This is the latest installment in a new series where BioPharma Dive uses data visualization to recap what’s going on across the industry. Today, we’re looking at the recent pullback in a prominent biotech index and this year’s upswing in startup acquisitions.

The biotechnology sector has unquestionably recovered from the doldrums it had been mired in during the previous few years. An acceleration in dealmaking and more regulatory certainty, among other factors, have fueled investor optimism as well as a resurgence in initial public offerings.

The XBI, a closely watched index of biotechnology stocks, has correspondingly climbed over the last year. At one point in August, the XBI reached nearly $170 a share, more than doubling its price 12 months prior.

Since then, though, the XBI’s gains have ended. A stretch of disappointing clinical trial readouts, rising interest rates and investor apprehension about the outcome of the midterm elections have led to a steady erosion in price. A slowdown in public company acquisitions hasn’t helped either. The XBI “has traded sideways for the past few months,” Cantor Fitzgerald analysts wrote in an Oct. 2 client note.

Analysts at Raymond James expect the tepid sentiment to continue. Investors have become “more cautious,” they wrote in a Wednesday report. Though about half of the investors the firm surveyed believe the XBI will start climbing again before the end of 2026, some now believe it’s “more likely” to drop, a “notable change in tone from earlier this year.”

So far in 2026, biotech startups are being acquired at a faster clip than their publicly traded counterparts. BioPharma Dive data show that 26 privately held companies have been purchased this year in deals involving at least $50 million in guaranteed proceeds, versus 21 such deals for public biotechs.

Driving that surge is a bumper crop of biotechs that stayed private during a multiyear IPO slowdown, said Michael Allwin, William Blair’s head of biopharma research, in an interview with BioPharma Dive.

Those companies, in many cases, now have clinical data to show prospective buyers. They are also “not in a rush, and have more tools in the toolbox to be thoughtful about strategic exits,” Allwin said.

The momentum toward private company purchases has been building for a few years and is now resulting in larger transactions. According to William Blair research, the median startup acquisition was worth $496 million in 2023. That figure has skyrocketed to $1 billion in 2026, a year in which private M&A deals have already outpaced the totals of the previous eight years combined.

These purchases accounted for the majority the dealmaking activity during the third quarter, when there was a relative dearth of public company buyouts. Still, some analysts expect a shift. On a recent podcast, RBC Capital Markets analyst Brian Abrahams pointed out that the three-month stretch between July and September is typically slow for M&A. Dealmaking tends to rebound afterward and, at least historically, M&A activity hasn’t been affected by interest rate fluctuations, he said.

A perk-up in public deals could “reassure” investors, stabilize the sector and “improve sentiment,” Abrahams added.