The biotechnology funding environment between 2022 and 2024 represented the most severe downturn since the 2008-2009 financial crisis, and its effects on senior hiring in the life sciences were both more specific and more lasting than the broader macroeconomic narratives suggested. The XBI (S&P Biotechnology Select Industry Index) declined approximately 60% from its February 2021 peak to its October 2022 trough, biotech IPO proceeds fell by more than 90% between 2021 and 2022, and venture financing for clinical-stage companies contracted sharply as crossover investors retreated to public markets and traditional biotech VCs tightened their criteria for follow-on funding.
The hiring consequences were immediate and specific. Companies that had raised Series A and B rounds in the 2020-2021 boom found themselves with 18 to 24 months of runway and diminishing prospects for raising additional capital at acceptable valuations. The response was predictable: hiring freezes, headcount reductions, and the deferral of all non-essential leadership hires. This piece examines how the downturn affected specific roles and functions, which positions recovered first as funding conditions improved, and what the cycle teaches about career planning in an industry where capital availability directly determines employment opportunity.
The 38% cut in clinical-stage hiring
Our placement data shows a 38% decline in VP-and-above placement volume at clinical-stage biotechs between the peak quarter of 2021 and the trough quarter of 2023. This decline was not uniformly distributed across functions. The hardest-hit categories were:
Commercial leadership. VP and SVP of Commercial roles at pre-commercial biotechs were among the first positions eliminated or frozen. Companies that had hired commercial leaders 2 to 3 years ahead of anticipated approval dates in the 2020-2021 boom discovered that their timelines had stretched (due to clinical delays or regulatory complexity) while their runway had shortened. The result: commercial hires that had been made in anticipation of a 2024 launch were cut when the launch timeline extended to 2026 and the company couldn’t fund the intervening period.
Business development and alliance management. Partnership and licensing activity declined as both buyers (large pharma) and sellers (clinical-stage biotechs) became more cautious. Companies that had built BD teams to pursue multiple simultaneous partnership discussions scaled back to one or two priority deals, eliminating BD leadership positions in the process.
General and administrative expansion. Finance, HR, legal, and IT leadership positions that had been created during the rapid scaling of 2020-2021 were consolidated or eliminated as companies returned to leaner operating models. A biotech that had hired a VP of People Operations, a VP of Finance, and a General Counsel in anticipation of scaling to 200+ employees found itself at 80 employees with three VP-level G&A positions that the reduced organization could not support.
The functions that were least affected by the downturn were those most directly tied to the clinical programs that represented the company’s core asset: clinical development, regulatory affairs, and CMC/manufacturing. Even companies that cut aggressively in other functions maintained their clinical operations teams because the alternative — stopping or delaying the clinical program — would have destroyed the company’s primary source of value.
Which roles recovered first
As biotech funding conditions began improving in late 2023 and into 2024 — driven by improved public market sentiment, a partial reopening of the IPO window, and continued large pharma M&A appetite for clinical-stage assets — hiring recovery followed a specific sequence that reflected the industry’s priorities:
Regulatory affairs recovered first. Companies that had maintained their clinical programs through the downturn found themselves approaching regulatory milestones (IND submissions, pre-NDA meetings, advisory committee preparations) that required specialized regulatory leadership. VP and SVP of Regulatory Affairs positions were among the first to reopen because these milestones are time-sensitive and the consequences of regulatory missteps are severe. Our regulatory affairs placements in Q2 2024 were 15% above Q2 2023 levels.
CMC and manufacturing recovered second. Process development, manufacturing scale-up, and supply chain leadership positions recovered as companies with positive clinical data began preparing for potential commercial manufacturing. The CMC function is particularly bottlenecked because the expertise required — large-molecule process development, technology transfer, commercial-scale manufacturing — is scarce and takes years to develop. Companies that had deferred CMC hiring during the downturn found themselves competing intensely for a limited pool of qualified VP-level CMC leaders.
Clinical operations recovered third. As new funding rounds closed and new clinical programs initiated, VP of Clinical Operations and Head of Clinical Development positions reopened. The recovery in clinical operations hiring was closely tied to the pace of new IND filings, which began accelerating in mid-2024 as companies that had conserved cash during the downturn deployed new capital into clinical programs.
Commercial and BD recovered last. Commercial leadership hiring did not meaningfully recover until companies had both positive clinical data and clear line of sight to regulatory approval — conditions that were not widely met until late 2024 for the companies that survived the downturn intact. BD recovery was similarly delayed, tied to the resumption of partnership activity as both biotech and pharma became more confident in the capital market environment.
