Pharmaceutical industry analysts said on Apr. 3 that a recent surge in mergers and acquisitions (M&A) may lead to record highs for deal activity in 2026, with companies such as Amgen, AbbVie, and Bristol Myers Squibb identified as likely participants.
The increase in M&A is seen as significant for the biopharma sector, which has experienced several high-value deals recently. These transactions are viewed by analysts as signs of renewed confidence among large pharmaceutical companies despite broader economic challenges.
Recent notable deals include Merck’s $6.7 billion acquisition of Terns Pharmaceuticals, Eli Lilly’s $6.3 billion purchase of Centessa Pharmaceuticals, and Biogen’s $5.6 billion buyout of Apellis Pharmaceuticals. According to BMO Capital Markets, these transactions helped push M&A spending to nearly $47 billion during the first quarter alone.
BMO Capital Markets wrote to clients that "there is more room to run" regarding ongoing M&A activity and described the current period as a "return of large scale deal making." The firm noted that these announcements have come even though there is a "more challenging macro" environment. Jefferies analysts agreed with this outlook, saying: “The biotech funding/deal environment is clearly improving in Q1:26, supporting the notion of normalcy.”
In addition to major acquisitions over $5 billion each, companies like Gilead, Novartis, and Servier have been active buyers at lower price points between $1–$3 billion. Analysts from Jefferies observed that if the pace continues for deals above $500 million, total deal volume could reach about $172 billion in 2026—surpassing last year’s total spend of $111 billion across 32 deals.
Premiums paid by acquiring firms have ranged from 38%–140%. For example, Biogen paid an 86% premium over Apellis’ average stock price for its acquisition but faced criticism from some investors over the high cost. Meanwhile, Merck's approach with Terns Pharmaceuticals was described by BMO as beneficial for Merck but potentially leaving additional value unclaimed by Terns shareholders.
Contingent value rights (CVRs), which provide additional payments if certain milestones are met post-acquisition, have become more common; three out of five recent deals included CVRs according to BMO Capital Markets. The largest potential CVR comes from Lilly's Centessa transaction with an extra possible payout tied to U.S. Food and Drug Administration approval.
Looking ahead, BMO named Amgen ($18.6 billion capacity), AbbVie ($33.6 billion), Bristol Myers Squibb ($21.9 billion), and Novartis ($53 billion) as companies well-positioned for further acquisitions this year—with Novartis showing particular interest after its recent purchase of Excellergy for $2 billion on March 27.
Analysts expect Oncology and Immunology & Inflammation (I&I) will remain popular therapeutic areas due to their size and alignment with existing pipelines: “Significant deal firepower remains...the most common therapeutic areas where we will see deals made will be Oncology and I&I—given the large opportunity sizes,” they wrote.
Jefferies analysts added: “In theory, more large M&A activity could allow investors to put more money to work driving secondary/IPO offerings higher.”
