A Look at the New-Look Biotech

Claire Riches, Citeline VP of Clinical Solutions, and Ross Pettit, Chief Development Officer at Kestrel Therapeutics, discuss all things biotech, from TAs and diseases to ROI, the rise of China, board management, and overall trends.

Season two of our popular podcast series, “Small Biotechs, Big Decisions,” recently kicked off with host Claire Riches, Citeline VP of Clinical Solutions. In this episode she’s joined by Ross Pettit, Chief Development Officer at Kestrel Therapeutics, to talk about the new-look biotech.

Kestrel Therapeutics is a clinical-stage biotechnology company focused on developing medicines for patients with intractable cancers driven by KRAS mutations. And Pettit has been in drug development for close to 40 years — CRO, small pharma, and mid-size pharma.

“I track what's happening with the biotech world very, very closely,” Riches said. “If we look at the whole landscape, there's just under 24,000 drugs in development as of the end of 2025, which is insane, you know, if you think about where figures were 10 years ago.” Riches noted there was no shortage of assets coming through the pipeline, adding that roughly 40% are in oncology/cancer indications, but that area is not growing. [See our Pharma R&D Annual Review 2026 for a full review of industry trends.]

Therapeutic areas and diseases

What area is growing? Metabolic diseases, which Riches said is not surprising. However, she said just under 20% of the pipeline is in rare disease. “It is phenomenal to see that many drugs being developed in rare disease, and a lot of that sits squarely within the biotech market.”

When asked what’s causing this trend, Pettit said, “There's a certain amount of an altruistic approach now, with smaller companies saying, ‘There's a need here.’ I think pricing models allow them to actually develop in the rare disease space.”

While oncology has remained stable, Pettit said other “big zones” such as cardiology have minimized. “In oncology,” he said, “they're constantly looking for new targets. ... I think people want to be either best in class or first in class. I think that narrows the field.”

Riches said what's also interesting is the number of companies developing drugs is increasing, with just under 7,000 companies at the end of 2025 developing drugs. But of those companies, only 5% of the nearly 24,000 assets sits with the top 10 pharma, 10% with the top 25 pharma, and the rest sits within biotech. “If you think about that share of pipeline,” she said, “it's quite spectacular.”

Pettit’s take on trends

Pettit agreed but noted that the pipeline is constantly evolving or revolving. “Most of us have got that one or two shots on goal and driving value. … I think it's just good science being translated into a development model.”

That said, Pettit conceded, “Our big-pharma colleagues obviously hold the might, if you like, and they certainly hold the volume. ... They're looking for strong assets that have got a high return on investment.”

In terms of biotechs, Riches said they have been become “much more deal-driven, more governance-savvy.” She asked Pettit for a snapshot of how a biotech looks and feels today.

“It's definitely changed,” he said, emphasizing that this did not happen overnight. “I think biotech has become lean. We've used partners far more effectively. We've worked with CROs and other vendors, and that's just part of our daily life.

“What I'm looking for in a partner is just that: a partner. I'm not looking for a vendor anymore. … I think that the Nirvana, the sort of expectation we'd really like to see is that they have the same passion and the same knowledge about our asset, about our drug, that we do.”

However, Pettit acknowledged that “it's just the nature of business and economics; we still see a lot of box-checking. … OK, now I'm done. I can wipe my hands of it.”

Board management

Riches peppered Pettit with questions: “Do you think there's still ambition to take drugs to market, or is that rarer nowadays? What does a board look like these days at a biotech and what are they needing from you in your development role?”

Pettit now sees biotech as a milestone-driven group. “I think boards have certainly evolved, probably more than any one group in the biotech world.” He referred to boards’ composition (moving away from high science founder-based to operators to purely finance VC-based), cadence, and their philosophy on how they work with management being much more involved than in the past.

Asking Pettit to dig deeper, Riches asked: “What does that ideal board management, dynamic, and tone look like for you?”

“I think that … one of the most important relationships that's built, right off the bat, is between the CEO and his board, or her board, and I think that sets the tone of those board relationships,” Pettit said. “It sets the expectation of what the board is going to see when they come into meetings.” He said the days of the board wanting unparalleled optimism is gone. “They now want clarity.”

The reality of ROI

Riches shared another industry statistic: Less than 10 years ago, one in 10 assets being developed made it to market. “That number now is one in 16. And rapidly increasing,” she said, citing artificial intelligence (AI) as one factor driving drug development very quickly. With that in mind, she asked, “What does ROI look like for a biotech?”

“I think that's one of those profile things that's changed the most,” Pettit said. “I think ROI before was fast growth. Build, build, build, bring drugs to market. ... I think boards now come in in a much more gated fashion. It's stage gated. … How am I going to generate return on investment by reducing risk? I think that's what it comes down to.”

The rise of China

Returning to the topic of AI, Riches said one of the big trends in the last couple of years is the rise of China, “very much related to the fact that they have invested heavily in AI.” In 2010, the US held 55% and China held a mere 1% of the total biopharma pipeline. In 2025, the US held 40% while China shot up to 25%. Riches predicts these China biotechs will need to partner, sell, or move out of China, and asked for Pettit’s take on this.

“First of all,” he said, “we can't be timid about China in any way. … China's actually set the bar for speed of execution, lower cost, just sheer volume and productivity, and we can't ignore that. … I think we've got to learn from our partners in China.

“There are some very farsighted, foresighted Chinese companies … who've already stepped out of China. They now see themselves as international companies.... They just have a very strong infrastructure. … There's some really robust science coming out of China. We need to leverage it.

“It's bi-directional. We can get assets from China. China can get assets from us. … I think it's a wake-up call for us.”

The view ahead

Riches posed a final question to Pettit: “What does 2026 look like for you, look like for the biotech market?”

“It certainly seems that there's a level of optimism about funding,” he said. “We've already seen a few IPOs hitting the market. … Personally, I think it's going to be a very, very busy year, but I hope it's busy for the biotech clients. I think biotech was stagnant for the last few years, and that may just have been capital availability. … I think there's a breath of life coming into the industry.”

Be sure to catch new episodes of our podcast, “Small Biotechs, Big Decisions,” as they become available.