Forget about March going out like a lamb. March was a great month for M&A.
During the flurry of activity in the last 12 days of this month, biopharmaceutical companies completed seven deals worth more than $1 billion each, for a combined total of $29 billion. This blitz shows market watchers that 2026 will be a banner year for M&A, and that the surge seen in Q4 2025 was no false alarm.
“We believe biotech momentum will continue through 2026,” Jefferies analysts said in their quarterly M&A scorecard, noting that the turnaround came “despite macro uncertainty” and is consistent with the 64% rise in the U.S. biotech index, XBI, last year.
“We also like the broad demand from big pharma, which includes four deals over $5 billion (in the first quarter), as well as smaller tuck-ins of $1 billion to $2 billion,” Jeffries added. “Theoretically, larger M&A activity could allow investors to deploy more capital, driving up secondary/IPO prices.”
Acquisition of blockbuster products
Of the four deals of $5 billion or more in the first quarter, three were completed in recent turmoil. Merck spent $6.7 billion to acquire Terns Pharmaceuticals and its oral leukemia candidate TERN-701. Eli Lilly has offered Centessa Pharmaceuticals and its sleep disorder portfolio $6.3 billion upfront, plus $1.5 billion in potential contingent value rights (CVR) payments. On the same day, Biogen raised $5.6 billion for Apellis Pharmaceuticals and its pair of approved drugs, Chifobre and Empaveli.
Throughout the first quarter, Jefferies recorded 14 industry deals of at least $500 million (compared to 32 for all of 2025). At the current pace of such deals, the total value will reach $172 billion this year, compared to $111 billion in 2025.
M&A plans in late March also included Novartis signing a deal with Picavation Therapeutics for its portfolio of breast cancer assets worth $2 billion up front, plus $1 billion in potential milestones. Six days later, the Swiss drugmaker made another big-money acquisition, paying a total of $2 billion for Excellergy and its allergy candidate Exl-111.
Additionally, Gilead joined the fray with its $2.2 billion acquisition of Ouro Medicines and its autoimmune asset Gumgeltamig, while Otsuka completed a $1.2 billion acquisition of Transcend Therapeutics and its potential post-traumatic stress disorder treatment TSND-201.
The deal gyrations come on the heels of the late 2025 binge that signaled the M&A drought was finally nearing an end. Of the nine industry deals worth at least $5 billion in 2025, six were completed in the last four months of the year.
Mike Patrone, a partner at DLA Piper who specializes in biopharmaceutical M&A, said in an interview with Fierce that the market was heating up before last October’s government shutdown.
“I think December was one of the busiest months ever as the government reopened,” Patrone said. “The joke at the JPM Healthcare conference in January was that there were no big announcements because they were all thought through, worked out, and announced in December.”
Patrone said a combination of factors prompted the wave of M&A late last year. These include more capital available throughout the year and a less cooling IPO market.
“If an IPO happens, gets a good valuation, and then trades well, that bodes well for people who invest in publicly traded biotech and life sciences companies,” Patrone said. “When you look at acquisitions and M&A exits over $5 billion, that bodes well as well, because when you’re thinking about investing in an IPO, or when you’re thinking about venture investing in a pre-IPO company, it tells you what kind of exit valuation you’re thinking about. When you get into the investment side of things, the psychological side is very important.”
All of this means the biotech funding and trading environment is back to “normal,” Jefferies said in its first-quarter report.
Patrone said in recent months he has noticed “huge” competition for “real big products and attractive technologies and pipelines.” Similarly, Jefferies analysts said investors are still operating with a “more short-term horizon” and pursuing “higher-conviction catalysts.”
The driver for many deals is the upcoming loss of patent protection for blockbuster products. Merck, which now faces loss of Keytruda’s LOE by the end of the decade, has been one of the most active carriers and dealers, making three acquisitions for at least $6 billion each in the past 10 months.
Patrone also traced the recent surge in activity to the last time the IPO market was booming, five years ago.
“The last time the IPO market was this crowded, life sciences and biotech companies raised a lot of money in both the public and private sectors,” Patrone said. “It’s gratifying to put all these resources into developing pipelines and new technologies, coupled with great advances not only in the science itself, but also in the way companies bring drugs to market, to this point where we’re seeing great results, and we’re getting life-changing treatments and big deals more often than ever before.”
