people who know processes and policy are gone. The quality of submissions is declining. Pharma continues to use FDA as a sounding board and as consultants instead of having a complete development program. Perilous.”
“The days of dropping sandbags to keep the ship afloat seem to be ending, but we’re all still holding our breath.”
The outlook turns neutral
The BPSI is built from two combined subindexes: Current Conditions and Future Expectations (see Methodology for how they’re calculated). The split matters, because “how things feel right now” and “how people think things will feel next year” don’t move in lockstep — and that gap is often where the predictive value in sentiment surveys lives.
The current conditions reading, while still subdued, snapped into less-dreary territory, rising to 75 from 58. And expectations for the year ahead climbed to 100 from 91, returning to neutral territory for the first time since last year’s biotech bounce began.
In sentiment surveys like the BPSI, the changing relationship between current conditions and future expectations can offer early indications of consequential shifts in an economic cycle. We call it the expectations gap — the difference between where things stand today and where they’re expected to go.
A recovery that starts to stick
Typically, expectations turn first. That’s what we saw back in early October, when the outlook was far brighter than the reality — pain now, optimism ahead. A wide gap like that is common at the start of a recovery, when hope outpaces what most people are experiencing on the ground.
The problem with wide expectations gaps is their fragility. It’s when the industry is vulnerable to head-fakes — a brief rally, a few deals, a fleeting sense that “maybe we’re back,” followed by another reset. Biopharma has lived through enough of those over the past four years to earn its skepticism.
But when the gap narrows amid universally rising sentiment, that’s a different pattern: less wishcasting and more follow-through. That’s exactly what the BPSI shows in Q1, consistent with a recovery that’s starting to stick.
Differences of opinion
This quarter’s results show clear differences of opinion by job role and sector. Confidence is rebounding fastest among investors and senior executives, while scientists and academics remain noticeably more cautious. That also fits the pattern for an early turn: Capital and leadership feel the early signals first — through markets, deals, and financing — while research teams still operate under tight budgets and lingering uncertainty.
In their own words:
“Hiring remains extremely slow and I, a PhD-level scientist seeking business-related positions in therapeutics companies, remain unemployed.”
“The lack of funding opportunities for NewCos in the US to discover new drugs continues. Funding rounds are going to companies with later-stage assets. If this trend continues, it will lead to early-stage pipeline problems for the industry.”
“For R&D/Discovery, I don’t think things can get much worse than where we are now. Regardless of AI adoption, companies will need chemists to discover drugs, period. We have seen headcount reductions over the last 2 years for medicinal and computational chemists.”
December brought a morale-boosting burst of biotech follow-on stock offerings by publicly traded biotechs — including what Endpoints reported was a record $3.2 billion day for this type of fundraising. And while IPOs remained scarce in 2025, investor attention began shifting toward 2026 — especially for companies with mid- to late-stage assets where the “science risk” is lower.
The East-West divide
The other big fault line runs east-west. The mood rose in North America and Europe, while it cooled modestly in China. The biggest regional surprise was Asia-Pacific excluding China, where sentiment dropped sharply.
There are a few plausible reasons for the big drop. In Japan, three key industry groups issued a joint statement on Dec. 16, warning that repeated price cuts and uncertainty around 2026 reforms were undermining Japan’s competitiveness. In South Korea, companies pushed back against plans for significant generic price cuts and impediments to clinical trials that were driving away drug research.
China remains the outlier. It’s the only region with a positive BPSI score in Q1. It’s also the industry’s most important wildcard: When respondents were asked why they’re feeling optimistic or pessimistic, “Innovation in China” showed up in the top five for both sides — highlighting the complex spot China holds as both a threat and opportunity for biopharma.
Even as the US-China sentiment gap narrows, cross-border work still lives under a cloud of policy volatility: export controls, data rules, supply chain chokepoints, clinical trial logistics, and the ever-present question of what gets politicized next by the Trump administration.
We asked respondents to put a number on it: What’s the probability that US-China tensions will materially delay your programs in 2026? A big chunk of the industry either sees the risk as low (0–24%) or says the question isn’t applicable to them — but there’s also a meaningful minority that’s pricing in significant disruption risk.
It’s not just R&D that feels exposed to geopolitics — careers can feel that way, too. We asked respondents where they’d plant themselves for success if they were starting a career in biopharma today. The opportunity map tilts hard toward the US hubs and China, with Europe almost an afterthought.
In their own words:
“I’m optimistic. China can win and we can win. It’s totally fine to be Boston Celtics vs. Los Angeles Lakers. Magic vs. Bird.”
“Small US biotechs are not able to compete with China, so we have to figure out new ways to move forward so the standard of care for patients around the world continues to improve.”
“先の見えないカオス” Translation from Japanese: “Chaos with no end in sight”
“It’s becoming more US-centric, with Europe not stepping up enough to challenge the trend.”
