PitchBook Says Biotech Funding Rebound Could Lift CDMO Demand In Two To Four Quarters

PitchBook expects the rebound in biotech investment to translate into stronger demand for biopharma services, including contract development and manufacturing organizations, over the next two to four quarters. The call rests on a familiar timing gap: capital typically returns before service-provider revenue does.

Last month, PitchBook reported that quarterly biopharma venture capital deployment topped $10 billion for the third time since early 2022, helped by Isomorphic Labs’ $2.1 billion series B financing round. The quarter also included exits of VC-backed companies collectively worth $34.4 billion as Eli Lilly and Gilead completed multibillion-dollar biotech takeovers.

Why Services Have Lagged

PitchBook said the recovery in biotech funding has yet to fully reach the pharma services sector. That delay is consistent with earlier cycles in venture activity, leading the firm to predict stronger CDMO demand over the next two to four quarters.

If the historical pattern repeats, the biotech funding resurgence that began in the second half of 2025 should show up as demand for services in late 2026 or early 2027. Lonza CFO Philippe Deecke described a similar cadence after an earlier improvement in biotech investment, telling investors after the first half of 2024 that there is “always a time lag of roughly six to nine months before you would see any funding impact being reflected in our financials.”

The strategic implication is that service-provider weakness may be trailing rather than leading indicator data. Funding can recover well before outsourced development and manufacturing volumes visibly improve.

Where The Recovery May Show First

PitchBook expects the rebound to favor some segments more than others. It predicted that CDMOs focused on complex modalities such as cell and gene therapies, antibody-drug conjugates and radiopharmaceuticals will lead the recovery in demand for pharma services.

The firm also sees signs that transaction activity may already be turning. It said annualized deal count in the first half of the year was running ahead of the level reported in 2025, suggesting an inflection after four years of contraction in private equity pharma service deals. Over the first half of the year, PitchBook tracked 27 manufacturing and distribution deals worth $1.9 billion.

That activity was supported by ingredient-manufacturing transactions including CordenPharma’s acquisition of AmbioPharm and Apothecon Pharmaceuticals’ $270 million funding round. Generics was another active subsegment, led by Apotex’s initial public offering.

For investors and operators, the signal is less about one quarter’s funding headline than about conversion. The next phase of the biotech rebound will be judged by how quickly fresh capital moves from balance sheets into outsourced development, manufacturing and distribution revenue lines.