Biopharma Dealmaking Landscape Evolves: What to Expect in 2026

The pharmaceutical industry is poised for significant changes in the coming years, with experts predicting a shift in dealmaking strategies and an increased focus on larger, lower-risk acquisitions. As the sector adapts to new regulatory challenges and emerging technologies, companies are reevaluating their approaches to mergers and acquisitions (M&A) and investment priorities.

Dealmaking Trends and Valuation Shifts

According to Arda Ural, EY Americas life sciences sector leader, the biopharma industry has experienced a period of uncertainty following the inauguration of President Donald Trump. However, as players have gained a better understanding of the impact of potential tariffs and drug pricing measures, valuations have become more predictable. This stabilization is expected to pave the way for a more active dealmaking landscape in 2026 and beyond.

The industry has witnessed a focus on larger, lower-risk acquisitions, a trend that is likely to continue in the coming years. This shift reflects a more cautious approach to M&A, with companies prioritizing deals that offer greater certainty and potential for immediate value creation.

Regulatory Scrutiny and Industry Response

The Federal Trade Commission (FTC) has increased its scrutiny of M&A transactions in the biopharma sector, prompting companies to adapt their strategies. This heightened regulatory oversight has led to more thorough due diligence processes and a focus on transactions that are less likely to face antitrust challenges.

Despite these regulatory hurdles, the industry has shown resilience, with 2025 seeing an uptick in both deal value and count after a year characterized by "conservatism and recovery," according to a report by Leerink Partners. This resurgence in M&A activity suggests that companies have found ways to navigate the regulatory landscape while still pursuing strategic growth opportunities.

Emerging Trends and Investment Priorities

As the biopharma industry looks toward 2026, several key trends are shaping investment priorities and dealmaking strategies:

1. Revitalized Therapeutic Areas: Companies are showing renewed interest in certain therapeutic areas, potentially driven by scientific breakthroughs or unmet medical needs. This focus may lead to increased M&A activity in specific disease categories.

2. Artificial Intelligence Investment: The integration of AI technologies in drug discovery, development, and manufacturing processes is becoming a major investment priority. Biopharma companies are likely to seek partnerships or acquisitions to bolster their AI capabilities.

3. China's Emergence as an Innovation Hub: The pharmaceutical industry is increasingly recognizing China's potential as a source of innovation. This trend may lead to more cross-border deals and collaborations with Chinese biotech firms.

As the biopharma industry continues to evolve, companies will need to balance their desire for growth with the realities of a changing regulatory environment and emerging technologies. The dealmaking landscape in 2026 is expected to reflect these complex dynamics, with a focus on strategic, value-driven transactions that can withstand regulatory scrutiny and deliver long-term benefits.