We also wanted to test a question we’ve heard a lot since launching the BPSI: Does experience change the way people see the industry? Are veterans more jaded, or more ahead of the curve? Should we account for experience in our analysis?
It turns out industry sentiment shows little relationship to years in the workforce. But there was one outlier: People just starting their careers in biopharma were bursting with optimism. We should note that biopharma rookies make up a very small portion of the Endpoints survey pool, so it could just be a charming statistical fluke.
Dealmaking and the stock rally
One of the clearest measures of industry health is stock performance. By that measure, the back half of 2025 was a runaway success.
After years of lagging the broader market, the biotech curse finally reversed. The XBI surged in the second half of 2025, beating the S&P 500 by about 40 percentage points. The rally lines up neatly with the BPSI’s pivot from Q4’s pessimistic 78 to Q1’s 90.
Across the survey, dealmaking powered the rising mood in biopharma. Not only was the funding climate a major contributor to the jump in BPSI, but when asked about the top reason for optimism in biopharma, a 28% plurality pointed to dealmaking activity. That’s up 8% from last quarter, when drug discovery and AI were the main sources of hope.
In their own words:
“Fundraising conditions are becoming better. Corporate pharma is short on innovations and facing the patent cliff and looking at biotech again.”
“Signs point towards normalization in biotech markets: Recent pace of deal flow in the $5B to $10 range, stock performance following clinical readouts, and increasing generalist activity. However early stage funding (Seed/Series A) remains depressed.”
“With the improved technology entering into the market, there will be more small to mid-stage biopharma companies than ever before within 5 years or so.”
Acquisitions remained active in the fourth quarter, bringing the 2025 total to about $138 billion across 129 deals, according to DealForma and JP Morgan. The real action was in licensing; biopharma topped $250 billion in total announced value, with 7% upfront cash across 516 deals.
Confidence is building: 65% of BPSI respondents expect the pace of strategic transactions to accelerate over the next 12 months, while just 6% foresee a slowdown in dealmaking.
Politics and pessimism
Even during a quarter where the industry mood has lifted, it’s good to remember that more people still say conditions are worse than a year ago. The message we received most consistently across the survey is that political uncertainty is holding back the industry.
When we asked respondents what’s keeping them pessimistic, the answers were dominated by policy and politics. The political environment was the runaway No. 1 concern, with regulation, trade/tariffs, and drug pricing following — a reminder that the biggest drags on confidence are largely exogenous to the science.
Crisis of conviction
Biopharma still carries the scars of the last few years. We asked respondents for a sanity check: If you had $20,000 of your own money to invest today, would you actually bet on biopharma?
Half of respondents said they’d rather park it in the S&P 500, and another 25% chose tech stocks. Less than a quarter of people in biopharma said they’d bet on their own industry to maximize returns. Confidence may be recovering, but conviction is still catching up.
Artificial intelligence in 2026
The science continues to be a driving force in biopharma. The top sources of optimism, following dealmaking, were drug discovery and artificial intelligence. Confidence in AI is on the rise. When we asked directly about the next 12 months, 74% of respondents said AI will speed drug discovery, up from 69% last quarter. Most expect a moderate boost, with a smaller group betting on a more dramatic acceleration.
In a recent Signal survey on AI, belief in a coming AI transformation in drug discovery was tightly linked to real-world usage. The more people use the tools in their daily work, the more confident they are about the near-term impact. Among job roles, CEOs and scientists stand out as the most bullish on AI. Read more from our AI survey.
In their own words:
“Scientific breakthroughs/innovations around new targets and modalities are really exciting. It’s difficult to imagine that discovery will keep pace given the changes to funding, but really powerful new approaches are out there right now waiting to be put into practice.”
“I’ve begun to feel hopeful, that the market has been right-sized and money for true advancements will be there.”
“While the landscape is shifting and there is uncertainty, the nature of this industry is to continue to thrive and innovate by bringing life-saving therapies to patients – and that will persist.”
“It’s big-boy time, either get to the clinic or die trying.”
Methodology
The Biopharma Sentiment Index (BPSI) provides a disciplined, forward-looking measure of confidence across the global biopharmaceutical industry. The structure draws inspiration from the University of Michigan’s Consumer Sentiment Index, adapting that framework to the unique dynamics of life sciences.
The survey universe is drawn from the Endpoints subscriber base, which comprises a wide cross-section of the global biopharma community. The sample includes investors across venture, private equity, and public markets; C-suite and senior executives; clinical and R&D staff; commercial employees; and policy and regulatory professionals. Company types span biotech, large pharmaceutical firms, CROs, CDMOs, generics manufacturers, and financial institutions. Access requires an Endpoints account to ensure that all responses are tied to verified industry participants.
Each quarterly survey seeks 1,000 completed surveys. Responses are analyzed by role, company type and geography to identify significant categorical variations. The Q1 2026 survey was in the field Dec. 10–23, with 988 survey completions.
