The latest BPSI shows significant improvements in biopharma conditions but raises questions about what comes next. Biopharma's mood isn't just running on hopes anymore. The Biopharma Sentiment Index took another step forward in Q2. The headline sentiment score climbed to 96, up from 90 in Q1 and 78 in Q4 2025. Industry sentiment is now within striking distance of the neutral (100) line for the first time since the four-year downturn that followed the pandemic. Previous improvements in sentiment were led by growth in expectations for the future. This quarter, current conditions surged while the 12-month outlook barely budged. It's a sign the recovery is showing up in the day-to-day. But there are a few hairline cracks in the otherwise solid results. The biggest: The 12-month outlook for funding fell 13 points, dipping back into negative territory. If our survey respondents are correct, 2026's record-breaking pace of fundraising may be as good as it gets. window.addEventListener('message', function(e) { if (e.data && e.data) { var h = e.data.height; var frames = document.querySelectorAll('iframe'); for (var i = 0; i < frames.length; i++) { if (frames.contentWindow === e.source) { frames.style.height = h + 'px'; break; } } } }); The Biopharma Sentiment Index is a global benchmark produced by Endpoints Signal. Each quarter, we survey the biopharma ecosystem using the same set of questions across five dimensions: business conditions, finances, fundraising, the regulatory environment and hiring. The result is an easy-to-grasp headline number, with subindexes tracking Current Conditions and Future Expectations. We also explore timely topics such as dealmaking and AI-driven job cuts. The BPSI draws from the expert subscriber base at Endpoints News. The latest report reflects the views of 904 verified respondents, more than a quarter of whom are C-level executives. The Q2 survey was in the field March 31 to April 30, with 904 survey completions. Recession concerns The BPSI is built from two combined subindexes: Current Conditions and Future Expectations (see methodology for how they’re calculated). The split is important, because “how things feel right now” and “how people think things will feel next year” don’t move in lockstep — and the gap is often where predictive value lives. The current conditions benchmark, while still below neutral, continued a dramatically improving six-month trajectory, rising to 87 from 73 in Q1 and just 57 in Q4. Expectations for the year ahead climbed to 102 from 101 in Q1 and 91 in Q4. The industry, on average, expects conditions to stay about the same. Rising interest rates and global uncertainty caused by the US conflict with Iran increased concerns about the potential for a recession and triggered a 13-point drop in expectations for the future funding climate. That uncertainty tempered the outlook for next year considerably. The Q2 survey was fielded in April, following a yearlong run-up of biotech stocks and an acceleration of dealmaking and public-market fundraising. Against that backdrop, current conditions improved by double digits across all measures. For the second quarter in a row, the pace of dealmaking was cited as the top source of optimism. The regulatory environment remained the lowest-scoring measure by far; however, it also showed the most improvement of the bunch — a thaw in the survey's coldest corner. The 12-month outlook for the regulatory climate jumped to 90 from 72 last quarter and 68 in Q4 — still net negative but a bit less bleak. Assessments of current regulatory conditions climbed to 50 from a rock-bottom floor of 23 six months ago. Differing opinions The Q2 results reveal significant differences of opinion by job role and sector. Confidence is high among analysts and senior executives, while scientists, staff and academics remain pessimistic. People in investment roles — whether internal business development professionals or outside investors — were the most bullish about pretty much everything. Biotech is hiring; pharma is firing One of the most optimistic themes coming out of the core BPSI is the state of hiring. For the first time, respondents said their companies were hiring more than a year ago, and the outlook for 12-month headcount was even more upbeat. But the hiring mood was far from universal — just look at the chasm between biotech and pharma. Half of biotech respondents said they expect their companies to add to headcount over the next year, while only 16% anticipate cuts. In pharma, the balance was flipped, with respondents three times more likely to expect layoffs than hiring. Bosses were more optimistic than employees across every metric we tracked. That's been a consistent theme for the past six months; executive leadership felt the early signals of a sector rebound last year — through markets, deals and financing — while research teams still operated under conditions caused by years of retreat. Until now, executive optimism has been a leading indicator of improving conditions on the ground. We'll see if that continues. Heading into 2026, the starkest difference of opinion was between investors (119) and scientists (74) — a dramatic 45-point