Biotech start-ups struggle as Trump throttles NIH funding

The National Institutes of Health has effectively frozen issuing new grants and has reduced funding so far this year by about $3 billion compared with the same period in 2024 .

Start-ups spun out of university labs have furloughed employees or scaled back key features of their work after not getting funds they had counted on.

Start-up founders describe impacts ranging from furloughing staff to compromising patient safety.

NIH rollbacks also are rippling across major companies that sell advanced tools to academic labs.

The level of federal research funding directly influences the number of inventions discovered by universities.

Companies are looking for things that are less risky, experts say.

David Yang , an investor at Lux Capital , said that the ability of Chinese biotechs to engineer and test new molecules has already exceeded expectations. “If you cut the very single advantage that America has in this entire field of biomedicine, which is to come up with new ideas, you are creating a double-whammy situation,” he said, in which the U.S. falls behind in both engineering and generating the hypotheses that lead to novel therapies. “It comes at a very inopportune time.”.