BioSpace Reports Crossover Rounds Could Top $4.22 Billion, Extending Biotech’s IPO Reopening

Biotech’s 2026 IPO rebound is being reinforced by a steadier financing signal that started earlier: crossover rounds. These financings, typically the last private round before a company goes public, began to rise around the fourth quarter of 2025, according to Sofinnova Investments general partner Maha Katabi, and now point to a market in which public investors expect the issuance window to remain open.

PitchBook forecast that crossover rounds will top $4.22 billion across about 28 rounds if the 2026 trend holds. BioSpace’s tally shows 20 biotech IPOs this year to date, compared with eight in 2025. For investors and private companies alike, that combination matters because crossover activity is less about sentiment headlines than about actual preparation for public market entry.

The financing signal

According to Katabi and PitchBook senior analyst Ben Zercher, crossover investors did not disappear when the biotech IPO market collapsed after 2021. Instead, they changed their expectations. During the pandemic financing surge in 2020 and 2021, investors often expected a crossover to convert into an IPO within a couple of months. After the market shut, that timeline lengthened.

PitchBook data cited by BioSpace show that while crossover funding spiked in 2020 and 2021, it normalized and stayed more or less steady from 2022 onward even as IPO volumes fell well below pre-pandemic levels. Zercher said the continued activity suggests many investors chose to remain in biotech rather than exit the sector.

That distinction is strategically important. A company willing to raise crossover capital during a closed IPO window can keep building toward public readiness rather than waiting for ideal conditions before starting the process. In that sense, today’s IPO cohort is not simply benefiting from better sentiment; many of these companies were financed in advance by investors prepared to wait.

The road to IPO has stretched

Katabi said the typical time from crossover to IPO is about five to six months, though well-prepared companies with strong syndicates and active investors can compress that to three or four months. She identified company readiness, especially having financials in order, as the limiting factor.

Zercher described obesity-focused Kailera Therapeutics as a relatively typical example of a successful crossover-to-IPO transition in the current market. The company raised a $600 million series B in October 2025 with public investors and then completed a $625 million IPO about six months later. Kailera was already running a phase 3 trial at the time of its offering, giving investors a more developed clinical story to evaluate on the roadshow.

Other companies took much longer. Zercher said some crossover investors waited a full year to 15 months before an IPO. He pointed to Generate:Biomedicines and Eikon Therapeutics as examples of companies that added crossover investors earlier, then were delayed when the market window shut. Both are now part of the IPO class of 2026.

Eikon’s case also shows that reopening does not eliminate pricing pressure. Zercher noted that its $381 million IPO was technically a down round after the company had previously raised $517 million in a series B.

What this says about the market

The current financing pattern suggests selectivity rather than a broad return to the excesses of 2020 and 2021. BioSpace notes that many weakly supported companies went public during the pandemic boom and later failed to deliver, helping shut the market for several years. The companies now reaching market tend to have stronger preparation or more advanced assets.

Crossover capital is also no longer tied exclusively to a traditional IPO exit. Katabi said she has seen more companies pursue reverse mergers as a way to reach public markets with less roadshow uncertainty. Acquisition remains another possible endpoint.

That flexibility changes the meaning of a crossover round. It is still a sign that public investors see a path to liquidity, but not necessarily through a near-term Nasdaq debut. For biotech executives, that widens the set of acceptable outcomes. For investors, it reflects a market that is reopening, but on stricter terms than the pandemic-era rush.