Biopharma bounces back as M&A impetus fuels recovery

The biopharmaceutical industry is experiencing a strong recovery, with US deal values in the first quarter of 2026 exceeding $65 billion, marking the strongest quarter since 2020. Pharmaceutical companies are focusing on new modalities including GLP-1 receptor agonists, RNA therapeutics, and antibody-drug conjugates. The main driver of this growth is the patent cliff – a massive loss of patent protection, with the share of global drug sales under patent protection expected to decline from 12 percent in 2022 to only 4 percent in 2030. Pharmaceutical companies are forced to either accelerate in-house research or acquire new drugs through acquisitions. Eli Lilly exemplifies this strategy, having acquired 10 companies in 2026, including the $7.8 billion purchase of biotech company Centessa. The two largest deals in the second quarter were Sun Pharma's $11.75 billion takeover of Organon and GSK's $10.6 billion acquisition of cancer specialist Nuvalent.