BPSI gap. That split was forged last year during the Trump administration's attack on research funding, when the NIH and FDA were hemorrhaging staff and some academic labs were forced to interrupt grant-funded research. Investors who were watching dealmaking and stock prices rocket up, saw a different industry entirely. Biopharma's fault lines In Q2, scientists posted the biggest mood shift of any cohort (+14), while investors eased back 6 points but stayed firmly optimistic. The gap between them compressed by nearly half. Other fault lines moved less dramatically. The biotech vs. pharma gap narrowed modestly. Regionally, North America, Europe and Asia all saw improving sentiment — but Asia's lead widened slightly; it's the only continent with a net-optimistic reading. Deals, deals, deals Dealmaking remains the brightest spot in biopharma sentiment. In the second quarter, it was the single biggest reason respondents gave for being optimistic about the industry — identified as such by a third of respondents. This year has brought 19 biopharma M&A deals worth $1 billion or more. That pace would make 2026 the highest-count year on record for $1 billion-plus transactions, according to analysis from Tim Opler at Stifel. Total M&A could top $250 billion, which would make it the second-most-active year in biopharma history, by total value. Licensing transactions tell a similar story: Upfront payments reached $4.9 billion in Q1 — a pace that, if continued, would make 2026 a record year as well. Looking ahead, 58% of BPSI respondents expect dealmaking to accelerate in the next 12 months. Only 9% expect a slowdown. Even in a quarter when the industry mood has lifted, it’s worth remembering that more people still say conditions are worse than a year ago. The most consistent message for the past three quarters is that political uncertainty is holding back the industry. In the open-ended questions of our Q2 survey, the words "uncertain" and "uncertainty" were used by 167 unique respondents — the most common of more than 300 keywords we tracked. Politics and pessimism Trump's "most favored nation" (MFN) pricing policy got most of the headlines, and the administration has since pushed to codify those deals into law. Lawyers are advising biopharma clients on licensing-contract workarounds to dodge the reference-price requirements. But in the BPSI survey, the industry's response to all of it was mostly a collective shrug. Just 7% of respondents think MFN-style policies will significantly lower US drug prices, while a 53% majority expects the policies to get watered down and have little lasting impact. One thing we didn't ask in the survey, but should have, is whether MFN pricing would lead to delays in launching new drugs in lower-cost reference countries — numerous respondents wrote that in as the most likely outcome. Even if MFN pricing isn't single-handedly responsible for biopharma pessimism, the US political climate more broadly might be: 46% of respondents named politics as their top source of pessimism, up from 44% in Q1. The next four biggest concerns cited by respondents fall under the political umbrella as well — regulatory environment, pricing climate, cost of capital and trade and tariffs. On the optimistic side of the ledger, dealmaking, the pace of discovery and AI account for 72% of reasons for optimism. Respondents also grew a little less pessimistic about the threat that China's innovation poses and a little more optimistic about the opportunity there. AI job turnover Artificial intelligence remains one of the industry's top three reasons for optimism. Last quarter, 74% of respondents told us they expect AI to accelerate drug discovery in 2026. Less explored: what AI means for the people doing the work. So we asked respondents how they expect AI to affect headcount in their own departments over the next year. The answer, so far, looks relatively optimistic. A 41% plurality expect no change at all from AI. Another 37% see a mix of AI-related hiring and other roles being eliminated — the messier in-between that shows up in tech-sector workforce data, too. About 14% see AI driving net job cuts over the next 12 months, while 7% expect net hiring in order to take advantage of AI growth opportunities. Respondents in pharma and biotech view the AI impact on headcount very differently. Big pharma is more than twice as likely (23%) as biotech (11%) to expect AI-related layoffs in the next year. The difference could be partly due to big pharma being quicker to adopt AI; half of biotech expects no AI-related job changes at all. Large drugmakers are also staring down a $300 billion patent cliff, with Merck and Pfizer already in the middle of reorganizations to brace for upcoming losses on Keytruda and Eliquis. Eli Lilly's Dave Ricks has been blunt about trying to keep headcount flat even as revenue grew 45% last year. In that context, AI becomes one of several levers being pulled at once. Biotech is in a different position: Companies are hiring and using AI more often to extend small teams than replace them. Retreat from DEI One of the broader workforce stories of the last year has been the corporate retreat from