Caribou Biosciences shuttered its off-the-shelf CAR-T program after investors and large pharmaceutical firms moved on from donor-derived cell therapies. Major drugmakers increasingly prioritize in vivo cell therapy technologies that edit cells directly inside the patient's body rather than in a manufacturing facility.
Although the XBI index gained over 20%, specialized biotech fund managers experienced acute underperformance. The rally was driven by tech or AI stocks that biotech specialists rarely hold, while crowded long positions lagged and heavily shorted names rebounded sharply against fund positions.
Despite the NIH nominally allocating more capital toward high-risk, high-reward grants, ongoing funding instability produces a risk-averse environment. Principal investigators fighting to keep laboratories funded adopt defensive grant applications rather than pursuing novel, speculative scientific hypotheses.
The NIH moved away from relying strictly on study-section peer review scores to guide funding decisions, empowering institute directors and political priorities instead. Consequently, investigators can no longer reliably forecast grant awards based on positive peer reviews, generating widespread confusion.
Disruptions and terminations of NIH grants extend far beyond individual lab experiments into the training pipeline. Medical schools across the nation responded to federal funding instability by reducing admissions offers and enrolling fewer incoming doctoral students in biomedical research programs.