Global biopharmaceutical M&A is on the rise, with the sector on track for its strongest year since its pre-pandemic peak seven years ago.
Driven by the looming patent cliff, a newly booming public market, and big pharma’s race to shore up its pipeline, deal value has reached $106 billion in 201 deals through 2026, according to PitchBook data.
If the current pace of biopharmaceutical M&A continues for the rest of this year, industry deal value could be on track to exceed $250 billion, potentially making it the strongest year for biotech and pharma since their peak in 2019.
Rajesh Kumar, head of life sciences and healthcare equity research at HSBC, told CNBC that he has seen drug companies “buying products as if they are really going to go out of fashion.”
After a post-pandemic trough in 2022 and a slow trend in 2024 when total deal volume declined to $114.8 billion, M&A surged to $209 billion in 2025. The momentum is accelerating towards 2026.
Kumar said deal momentum in the sector has been strong so far this year, despite a deteriorating interest rate environment due to inflationary pressures in recent months.
“Broadly speaking, the trading environment in the first half was slightly more favorable than it is now,” Kumar said.
Bolt-on trading trends
The majority of capital allocation is now focused on strategic acquisitions and corporate add-ons rather than leveraged buyouts, with drug discovery dominating deal flow, according to PitchBook data.
Nanna Lüneborg, general partner at life sciences venture capital firm Faubion, emphasized that pharmaceutical giants primarily target “bolt-on” acquisitions in the $1 billion to $5 billion range. GSK‘s recent $2.2 billion acquisition of RAPT Therapeutics is a prime example.
Lueneborg told CNBC that historically megamergers in the $10 billion to $20 billion range have been more difficult to pull off.
When these bolt-on acquisitions are in the $1 billion to $5 billion range, they tend to target a few specific products rather than an entire franchise, making them much easier to integrate into a company’s overall portfolio and lowering the bar for anti-competitive concerns, he added.
The average deal value so far in 2026 has jumped to $527.3 million from $365 million in 2025, according to PitchBook data.
Lueneborg said 2025 was one of the most active years on record, and 2026 will continue that breakneck pace in a variety of areas, including central nervous system (CNS) breakthroughs in oncology, metabolic diseases, Alzheimer’s disease and other areas.
“I don’t think pharmaceutical companies are panic buying,” she says, but adds that many pharmaceutical companies are focused on purchasing products that will be commercialized quickly, alongside investing in early-stage assets to access new technologies.
Patent Cliff and China
The ultimate driver remains the industry’s urgent need to replace revenue from loss of exclusivity for best-selling drugs. “Even when you hit the patent cliff, you still need to plug the profit and loss hole,” Kumar said.
However, disagreements are emerging and there appear to be clear company-specific power dynamics at play.
“If you are a very powerful company, e.g. lily“If things are going in your favor and growth is on the horizon, a lot of people want to partner with you,” Kumar said, “but if there is a big patent cliff and your fortunes could suffer in the next three to five years, you have to be the originator.”
The pursuit of innovation has often led Western pharmaceutical companies to expand into China. Despite changes to draft U.S. regulations restricting the use of Chinese clinical data, “interest in purchasing assets from China clearly remains unabated,” Kumar said.
Runeborg points out that Faubion is leveraging a “win-win” cross-border model.
“There are a number of Chinese biotech companies that are developing very attractive products and science, and many are pursuing the development of these assets in China for the Chinese market…but they do not have the capital or global infrastructure to pursue similar development elsewhere.”
This paved the way for the “NewCo” model, where companies acquire rights outside of China, establish a new company in Europe or the United States, and manage the assets through FDA and EMA approvals.
Public market sentiment has definitely improved over the past 12 months, with the biotech index XBI A 50% rally and several successful IPOs indicate that the biotech IPO window is effectively open.
“I think that will help bring more regular investors into biotech because there is a strong push to acquire products because of the patent cliff that pharmaceutical companies are facing,” Runeborg said.
