While the M&A boom in biotech that lawyers longed for in early 2023 hasn’t quite materialized, venture funding is slowing, nontraditional investors are withdrawing from the scene, companies planning to go public are in limbo, and many public companies’ stock is down—all of which contrasts sharply with the vast amounts of capital that biotechs require to reach proof of concept.

After a frothy market that stretched about two years, 2022 saw a “dramatic turnaround,” said Ryan Murr, the co-chair of the life sciences practice group at Gibson, Dunn & Crutcher. “It was like someone pulled the plug out of the bathtub.”