Life sciences had a rough 2025 — the least active IPO market in over a decade — but AI adoption across the sector accelerated anyway. Problem is, the governance infrastructure is still being built around it. Wiggin and Dana partner Katie Rubino examines what that looks like in practice.
2025 began as a year filled with optimism for what was to come. After a rocky patch for the life sciences industry fraught with downturns in IPOs, fundraising hurdles and a new administration, many were hopeful that the life sciences industry would show signs of a recovery.
As the year progressed, the challenges remained. JP Morgan reported that 2025 saw nine life sciences companies exit via initial public offering (IPO), the least active life science IPO market in over a decade.
Despite these challenges, there is continued excitement and notes of an economic shift changing the course for the life sciences industry in 2026. As this year unfolds, the emerging companies market for life sciences companies shows early signs of recovery and a brighter future ahead.
AI and the patent landscape
One of the most noteworthy tools that companies across all industry sectors have started to embrace has been AI. In the life sciences industry, a 2025 report noted that 87% of life science researchers use AI for work-related research tasks, an increase from 75% in 2023. Over 90% of life sciences manufacturers reported that they were using or adopting smart technology. And a 2024 survey by KPMG noted that 64% of life sciences CEOs were prioritizing AI investments, indicating the role of this technology in future scientific research and development.
The United States Patent and Trademark Office (USPTO) itself is embracing AI tools to examine patents with the issuance of Executive Order 14179 in January 2025. The intention behind this executive order was for the USPTO to develop a framework to supply patent examiners with AI tools to help them drive innovation forward. Many are hopeful that this will help speed up patent application review time and increase examiner efficiency.
Most jurisdictions around the world require a human being to be a valid inventor. A key criterion of US patent law is that only natural persons can be deemed inventors on patents. AI cannot be an inventor, regardless of how much AI contributed to an invention. This aligns with other major patent offices around the globe, which also require a human inventor.
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Read moreDetailsExplosion of inventions relating to AI
With the rise in the adoption of AI tools by life sciences companies, there has also been an increase in patent filings for AI-based inventions at the USPTO. In 2016, there were 6,220 patent applications submitted at the USPTO related to AI. By 2020, that number had increased to 14,601. As the number of filings has increased, the advancement of innovations utilizing AI by the life sciences sector has become more sophisticated.
With greater access to data and large language models, many startups are creating unique platforms and algorithms to source drug targets, model disease states, create digital applications and find new therapeutics. These novel ideas are driving the industry forward and creating new intellectual property strategies focused on technology driven developments centered around the life sciences sector.
How to balance using AI with fears of devaluation due to AI
Companies are treating AI as a growth accelerator and using it to enhance existing assets while maintaining value-driven outcomes. AI is being deployed to speed up notoriously lengthy tasks, including shortening discovery cycles, improving target validation, optimizing clinical trial design and improving manufacturing efficiency and scaling.
Simultaneously, companies are focused on generating proprietary datasets that are propelling innovation and discovery. Datasets are often personalized and integrate clinical, imaging and patient feedback data to create novel and precise treatments and predictions.
Many companies that are heavily focused on AI integration appreciate the need to use AI as a tool that cannot replace human judgment and decision-making. AI models are trained to create traceable audit trails to promote transparency and allow for human review of AI outputs. Corporate governance is mandating AI committees to oversee AI implementation and training of employees. Biotechnology companies are positioning AI as a tool in a toolbox that can aid in generating faster progress to assess more shots on goal. Ultimately this helps with forward-thinking momentum and opportunities.
Why investors are optimistic for life sciences startups in 2026
After a turbulent few years, many in the life sciences industry are optimistic about what is to come. AI is helping to speed research and development by offering quicker screening tools, more precise target validation and fewer dead-end programs. While 2025 was a tough year for biotech IPOs, signs are pointing to a bounce-back as merger and acquisition (M&A) activity is on the uptick and capital deployment to the sector is increasing. The expiration of exclusivity of many blockbuster brand-name drugs is also creating excitement in the pharma industry to find new clinical assets, new platforms and new drug delivery systems.
Therapeutic areas that were once considered experimental are now clinically validated and approved by the Food and Drug Administration (FDA), including gene editing, RNA therapeutics, in vivo gene delivery and cell therapies.
This year promises more certainty in regard to regulatory approvals as the drug approval process looks to expedite approvals and allow for more certainty toward applicants. The convergence of scientific breakthroughs, AI efficiency, regulatory clarity and pharma demand are aligning to create the perfect storm ready to disrupt an industry and accelerate the advancement of new treatments and therapies.
Katie Rubino is a partner in the corporate department at Wiggin and Dana in Boston. She frequently represents clients on target discovery collaborations, assisting in structuring spin-offs, divestitures and out-licensing from pharma, hospital systems and academic research institutions. She also counsels life sciences companies developing pharmaceuticals, vaccines, medical devices, antibody products, digital health and medical devices and advises companies raising growth capital, merger and acquisition transactions and initial public offerings. 
