The biopharmaceutical industry is expected to see a rise in mergers and acquisitions (M&A) in 2026 and 2027, as companies face upcoming patent expirations and changing market conditions. This outlook follows a competitive bidding process between Pfizer and Novo Nordisk for the obesity biotech Metsera, which many experts say marks a renewed confidence among large pharmaceutical firms to make significant investments.
“We’re just seeing the start of a big M&A season coming, 2026, 2027,” said Coya Therapeutics CEO Arun Swaminathan in an interview with BioSpace. “If I had a crystal ball, I see big M&As coming through.”
Industry observers note that current market signals differ from previous years' predictions. Recent interest rate cuts by the Federal Reserve have lowered borrowing costs, while looming patent cliffs are pressuring companies to secure new revenue streams. Kevin Eisenfrats, CEO of Contraline, commented: “Metsera signaled a return of big-pharma confidence in writing meaningful checks again. That enthusiasm should persist into 2026 for a simple macro reason: Pharma’s revenue cliffs haven’t gone anywhere and internal R&D productivity still lags.”
Michael Allwin, head of biopharma investment banking at Truist Securities, described this as “one of the strongest M&A environments in years.” Companies are seeking later-stage clinical assets but face shortages, pushing them to consider earlier-stage biotechs. Greg Graves of McKinsey noted that there are currently only about 17 late-stage assets worth roughly $1 billion available on the market—a number that continues to decrease as deals close.
“The amount of substrate, especially if you need revenue in the near term, is fairly low,” Graves said. “More than half the deals are early-stage deals. At this point in time, I think that’s going to continue.”
Swaminathan emphasized that buyers will likely pay premiums for clinical stage assets: “I do think that there’s going to be a premium on clinical stage assets and companies, because then it’s been derisked,” he said. He added that all such acquisitions involve risk: “At the end of it all, M&A is an educated bet.”
Graves also pointed out that artificial intelligence could influence future acquisitions—not only by making targets more attractive but by helping acquiring firms integrate new operations more efficiently.
“If you have gotten the efficiencies out of AI, particularly on the back office and commercial side, does that actually make you a better acquirer?” Graves asked.
Philip Poulidis, CEO of ODAIA—which offers AI solutions for life sciences—explained how technology helps smaller biotechs demonstrate greater commercial discipline: “Buyers want more than compelling assets—they want evidence of commercial discipline. What’s new is that AI now gives emerging companies the ability to operate with the commercial rigor of much larger organizations,” he wrote via email.
In terms of spending capacity among large pharmaceutical companies like Merck and Bristol Myers Squibb—both facing key patent expirations—Allwin estimated about $300 billion in near-term at-risk revenues and around $500 billion available on balance sheets for potential transactions. A Stifel analysis put pharma's total "firepower" at $1.2 trillion as of October 2025.
Smaller-scale deals have become common as firms seek portfolio diversification rather than pursuing single large acquisitions. Swaminathan observed: “Pharma is getting good at doing multiple small acquisitions to diversify their portfolio, as opposed to just taking out one big company.” Allwin expects most activity will focus on transactions valued between $5 billion and $10 billion.
Mid-cap companies are also active participants; Regeneron, Vertex Pharma, Biogen, Moderna and Jazz Pharmaceuticals have been cited by Leerink Partners as potential buyers in upcoming deals.
Obesity-related treatments remain highly sought after due to broad patient populations unlocked by GLP-1 drugs from Novo Nordisk and Eli Lilly—the prices for which have recently dropped significantly per month amid increased competition. As these therapies become more affordable (https://www.biospace.com/article/as-glp-1s-hit-bargain-bin-prices-what-s-the-future-of-the-obesity-market-/), pharma firms may target sub-populations or pursue treatments with fewer side effects such as muscle mass loss.
Swaminathan believes metabolic diseases will continue drawing attention alongside neuroscience—a field offering high risks but potentially substantial rewards—and noted oncology has grown more fragmented with fewer blockbuster opportunities remaining.
Graves argued that enthusiasm around obesity drugs has shifted focus away from oncology toward larger population diseases like cardiovascular or renal disorders—a trend enabled by recent advances (https://www.biospace.com/article/q3-saw-some-of-the-highest-value-biopharma-acquisitions-of-the-year-so-far/).
With lower interest rates encouraging investment over cash reserves moving into next year’s dealmaking cycle,“I’m not an economist," Swaminathan concluded,"but I would say if you’re sitting on billions of dollars of cash… The best place to leave it is in some investments."
