Biopharma reverse mergers rise 1,600% in Q3 to rival IPOs

News Business Biopharma reverse mergers rise 1,600% in Q3 to rival IPOs September 2, 2026 | 3 min read | Gabrielle Masson Twitter LinkedIn Facebook Email Print Almost as many biotechs have opted for a reverse merger to reach the public markets as those executing more traditional initial public offerings this year. While traditional IPOs often grab the most industry attention, biotechs are increasingly finding that reverse mergers are a faster and less volatile alternative this year.“The thing that everybody overlooks is that there are other ways to get public,” Jack Bannister, senior managing director of equity capital markets at Leerink Partners, told BioSpace in an interview. “It’s under the radar, but there have been as many reverse merger pipes as there have been IPOs this year.”By Leerink’s count, there have been 20 biotech IPOs and 19 reverse mergers in 2026 so far.While the quarterly numbers for IPOs have remained largely consistent thus far, more than half of the reverse mergers in 2026 have happened in the current quarter, with 17 already completed or planned to close this quarter.

That’s a 1,600% leap from the single reverse merger reported last quarter. In fact, not since the second quarter of 2025 has biopharma seen more than one reverse merger. That quarter there were two.The 17 transactions reported so far this year include de-SPAC reverse mergers, a deal in which a private company merges with a publicly traded Special Purpose Acquisition Company (SPAC)—or a “blank check” company—to become public.

An investor ‘black box’ Many investors prefer the reverse merger path to an IPO, according to Bannister. “The IPO process is a little bit of a black box for investors,” he explained. “You have to trust that it’s going to trade well based on a management team, a board, a bank, doing everything right.” Maha Katabi, general partner at Sofinnova Investments, agreed: “When you’re executing on an IPO, you don’t know until the day that it prices that you’re going to be successful.”Reverse mergers, on the other hand, involve a lot of public disclosures because they involve an already-public company merging with a private business.

These transactions typically include private investment in public equity (PIPEs), a sale of stock to select investors that occur before or during a public listing. That means that investors are able to see who they’re investing alongside. IPO Biotech IPOs approach ‘escape velocity’ barring yellow flags that could threaten rebound Twenty-five biotechs have used the IPO route to go public this year—with five of those debuts occurring this month alone.

It’s the most IPOs since 2021, when the industry recorded 78 during the height of the COVID-19 pandemic. August 25, 2026 · 3 min read · Gabrielle Masson Read more A reverse merger provides “a lot more visibility before the stock trades as to who’s in the syndicate and how that’s going to play out,” Katabi told BioSpace.But reverse merger investors need to be patient, with the deals typically taking four to six months to close, according to J.B. Strategy’s tracker.Bannister cited the recent closing of Obsidian Therapeutics’ reverse merger with Galera Therapeutics, which Leerink served as the financial advisor for.

The newly combined company took Galera’s market spot and started trading Aug. 4 on the Nasdaq under the new ticker OBX. Before the merger closed, Obsidian announced a private placement financing of $350 million.

IPO SPACs Line Up To Clear Biotech’s IPO Backlog Blank check deals dwindled after a crazy 2021. Now, biotechs are starting to turn to special purpose acquisition companies again as an easy route to the public markets. September 3, 2025 · 6 min read · Annalee Armstrong Read more “We did that deal in March.

We announced it in April,” Bannister explained. “It didn’t close until the end of July, and the PIPE shares are still not going to be registered for a few weeks. So, if you bought that deal in, you committed in March and your shares aren’t actually tradable until September.”Reverse merger investors can’t be afraid to “wear six months of market risk because they believe in this specific opportunity”—a requirement that tends to weed out hedge funds, according to Bannister.

While planning an IPO can take many months as well, the process is significantly shorter from sign to close, often taking only a few weeks to tender an offer.The rise of reverse mergers isn’t happening in a vacuum. The uptick is part of the overall increase in investor activity that biopharma has experienced this year after the lows that followed the bursting of the pandemic-era bubble. Meanwhile, more than 70 M&A deals have been signed across the industry so far this year, according to S&P Capital IQ data.

That’s compared to 30 total M&A transactions recorded in the first half of 2025.Against this improving backdrop, biotechs are considering a wider set of options. “There are these processes running in parallel at a number of portfolio companies and companies in general,” Katabi said. Having the ability to pursue an M&A deal, a reverse merger PIPE or a more traditional IPO “opens up a lot of options for companies,” she said.

Twitter LinkedIn Facebook Email Print Mergers & acquisitions IPO Gabrielle Masson Gabrielle Masson is an award-winning biopharma editor and writer with more than seven years of journalism experience in life sciences and healthcare. Subscribe to the daily GenePool and weekly Manufacturing Brief newsletters she curates here, and contact her at gabrielle.masson@biospace.com.