Oct 16, 2026 · 60 min
Biotech selloff tests valuations as clinical bets advance
Episode 199 - October 16, 2026
The episode connects a pressured biotech market and narrowing IPO window with clinical readouts that could reshape opportunities across several disease areas.
- 1Biotech’s selloff reflects fund flows, macro uncertainty, and limited M&A, but the panel debates whether valuations now look broadly attractive.
- 2Private companies face a flight toward quality as capital needs rise and the public-market window narrows.
- 3Clinical updates span IPF, pediatric liver disease, CNS delivery, neurodegeneration, and cancer vaccines, with meaningful promise and clear limitations.
Don't miss
Jake Becraft explains how private biotech companies are reassessing IPO plans and capital needs as public markets favor quality and innovation.
The brief
Biotech’s recent degrossing has pressured stocks, but the panel questions whether fund flows, elections, rates, and absent M&A explain more than company fundamentals.
Jake Becraft brings a private-company CEO’s view: investors are favoring quality and innovation while companies reassess capital needs and a narrowing IPO window.
The clinical discussion moves from Bristol Myers Squibb’s IPF data to Mirum’s pediatric cholestatic-disease results, balancing meaningful signals against trial-design and population limits.
Neuroscience takes center stage as Arrowhead’s transferrin-based delivery approach and Elector’s proprietary ABC strategy illustrate the field’s search for workable drug access and targets.
The episode closes on cancer vaccines and mRNA platforms, asking whether recent evidence marks a breakthrough or another promising step requiring validation.
What was said on this episode
42 statements · 25 positive · 11 negative · 2 mixed · 4 neutral
The XBI is currently under pressure.
“The XBI is under pressure again today.”
Listen at 0:44
The XBI is up 20% year to date.
“The XBI ETF is still up a very healthy 20% for the year.”
Listen at 1:02
The XBI has fallen approximately 700 basis points in two weeks.
“the XBI has come down considerably. some 700 basis points since our last podcast two weeks ago.”
Listen at 1:18
Investors are rotating from biotech into other healthcare subsectors.
“investors are rotating out of biotech into these other healthcare subsectors.”
Listen at 1:58
The XBI is in a correction.
“we are now... definitively in a correction of sorts.”
Listen at 2:11
About 28 biotechs debuted publicly in 2026.
“we are now at around 28. biotechs that have made their debut in 2026.”
Listen at 3:36
Biotech IPOs may reach at least 30 in 2026.
“we are definitely on pace to see perhaps 30 or more new issues this year.”
Listen at 3:47
Announced biotech M&A deal flow has declined considerably.
“it does seem that announced M&A deal flow has down quite considerably.”
Listen at 4:19
Rising interest rates increase strategic buyers’ borrowing costs.
“this law reflects an acutely rising interest rate environment, which makes the cost of borrowing more expensive for strategics”
Listen at 4:25
Biotech degrossing can create a cycle of worsening fund performance.
“it becomes a cycle of sort of everyone seeing performance kind of get hit from, you know, the start of a degrossing.”
Listen at 8:03
Hedge-fund degrossing pressure began in early summer.
“that pressure's kind of been on since early summer.”
Listen at 9:58
Biotech market conditions are now strongly behavioral and psychological.
“I think we're in like the inning of this market now where it's become just as much behavioral and psychological as really anything else.”
Listen at 10:38
Investors cannot determine when the biotech selloff will end.
“no one really knows when this carnage is going to stop.”
Listen at 11:08
A string of biotech M&A could help end the sector’s bear market.
“if we do start to see a string of M&A, I do feel like, you know, I feel like it's the cliche all the time to say that M&A. kind of cures bear markets in biotech”
Listen at 11:38
M&A or time may be the main catalysts for a biotech market recovery.
“I think it's hard to find a catalyst. other than M&A that turns this around, other than maybe just kind of like time.”
Listen at 12:12
Biotech degrossing may begin easing after October 31 fund closes.
“The gross thing theoretically, hopefully is going to start abating after the October 31st sort of, you know, annual close for many funds.”
Listen at 12:32
A Democratic congressional sweep could lead to AI regulation.
“if the Democrats sweep Congress, which is in some ways increasingly now a risk or a potential. whether they're going to move to regulate AI”
Listen at 13:01
Isomorphic Labs is speculated to have a $50 billion valuation.