The survey is conducted online during the last few weeks of a calendar quarter. Respondents are asked, via emailed invitation, to complete a short survey that balances rigor with ease of completion. The median time to complete the survey is just over three minutes.
Survey Design
The BPSI survey consists of five paired questions that form the backbone of the index. Each question is posed in two forms: one focused on current conditions and another framed as expectations for the year ahead. Responses employ standardized three-point scales — such as “Better / Same / Worse” — with slight variations to align with the wording of the question. A variation of “Don’t know” or “Not applicable” was always available, and those responses were excluded from scoring.
Creating the Baseline
The Biopharma Sentiment Index (BPSI) draws inspiration from the University of Michigan’s Consumer Sentiment Index in its overall design: a small set of core sentiment questions split between current conditions and future expectations, and an index value constructed from diffusion-style scoring. However, the focus of questions, wording and scaling system is unique to biopharma and was developed independently by Endpoints Signal.
Diffusion scales like the BPSI are excellent at capturing breadth of sentiment, but they come with a well-established positivity bias, particularly in the context of business sentiment surveys. The share saying “better” tends to exceed those saying “worse” — even in neutral years. To correct for systematic bias, we normalize the BPSI to “100 = neutral” footing. Readings significantly above or below the 100 baseline should indicate net optimistic or pessimistic conditions.
To determine our rebasing factor, we analyzed the long‑run experience of the University of Michigan’s consumer sentiment series. Michigan uses its own version of weighting — by indexing a score of 100 to a single base year: 1966. This formula for rebasing has been found to significantly overcompensate for positivity bias, resulting in an average consumer sentiment score of roughly 84.5 instead of 100.
Using Michigan’s decades of publicly available data, we can calculate a rebasing factor that should put us much closer to our intended 100 = neutral baseline. From the historic records, we calculate that the average unweighted per-question diffusion score in Michigan’s index is 111. From there, we arrive at a simple neutralizing multiplier of .9 (𝑘 = 100/111 = 0.9), which should more accurately result in “100 = neutral” scaling.
This rebasing method is simple, keeps the index results closer to the raw data, and is supported by an extensive record of data.
Index Construction
The five current-condition questions are used to create the Current Conditions subindex (BPSI-CC), while the five forward-looking items are averaged to form the Expectations subindex (BPSI-EX).
For each of the five questions in a subindex, a Relative Score (RS) value is determined by subtracting the percentage of negative responses from the percentage of positive responses. Each subindex is an average of these five Relative Score values, rebased to 100 and scaled using the neutralizing multiplier. These subindexes are combined into the headline BPSI with a weighting of 40% current conditions 60% future expectations.
BPSI-CC = ((average RS_CC) + 100) * 0.90
BPSI-EX = ((average RS_EX) + 100) * 0.90
BPSI = (0.4 * BPSI-CC) + (0.6 * BPSI-EX)
The heavier weighting on expectations mirrors the methodology used in the Michigan consumer confidence framework and reflects the greater importance of forward-looking sentiment for forecasting purposes.
The first issuance of the survey established a base period. Subsequent waves are reported both as absolute scores on the “100 = neutral” scale and as quarter-over-quarter and year-over-year comparisons. The “100 = neutral” guideline is neither precise nor expected to be consistent over time. It provides a key reference in the early quarters of the BPSI, but it’s likely that quarter-over-quarter comparisons will ultimately take precedence, just as they have with the Michigan index.
To keep the BPSI responsive to current issues, each quarterly wave includes a small set of “pulse” questions. These rotate quarterly and cover topical issues such as the outlook for M&A and the anticipated productivity impact of AI. The pulse questions provide context for the BPSI report but are not factored into the headline sentiment scores.
Several open-text prompts are included. These qualitative responses provide nuance and color to the quarterly reports.
Data Quality and Checks
Several safeguards are in place to ensure the quality of responses. For example, results are screened for duplicate submissions by login-defined URL and flagged for unusually fast completions paired with straight-line answers. Additional safeguards may be taken as necessary.
With each release, the report discloses sample size and any methodological changes so that users can interpret the index transparently. To ensure transparency, a full methodology is updated with each quarterly report. This appendix includes the core-question wording, demographics, response distributions and indexing formulas. The consistent application of these methods will ensure a reliable measure of industry sentiment.
Citing the BPSI
The BPSI was created to be a tool for anyone with an interest in biopharma. Endpoints welcomes you to use our data and charts, with credit given to Endpoints Signal, the intelligence platform of Endpoints News. When possible, please include either a link to this report or the full URL so others may discover it, too: https://endpoints.news/biopharma-sentiment-index-q1-2026/
If you have any feedback about the BPSI or ideas for future pulse questions, drop us a line at signal@endpoints.news. We love hearing from you.