diversity, equity and inclusion initiatives — such as ensuring people of different backgrounds are paid similarly for the same roles. The pullback was especially sharp in the US, where the Trump administration's executive orders against federal DEI programs created political and legal pressure for large employers to follow. One quarter of total respondents say DEI initiatives at their organization decreased over the past year, while just 4% say they increased. The remainder reported no change or that they weren't sure. Big pharma reported the steepest net pullback, followed by finance and investment firms. Biotech and consultancies have moved less. Geographically, the picture splits along the same fault lines that show up across the Q2 BPSI: North America changing the most, Europe more measured, and Asia unaffected. China even saw a net increase in DEI programs, though the sample size wasn't big enough to draw conclusions. Evolving relations with China Biopharma companies are overwhelmingly betting on more collaboration with China, not less, even as Washington pushes to curb China's rising influence. Three-quarters of BPSI respondents expect Western R&D collaborations with China to increase over the next five years. Just 12% expect a decrease. This year continued the drumbeat of cross-border deals with China: AstraZeneca paid $1.2 billion upfront to license CSPC's obesity assets and committed a separate $15 billion to expand its China manufacturing and R&D, Genentech licensed an RNAi candidate from SanegeneBio for $200 million upfront, and Sanofi licensed Sino Biopharm's transplant drug for $135 million upfront. Gilead Sciences, UCB, Boehringer Ingelheim and Lilly each cut new deals with Chinese partners, and a wave of US-based startups launched around China-originated assets. “In-licensing from China will play a huge factor,” said a respondent in pharma business development with nearly two decades of experience. “Too many companies have shut down or downsized in the past two to three years, and not many innovative platform or preclinical-stage companies are around anymore to fill the future pipeline gaps." The National Security Commission on Emerging Biotechnology has projected that by 2040, Chinese drugs will account for more than a third of new FDA approvals. The biopharma rebound is no mirage, according to the Q2 BPSI. The hiring outlook turned positive, scientists climbed out of the sentiment basement and M&A is on a record pace. Six months ago, the BPSI was at a deeply pessimistic 78. Today it's 96 — within striking distance of the neutral line on the back of a recovery that's now widely visible. Political uncertainty still rules, but for now, the mood was well captured by a North American financial analyst: "The bottles of champagne have run low, but compared to this time last year, it's positively ebullient." Methodology The Biopharma Sentiment Index (BPSI) provides a disciplined, forward-looking measure of confidence across the global biopharmaceutical industry. The structure draws inspiration from the University of Michigan’s Consumer Sentiment Index, adapting that framework to the unique dynamics of life sciences. The survey universe is drawn from the Endpoints subscriber base, which comprises a wide cross-section of the global biopharma community. The sample includes investors across venture, private equity and public markets; C-suite and senior executives; clinical and R&D staff; commercial employees; and policy and regulatory professionals. Company types span biotech, pharma, CROs, CDMOs, generics manufacturers and financial institutions. Access requires an Endpoints account to ensure that all responses are tied to verified industry participants. Each quarterly survey seeks at least 900 completed surveys. Responses are analyzed by role, company type and geography to identify significant categorical variations. The Q2 2026 survey was in the field March 31 to April 30, with 904 survey completions. The survey is conducted online at the end of a calendar quarter. Respondents are asked, via emailed invitation, to complete a short survey that balances rigor with ease of completion. The median time to complete it is just over three minutes. Survey design The BPSI survey consists of five paired questions that form the backbone of the index. Each question is posed in two forms: one focused on current conditions and another framed as expectations for the year ahead. Responses employ standardized three-point scales — such as “Better / Same / Worse” — with slight variations to align with the wording of the question. A variation of “Don’t know” or “Not applicable” was always available, and those responses were excluded from scoring. Creating the baseline The Biopharma Sentiment Index (BPSI) draws inspiration from the University of Michigan’s Consumer Sentiment Index in its overall design: a small set of core sentiment questions split between current conditions and future expectations, and an index value constructed from diffusion-style scoring. However, the focus of questions, wording and scaling system is unique to biopharma and was developed independently by Endpoints Signal. Diffusion scales like the BPSI are