“there's speculation that they have a 50 billion valuation”
Listen at 13:30
The 25 largest XBI stocks are performing well.
“if you look at the 25 top stocks in the XBI, they're performing very well.”
Listen at 13:54
Interest rates may rise again, possibly twice, by year-end.
“there's probably going to be another raise, expected probably even two from here, maybe one certainly by the end of the year.”
Listen at 14:42
Biotech is far from being in a bubble.
“I think we're very far from a bubble.”
Listen at 17:11
Biotech stocks are reasonably priced overall.
“things are fairly, you know, reasonably priced.”
Listen at 20:24
Biotech investors are favoring quality and innovation.
“there's a flight to both quality and innovation right now.”
Listen at 21:18
Current public-market pressures seem transient and disconnected from fundamentals.
“there's... all sorts of things affecting the public markets right now that seem actually very transient and disconnected from maybe underlying fundamentals.”
Listen at 21:27
LPA1 antagonist drugs appear better tolerated than other IPF drugs.
“It does seem like these drugs tend to be much better tolerated than other drugs in IPF.”
Listen at 29:26
The FDA is likely to approve Bristol’s IPF drug.
“it's hard to see that the FDA wouldn't approve this.”
Listen at 30:07
A successful Bristol IPF drug could leave room for multiple competing drugs.
“if this is ultimately a big commercial product, there's likely going to be room for a number of these”
Listen at 32:01
IPF clinical trials have been difficult.
“clinical trials here have been like... Really tough.”
Listen at 33:07
Combining tolerable IPF mechanisms could substantially advance treatment.
“that would be a great advance if you could kind of stack additional tolerable mechanisms”
Listen at 36:32
Livmarli produced consistent placebo-adjusted reductions in pruritus.
“it showed pretty, you know, what I would say is very consistent. placebo-adjusted reductions, reductions from base, you know, good magnitude of reduction in pruritus from baseline.”
Listen at 38:02
Mirum plans to seek an indication potentially adding 2,000 US and EU biliary-atresia patients.
“they're going to file for this indication, which could potentially add another 2,000 US and EU patients just in the biliary atresia side of things.”
Listen at 38:14
IBAT inhibitors dramatically reduce cholestasis-related pruritus.
“if a person has pruritus due to cholestasis, giving them an IBAT inhibitor will really dramatically reduce that pruritus.”
Listen at 38:52
Teva, Argenx, and First Tracks show strong celiac-disease data.
“all of them show really good data.”
Listen at 40:37
The celiac-disease drugs reduce lymphocyte attack on the epithelial lining.
“they're showing a reduction in the attack on the epithelial lining with lymphocytes.”
Listen at 40:40
These celiac-disease drugs have shown activity in vitiligo.
“The good news is these drugs also work so far in vitiligo.”
Listen at 43:00
Argenx has important phase-three MMN data forthcoming for C2 antagonists.
“they have very important to phase three data coming up in mmn multifocal motor neuropathy with their C2 antagonists”
Listen at 46:40
Arrowhead’s tau drug lowered CSF tau by over 80%.
“they were getting up to over 80% tau-lowering in the CSF.”
Listen at 49:23
Elector’s preclinical technology reduced tau mRNA by about 75–80%.
“they have shown, at least pre-clinically, tau knockdown, tau mRNA knockdown. of about 75 to 80 percent”
Listen at 53:25
Varistems reported excellent early data for a mutant-selective KRAS G12D inhibitor.
“they had very, very excellent data for their mutant-selective KRASH G12D. inhibitor”
Listen at 54:18
Moderna and Merck may have achieved the first major cancer-vaccine breakthrough.
“we've, in my opinion, had the first big breakthrough in cancer vaccines with Moderna and Merck announcing”
Listen at 55:27
mRNA vaccines may provide immunotherapy benefits independently.
“there is growing evidence that mRNA vaccines, like even COVID vaccines, can provide a immunotherapy benefit on their own”
Listen at 55:55
The Moderna-Merck vaccine can increase melanoma progression-free survival.
“there's certainly a uh a ability to increase the um progression-free survival among melanoma patients”
Listen at 57:20
Statements are attributed to the speaker as said on the episode and reflect their view at the time, not PodLume's. They are not advice.
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