Incubate and Manatt Release New Report: Regulatory Instability at FDA Is Reshaping Biotech Investment
Washington, DC, April 21, 2026 (GLOBE NEWSWIRE) -- Today, Incubate, in partnership with Manatt Health, released new insights from interviews with leading biopharmaceutical investors showing that instability at the Food and Drug Administration (FDA) is increasingly shaping investment decisions. In short, investors aren't just evaluating science -- they're reassessing whether the U.S. regulatory environment is predictable enough to support it.
Based on interviews with 16 investors spanning seed, venture, and private equity, respondents pointed to regulatory uncertainty, leadership turnover, and shifting evidentiary standards at the FDA as key drivers of increased risk in U.S. biopharmaceutical investment. Many described declining confidence in the FDA's predictability and the consistency of its scientific and evidentiary standards, leading firms to recalibrate risk tolerance, restructure portfolios, and, in some cases, redirect capital away from U.S. drug development toward opportunities abroad.
As one investor put it, "Without a clear regulatory pathway that can be articulated to investors, companies become un-investable."
Investors also reported that certain therapeutic areas -- including vaccines, cell and gene therapies, and oncology -- are being disproportionately affected by regulatory uncertainty, as shifting evidentiary standards and perceived political influence on FDA decision-making increase risk in these areas. At the same time, China is emerging as a more competitive destination for investment, with respondents citing speed of clinical development, cost efficiency, and clearer regulatory pathways as advantages despite ongoing geopolitical concerns.
Additional findings from investor interviews include:
- FDA regulatory instability is reducing confidence in the agency's predictability and increasing perceived investment risk in new medicines.
- Investors are shifting capital away from riskier U.S. investments and toward more mature assets and opportunities abroad.
- Vaccines, cell and gene therapies, and novel oncology products are seeing reduced investment due to heightened regulatory risk.
- China is emerging as a more competitive destination for biopharmaceutical investment.
- NIH funding uncertainty is compounding long-term risks to innovation.
"Biotech investment in the United States follows a clear path from drug discovery to FDA approval -- but that path depends on a stable and credible regulatory process," said Incubate executive director John Stanford. "When that predictability breaks down, it doesn't just delay investment decisions -- it changes where capital flows globally. Restoring confidence in the FDA is essential to maintaining U.S. leadership in biomedical innovation."
Read the full report here.
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About Incubate
Incubate is a 501(c)(4) organization of venture capital firms representing the patient, corporate, and investment communities. Our primary aim is to educate policymakers on the role of venture capital in bringing promising treatments to patients in need.
About Manatt Health
Manatt Health integrates legal and consulting services to better meet the complex needs of clients across the health care system. Combining legal excellence, firsthand experience in shaping public policy, sophisticated strategy insight and deep analytic capabilities, we provide uniquely valuable professional services to the full range of health industry players. Our diverse team of more than 200 attorneys and consultants from Manatt, Phelps & Phillips, LLP, and its consulting subsidiary, Manatt Health Strategies, LLC, is passionate about helping our clients advance their business interests, fulfill their missions and lead health care into the future. For more information, visit https://www.manatt.com/Health.
Bridget Brown Incubate 2028582333 bbrown@keybridge.biz
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