excellent at capturing breadth of sentiment, but they come with a well-established positivity bias, particularly in the context of business sentiment surveys. The share saying “better” tends to exceed those saying “worse” — even in neutral years. To correct for systematic bias, we normalize the BPSI to “100 = neutral” footing. Readings significantly above or below the 100 baseline should indicate net optimistic or pessimistic conditions. To determine our rebasing factor, we analyzed the long‑run experience of the University of Michigan’s consumer sentiment series. Michigan uses its own version of weighting — by indexing a score of 100 to a single base year: 1966. This formula for rebasing has been found to significantly overcompensate for positivity bias, resulting in an average consumer sentiment score of roughly 84.5 instead of 100. Using Michigan’s decades of publicly available data, we can calculate a rebasing factor that should put us much closer to our intended 100 = neutral baseline. From the historic records, we calculate that the average unweighted per-question diffusion score in Michigan’s index is 111. From there, we arrive at a simple neutralizing multiplier of .9 (𝑘 = 100/111 = 0.9), which should more accurately result in “100 = neutral” scaling. This rebasing method is simple, keeps the index results closer to the raw data, and is supported by an extensive record of data. Index construction The five current-condition questions are used to create the Current Conditions subindex (BPSI-CC), while the five forward-looking items are averaged to form the Expectations subindex (BPSI-EX). For each of the five questions in a subindex, a Relative Score (RS) value is determined by subtracting the percentage of negative responses from the percentage of positive responses. Each subindex is an average of these five Relative Score values, rebased to 100 and scaled using the neutralizing multiplier. These subindexes are combined into the headline BPSI with a weighting of 40% current conditions, 60% future expectations. BPSI-CC = ((average RS_CC) + 100) * 0.90 BPSI-EX = ((average RS_EX) + 100) * 0.90 BPSI = (0.4 * BPSI-CC) + (0.6 * BPSI-EX) Since the rebasing is only done for the final indexes (CC, EX, BPSI), those figures will appear lower than Relative Score results viewed in isolation. The heavier weighting on expectations mirrors the methodology used in the Michigan consumer confidence framework and reflects the greater importance of forward-looking sentiment for forecasting purposes. The first issuance of the survey established a base period. Subsequent waves are reported both as absolute scores on the “100 = neutral” scale and as quarter-over-quarter and year-over-year comparisons. The “100 = neutral” guideline is neither precise nor expected to be consistent over time. It provides a key reference in the early quarters of the BPSI, but it’s likely that quarter-over-quarter comparisons will ultimately take precedence, just as they have with the Michigan index. To keep the BPSI responsive to current issues, each quarterly wave includes a small set of “pulse” questions. These rotate quarterly and cover topical issues such as the outlook for M&A and the anticipated productivity impact of AI. The pulse questions provide context for the BPSI report but are not factored into the headline sentiment scores. Several open-text prompts are included. These qualitative responses provide nuance and color to the quarterly reports. Data quality and checks Several safeguards are in place to ensure the quality of responses. For example, results are screened for duplicate submissions by login-defined URL and flagged for unusually fast completions paired with straight-line answers. Additional safeguards may be taken as necessary. With each release, the report discloses sample size and any methodological changes so that users can interpret the index transparently. To ensure transparency, a full methodology is updated with each quarterly report. This appendix includes the core-question wording, demographics, response distributions and indexing formulas. The consistent application of these methods will ensure a reliable measure of industry sentiment. Methodology updates In Q2 2026, we made a minor methodological update to how Relative Scores are calculated. Previously, we included "don't know" answers in the denominator of our Relative Score calculations, which added minor statistical noise. Removal of those responses from RS calculations didn't affect the headline numbers from previous quarters but did cause small shifts in Relative Score analyses. We also lowered our response target to 900 from 1000. Citing the BPSI The BPSI was created to be a tool for anyone with an interest in biopharma. Endpoints welcomes you to use our data and charts, with credit given to Endpoints Signal, the intelligence platform of Endpoints News. When possible, please include either a link to this report or the full URL so others may discover it, too: https://endpoints.news/biopharma-sentiment-index-q2-2026/ If you have any feedback about the BPSI or ideas for future pulse questions, drop us a line at signal@endpoints.news. We love hearing from you.