Biotech M&A hits $106 billion, on track for best year since pre-Covid
Global biopharma mergers and acquisitions are on a sharp rise, putting the industry on course for its strongest year since the pre-pandemic peak seven years ago.
Deals so far in 2026 have reached $106 billion across 201 deals, according to PitchBook data, driven by looming patent cliffs, newly revitalized public markets and Big Pharma’s race to strengthen their pipelines.
If the current pace of biopharma mergers and acquisitions continues through the rest of the year, the industry could be on track to reach deal value of over $250 billion, marking the strongest year for biotech and pharma since the 2019 peak.
We’ve seen pharmaceutical companies “buy products like they’re literally going out of fashion,” Rajesh Kumar, Head of Equity Research at HSBC Life Sciences and Healthcare, told CNBC.
After a post-pandemic trough in 2022 and a softer 2024 in which total deal value fell to $114.8 billion, mergers and acquisitions rose to $209 billion in 2025. This momentum accelerated in 2026.
Kumar said deal-making momentum in the sector has been strong so far this year, despite the worsening interest rate environment following inflationary pressures in recent months.
“Generally speaking, the deal-making environment in the first half was a little more conducive than it is now,” Kumar said.
Bolt-on deal trend
The vast majority of capital allocation is currently concentrated on strategic buyouts and corporate add-ons rather than leveraged buyouts, with drug discovery dominating the deal flow, according to PitchBook data.
Nanna Lüneborg, general partner of life sciences venture capital company Forbion, emphasized that pharmaceutical giants are primarily targeting “bolt” acquisitions in the range of $1 billion to $5 billion. GSK‘s last $2.2 billion acquisition RAPT Therapeutics is a prime example.
Lüneborg told CNBC that historically mega-mergers in the $10 billion to $20 billion range have been harder to achieve.
He added that when these impulse buys are in the $1 billion to $5 billion range, they tend to be for a few specific products rather than an entire franchise, making them significantly easier to integrate into companies’ overall portfolios and with fewer hurdles related to anticompetitive concerns.
The average deal value so far in 2026 has risen sharply to $527.3 million, up from $365 million in 2025, according to PitchBook data.
Lüneborg said that while 2025 was one of the most active years on record, 2026 continues this torrid pace in a variety of methods, including central nervous system (CNS) breakthroughs in areas such as oncology, metabolic diseases and Alzheimer’s.
“I don’t think pharma is panic buying,” he said, but added that many are focused on buying products that will soon be commercialized, as well as investing in early-stage assets to gain access to new technologies.
Patent cliffs and China
The final catalyst remains the industry’s pressing need to recoup revenue from loss of exclusivity for best-selling drugs. “When patent cliffs hit you still have to fill the gap in your P&L,” Kumar said.
However, there seems to be a difference and a clear company-specific dynamic.
“When you’re a very strong company, Lily“In a situation where things are going in your favor and growth is coming, a lot of people want to partner with you,” Kumar said. “But if you have a huge patent gap and it looks like you’re going to be out of luck in the next three to five years, then you have to be the creator.”
The search for innovation has often led Western pharmaceutical companies to China. Even though draft U.S. regulations limiting the use of Chinese clinical data have changed, “interest in buying assets from China has clearly not waned,” Kumar said.
Luneborg notes that Forbion benefits from a “win-win” cross-border model.
“There are a lot of Chinese biotech companies that are developing very impressive products, very interesting science, and many of them are looking to develop these assets in China for the Chinese market… but they don’t have the capital or the global infrastructure to pursue similar development elsewhere.”
This has paved the way for a “NewCo” model in which firms obtain ex-China rights to establish new companies in Europe or the US to channel assets through FDA and EMA approvals.
Public market sentiment has undeniably improved over the last 12 months, driven by the biotechnology index xbi A 50% increase and multiple successful IPOs show that the IPO window is effectively open for biotech.
“The pharmaceutical industry has very strong momentum in acquiring products because of the patent cliff they face, then I think that helps attract more mainstream investors into biotech,” Luneborg said.
