aibioBiotech reverse mergers reach highest count since 2021 as PIPEs return, J.P. Morgan says
J.P. Morgan counted 27 reverse mergers worth $7.5 billion in the first nine months of 2026. Nineteen came with private placements, against three of 12 in 2025.
Key facts
- News type
- Mergers
- Primary source
- Fierce Biotech
More private biotechs have gone public through reverse mergers in 2026 than in any full year since 2021, according to J.P. Morgan data reported by Fierce Biotech on Oct. 21. The bank tracked 27 reverse mergers worth a combined $7.5 billion in the first nine months of the year, up from 12 in all of 2025. The peak was 34 in 2021.
The bigger change is in financing. Nineteen of the 27 deals came with a private investment in public equity, or PIPE, compared with three of 12 in 2025, Fierce reported.
The details
Deal value has not kept pace with deal count. The $7.5 billion total for 2026 so far is below the $9.8 billion recorded across fewer deals in 2025 and the $8.4 billion in 2022, according to the Fierce report.
Paragon Labs, a company builder backed by Fairmount, drove a large share of the activity. Its companies Korsana Biosciences, Mentari Therapeutics and Velaris Therapeutics went public through reverse mergers that raised $380 million, $200 million and $350 million. Korsana's deal shows the template. It closed its merger with Cyclerion Therapeutics and a $380 million private placement led by Fairmount and Venrock Healthcare Capital Partners, and began trading on Nasdaq as KRSA on Sept. 9. Its lead program is KRSA-028, a shuttled antibody against amyloid beta for Alzheimer's disease.
Counts differ by tracker. William Blair counted 12 reverse mergers in the third quarter that raised $1.9 billion in concurrent PIPEs, next to nine IPOs that raised $2.7 billion. In early September, BioSpace cited Leerink Partners data showing 17 reverse mergers completed or planned to close in the third quarter, up from one in the second.
Context
The rest of the deal market is also busy. J.P. Morgan's Q3 2026 biopharma report lists $138.9 billion of M&A across 113 deals so far this year, $23.9 billion of venture funding across 385 rounds, and 22 IPOs that raised $7.5 billion. That IPO total is more than the full-year proceeds of each year from 2022 to 2025. For comparison, M&A reached $122.1 billion in all of 2025, Fierce noted, and Vertex's $10 billion purchase of Crinetics Pharmaceuticals was the third quarter's largest deal.
Venture funding slipped from $9.9 billion in the second quarter to $6.7 billion in the third, though J.P. Morgan estimates the full year could reach $33 billion, which would be the most since 2021, Fierce reported.
What it means for investors
The PIPE share is the number to watch. When specialist funds commit hundreds of millions of dollars at the time of the merger, the new company starts public life with cash and a known shareholder base. Maha Katabi of Sofinnova Investments told BioSpace that investors in a reverse merger can see who else is investing, while an IPO's outcome stays uncertain until pricing.
The risks are real. BioSpace noted that reverse merger investors must be willing to hold shares through a lengthy closing and registration period. Clinical failure rates apply to these companies as to any other biotech. And one builder, Paragon, accounts for a visible slice of the year's volume, so a setback at a few of its companies would weigh on the trend.
What to watch
Reverse mergers typically take four to six months to close, per a J.B. Strategy Partners tracker cited by BioSpace, so deals signed this summer will land in the fourth quarter. J.P. Morgan's full-year report will show whether venture funding reaches its $33 billion estimate.