Texas biotechs, which serve as a microcosm of the broader biotech sector, are experiencing many of the same global challenges around access to capital, macroeconomic factors and shifting regulatory policies, which specifically include heightened and yet-to-be-determined changes around US tariff policies and federal funding. While this amplified degree of uncertainty is echoed across all industries, business leaders are beginning to adjust their outlook and strategy to operate in a continuously changing environment.

Despite ongoing macroeconomic uncertainties and increased investor selectivity, Texas biotechs have a lot to be proud of. They have had a meaningful impact on the IPO market over the past 18 months. Venture capital funding has also grown year over year, demonstrating strong interest and a continued commitment to supporting companies with promising science. Additionally, public biotech revenue in Texas increased in 2024 — similar to the broader sector — with companies reporting an increase of 27% compared with 2023, and signs of similar increases in 2025. While companies still face significant challenges in securing funding and executing their business strategies, there is a lot to be proud of with Texas’ biotech sector.

In a world of uncertainty and change, the resilience of Texas’ biotech sector underscores a broader industry shift toward a more strategic focus and heightened operational discipline. While companies remain vulnerable to cuts in federal funding and constrained IPO windows, investors continue to show interest in Texas innovation and their ability to continually adapt by fortifying alliances and leveraging technology. Staying agile in the face of uncertainties and emerging stronger means companies will have to embrace efficiency, adapt to deglobalization and align closely with shifting investor expectations.

For biotech leaders seeking to navigate complexity, unlock value and deliver impact in a sector where science, strategy and execution must move in lockstep, view the full Texas edition of the EY Biotech Beyond Borders Report 2025 here.

Article includes contributions from:

• Justin Foster, Senior Manager, Assurance Services, Ernst & Young, LLP 
• Lisa LaMotta, Associate Director, Clients and Industries, Ernst & Young, LLP
• Arpit Jain, Supervising Associate, Clients and Industries, EY Global Delivery Services India LLP