Biotech reverse mergers surge in 2026, reaching highest level since 2021 as PIPE financing spikes

Biotech companies are using reverse mergers to re‑enter public markets at a rate not seen since 2021, according to a J.P. Morgan report released in October 2026.

In the first nine months of 2026, J.P. Morgan tracked 27 reverse mergers with a combined value of $7.5 billion. That total is lower than the $9.8 billion recorded in 2025 and the $8.4 billion in 2022, but the pace suggests the year could surpass those figures by year‑end.

The financing structure has shifted dramatically. While only three of the 12 reverse mergers in 2025 involved private investment in public equity (PIPE), 19 of the 27 deals this year used PIPE financing, the highest proportion since 2021.

The trend reflects a broader funding squeeze for biotech firms, prompting many to seek the back‑door route of reverse mergers. Institutional investors have been quick to back these newly public companies, often from day one, providing a lifeline amid tighter capital markets.