One Battle After Another
Life sciences CEOs are not navigating a single disruption. They are managing five at once, each compounding the others. Last week I shared some of what I am hearing from them at the BLS meeting.
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Last week I spoke at the Berkley Life Sciences Producers Meeting about what is keeping life sciences CEOs awake at night. The Vanguard Network’s life sciences CEO membership includes approximately 400 leaders, with an elite group of fifty premium members. What makes these conversations useful is the format: no podiums, no presentations, no performance. CEO-to-CEO, on the questions that actually matter. What I hear in those conversations is candid in a way that prepared remarks rarely are.
The picture that emerges right now is not comfortable. By several measures, this is the most difficult operating environment life sciences leaders have faced in recent memory. A record number of sector bankruptcies. More than thirty percent of life sciences companies entered 2026 with less than twelve months of cash on hand. Investment has narrowed sharply toward later-stage assets, leaving pre-revenue companies starved of the capital they need to move science forward. Pipeline projects have been stalled or cancelled under the weight of converging pressures. And that is before the regulatory and geopolitical dimensions enter the picture.
Five concerns dominate the conversations I am having. They are worth taking seriously, because they point not only toward what is difficult right now but toward what effective leadership actually requires in conditions like these.
Regulatory Risk: Disruption Without a Replacement Architecture
Approximately 4,500 FDA employees were fired in 2025, alongside perceptions of growing politicization inside the agency. At NIH, more than 25,000 staff have been let go since 2024. Some 2,291 research grants have been terminated and $2.45 billion in research funding rescinded. Clinical trials have been disrupted mid-stream.
The result is pervasive uncertainty about regulatory pathways, slowed and halted projects, serious morale challenges, and genuine investor concern about the stability of the environment in which these companies operate. Lots of CEO agree that the regulatory agencies could do with less bureaucracy and more agility. But what they are seeing today has less to do with reform, and more about damaging disruption. In a science-based industry that depends on regulatory partnership to function, the difference between reform and dismantlement is not academic.
The China Card
China has moved well beyond its historical role as a manufacturing center and clinical trial resource. IND applications accepted by China’s regulatory authority rose from 688 in 2019 to 2,298 in 2023. In 2024, China approved 83 new drugs. The United States approved 50.
U.S. life sciences CEOs are shifting significant manufacturing and clinical trial activity to China and exploring the creation of innovation hubs there. The drivers are lower costs and acceptable quality, but the factor that surprises most observers is a third one: greater regulatory and economic stability. Leaders making these moves are doing so carefully, without public statements. The caution is understandable. The direction of travel is not.
When U.S. executives cite regulatory stability as a reason to move scientific operations to China, that is not a talking point. It is a structural signal about what this environment has become.
New Technologies: Opportunity Inside the Pressure
Not everything in these conversations is defensive. New technologies are front of mind for these leaders in two ways: as tools for simplifying and accelerating the creation of medicines, and as enablers of entirely new categories of innovation.
One example worth noting: Morphoceuticals is applying AI to build a platform based on electrical signaling between cells, a line of research that would have been difficult to pursue seriously even a few years ago. The point is not that one company represents a trend. The point is that the underlying science is opening in multiple directions simultaneously, and the leaders who will benefit most are the ones who can read those signals early and position accordingly, even while managing the pressures described above.
Talent: A Problem Being Created Right Now
There is growing concern that generative AI is eliminating entry-level positions faster than most organizations anticipated. The work these roles provided, drafting, synthesis, early analysis, is being absorbed by tools that require no development arc. The efficiency argument for this is straightforward. The downstream consequence is less visible.
Entry-level positions are where judgment forms. They are where people learn to read a situation, take accountability for outcomes, and develop the professional instincts that cannot be taught in a classroom or compressed into a later career stage. The CEOs raising this question were not being protective of headcount. They were identifying a structural problem: in five to seven years, when these organizations need leaders who came up through the work, where will they have come from?
This concern sits alongside a separate talent challenge. The regulatory environment is proving actively discouraging to researchers and clinicians who came to this sector because the mission was clear, even when the science was hard. Morale and retention pressures are real, and they are not the kind of problem that resolves quickly.
Investor Sentiment: Return, but Not Broadly
Investment is beginning to return to the sector, but it is concentrated in companies with later-stage assets. Pre-revenue companies remain largely cut off from traditional capital. The concern among CEOs is that this dynamic, left uncorrected, will sharply reduce U.S. life sciences innovation over the coming years, or accelerate its migration elsewhere.
A potential bright spot: family offices and sovereign wealth funds may be stepping into some of the gap. Whether they can fill it meaningfully remains an open question.
What High Performance Actually Requires
The five pressures these leaders are navigating also clarify what effective leadership looks like in conditions like these. Life sciences CEOs frequently come from scientific backgrounds, which brings real strengths and a specific set of tendencies: command-and-control instincts, linear decision-making, a focus on the science over the market. In a stable environment, those tendencies are manageable. In a disrupted and unpredictable one, they are liabilities.
What I am observing in the leaders who are navigating this well is a deliberate shift. They are leading through persuasion rather than authority. They are building active mechanisms for sensing and interpreting a volatile environment, not monitoring in the passive sense, but genuine signal-gathering from peers, from the edges of their organizations, from places where change arrives before the center notices. They are holding uncertainty without transmitting it as anxiety.
Above all, they have made a pivot that is harder than it sounds: from delivering predictability to mastering adaptability. The institutions around them, boards, investors, partners, still reward the language of predictability. The leaders who are performing well have learned to maintain that language while operating, internally, with a different discipline entirely.
The sector has always been hard. What is different now is the convergence. The leaders who will emerge from this period strongest are not necessarily the ones with the best science or the most capital. They are the ones who are doing the leadership work now, before the conditions improve.