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Funding squeeze for biotech startups in 2026 & Storm Therapeutics raises $56M for its RNA-targeting cancer drug

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Joachim Eeckhout & Eduardo Longoria
April 17, 2026

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SNAPSHOT

Early-stage biotech funding squeeze deepens in 2026

cocktails season 2019

According to new data from J.P. Morgan, seed and series A biotech financings fell to 50 deals worth $2.3 billion in the first quarter of 2026, down from 60 deals worth $3.7 billion in the first quarter of 2025.

Why it matters: The drop leaves young biotech companies with fewer chances to raise capital just as investors keep favoring later-stage firms with clearer data, lower risk and faster paths to exits.

Backstory: Early-stage biotech funding appeared to stabilize in 2025 after a weak 2024. First-time financings totaled 221 in 2024, then rose to 236 in 2025. That modest recovery now looks shaky, with 2026 starting slower despite a few sizable rounds, including $130 million for Slate Medicine and $95 million for Poplar Therapeutics.

Big picture: Venture investors are continuing to shift capital toward later-stage biotech companies. In the first quarter of 2026, J.P. Morgan tracked 51 series B-and-later rounds worth $4.5 billion, outpacing early-stage funding and widening the gap between newer startups and more mature biotechs.

What’s next: There is still time for early-stage funding to rebound over the next three quarters, but current trends suggest 2026 could finish as the weakest year this decade for first-time biotech financings. 

SNAP AGAIN

Storm Therapeutics raises $56M to push RNA-targeting cancer drug into phase 2 sarcoma trial

Why it matters: The move positions Storm to pursue accelerated approval for a first-in-class RNA-modifying therapy, targeting cancers with significant unmet need and limited treatment options. The variety of enthused investors signals continued confidence in Storm’s RNA-targeting platform despite broader market headwinds.

Backstory: Founded in 2015 out of the University of Cambridge, Storm focuses on small molecules that modulate RNA-modifying enzymes. Early backing came from major pharma venture arms, including Pfizer Ventures and Merck KGaA’s M Ventures, both of which participated again in this round along with Taiho Ventures and others.

Zoom in: The funding will support a mid-stage trial evaluating STC-15 as a monotherapy across multiple sarcoma subtypes. The drug targets METTL3, an enzyme that drives mRNA methylation and plays a key role in cancer stem cell differentiation.

Big picture: Sarcomas, rare cancers accounting for ~1% of adult and 15% of pediatric cancers, depend on the METTL3 pathway for growth. Early phase 1 data of STC-15 showed tumor regression across several subtypes, with more results expected at a medical conference later this year.

What’s next: If phase 2 data are positive, Storm aims to pursue accelerated approval in sarcoma and expand STC-15 into additional oncology indications.

SNIPPETS

What’s happening in biotech today?

🔁 Trial reboot: Roche announced a new global Phase 3 trial of Elevidys, a gene therapy for Duchenne muscular dystrophy developed by Sarepta, aiming to support a renewed approval bid in Europe after a prior rejection by regulators due to insufficient evidence of clinical benefit. The therapy, already approved in several countries, has faced setbacks including safety concerns, mixed efficacy data, and declining sales. The new study will use a revised design intended to generate stronger evidence. Results are expected around 2028.

🇨🇳 China deal: Aligos Therapeutics has licensed the Greater China rights to its phase 2 chronic hepatitis B (HBV) drug pevifoscorvir sodium to Amoytop in a deal worth up to $445 million, including $25 million upfront. The drug, a capsid assembly modulator with dual mechanisms aimed at reducing HBV replication and eliminating viral reservoirs, is currently being tested against Gilead’s Viread, with results expected next year. The agreement extends Aligos’ existing partnership with Amoytop, which is well established in China’s hepatology market and may combine the therapy with its approved HBV treatment Pegbing.

👁️ Vision miss: Johnson & Johnson has returned rights to the gene therapy botaretigene sparoparvovec (bota-vec) to MeiraGTx after the treatment failed a phase 3 trial in a rare eye disease, despite previously acquiring it in a deal worth up to $415 million. The therapy did not improve vision-guided mobility in patients with X-linked retinitis pigmentosa, leading J&J to drop the asset, though it remains eligible for future milestone payments and royalties. MeiraGTx plans to pursue regulatory filings in the U.S. and EU with a potential 2027 launch, despite uncertain approval prospects and investor skepticism following the trial setback.

🤝 Cancer tag-team: Boehringer Ingelheim and Zai Lab have partnered to evaluate a dual DLL3-targeting approach in a Phase Ib/II trial for extensive-stage small cell lung cancer and other neuroendocrine carcinomas, combining Boehringer’s T-cell engager obrixtamig with Zai Lab’s antibody-drug conjugate zocilurtatug pelitecan. Under the agreement, Zai Lab will supply its drug while Boehringer leads the trial, with both companies retaining rights, reflecting a shared strategy to develop combination therapies for hard-to-treat cancers.

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