What the IPO window reopening means
The partial reopening of the biotech IPO window in 2024 — with several clinical-stage companies completing IPOs after a near-complete shutdown of biotech IPO activity in 2022-2023 — had immediate implications for senior hiring. IPO preparation requires specific leadership that many private biotechs do not have: a CFO with public-company experience, a General Counsel who can manage SEC reporting requirements, investor relations capability, and a commercial or medical affairs function that can support the increased scrutiny that comes with public-company status.
The IPO-preparation hiring cycle typically begins 12 to 18 months before the anticipated offering date and creates concentrated demand for specific profiles. VP of Finance/CFO candidates with prior biotech IPO experience are the most sought-after, followed by General Counsel candidates with SEC reporting experience and VP of Investor Relations candidates with buy-side or sell-side biotech coverage backgrounds. The compensation for these IPO-preparation hires tends to be at the upper end of the market because the hiring company needs the specific credential (a completed IPO on the candidate’s resume) rather than general functional competence.
For senior professionals evaluating opportunities at pre-IPO biotechs, the IPO window status is a critical variable in assessing both the probability of a liquidity event for their equity and the timeline on which that event might occur. Companies that have filed confidential S-1 registrations or publicly announced IPO intentions offer more tangible upside than companies that are "considering an IPO in 12 to 18 months" but have not taken concrete steps toward it.
Compensation effects across the cycle
The funding downturn produced a bifurcation in biotech compensation that persisted through 2024. Companies with strong clinical data and adequate funding maintained or increased compensation to retain critical leadership through the downturn. Companies that were cash-constrained reduced bonuses, deferred equity refreshes, and in some cases implemented salary reductions for senior leadership.
The most significant compensation effect was on equity: the combination of declining biotech valuations and reduced funding activity meant that equity grants made in 2022-2023 were, on average, granted at lower strike prices than equivalent grants in 2020-2021. For professionals who joined well-funded biotechs during the downturn and whose companies subsequently recovered, the lower grant-date valuations produced outsized equity returns when valuations improved. The 2022-2023 equity grants at companies with positive clinical data are emerging as some of the highest-return equity positions in our tracking data, precisely because they were granted at the bottom of the valuation cycle.
For professionals who remained at companies that did not recover — those whose clinical programs failed or whose funding ran out — the downturn period represented a genuine compensation loss: reduced bonuses, underwater options, and in some cases involuntary separations without the severance provisions that a healthier company would have provided. The binary nature of biotech careers was fully on display during this period.
Lessons for career planning
The 2022-2024 biotech funding cycle provides specific lessons for career planning in the life sciences that apply to future cycles as well:
Clinical data quality is the single best predictor of career stability. Professionals at companies with strong clinical data retained their positions and their compensation through the downturn; professionals at companies with weak or ambiguous data were the first affected by cuts. When evaluating a biotech opportunity, the quality and maturity of the clinical data should be weighted more heavily than the company’s funding level, because adequate data attracts funding while inadequate data repels it regardless of prior investor commitment.
Regulatory and CMC expertise is the most recession-resistant functional area in biotech. These functions were the last to be cut and the first to recover because they are directly tied to the clinical programs that represent the company’s core value. Professionals in these functions experienced less disruption during the downturn and had more options during the recovery than their counterparts in commercial, BD, or G&A functions.
Cash compensation should be weighted more heavily than equity during downturns. Equity at biotech companies that may not survive the funding environment has an expected value that may be close to zero. Professionals who accepted below-market base salaries in exchange for larger equity grants at distressed companies during 2022-2023 took on more risk than the headline grant numbers suggested. In future downturns, preserving cash compensation and benefits — even at the expense of a smaller equity grant — is generally the more prudent approach for professionals who cannot afford to treat their equity as a pure option position.
Final thoughts
The 2022-2024 biotech funding downturn was painful for the industry and for the professionals who work in it, but it was also cyclical rather than structural. The underlying demand for innovative therapeutics, the productivity of the biotech R&D model, and the large pharma industry’s dependence on biotech-sourced pipeline assets all remain intact. The professionals who navigated the downturn most successfully were those who understood the cyclical nature of biotech funding, positioned themselves in roles tied to clinical programs with strong data, and maintained the external visibility and professional network that enabled them to find new opportunities when their situations changed.
For current compensation benchmarks across pharma and biotech roles, see our regulatory counsel compensation report. For guidance on equity negotiation at pre-IPO biotechs, including how to evaluate equity grants in different funding environments, see our biotech equity vesting guide.