Biotech IPOs reopen, but Big Pharma M&A still leads
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- JPMorgan EMEA healthcare co-heads Juha Anjala and Roy Wouters told CNBC the IPO window has reopened for high-quality biotech companies, but investors are far more selective than during the pandemic-era boom, and capital is concentrating on category leaders.
- Many biotech companies are now pursuing dual-track processes — preparing for IPOs while simultaneously engaging potential acquirers — and in some cases get bought by large pharmaceutical groups before ever reaching the public markets.
- Big Pharma buyers are under pressure to top up pipelines ahead of major patent expirations later this decade and into the early 2030s, with strategic buyers "out there looking to deploy capital" and shareholders increasingly pushing management to pursue more M&A.
- Biopharma deal volume is on track to surpass 2025: there were seven deals valued between $5 billion and $15 billion last year, and nearly halfway through 2026 there are already six such transactions, per JPMorgan.
- GSK agreed to buy US oncology biotech Nuvalent for $10.6 billion, a marked departure from GSK's typical low single-digit billion-dollar bolt-on acquisition strategy and a signal of how far buyers will stretch for priority assets.
- EY reported 38% of 2025 new drug approvals were first-in-class products, and said Chinese biotech companies now represent a genuine alternative to US and European hubs, with innovation and capital flows accelerating.
- Deal upfronts are getting larger as competitive bidding forces buyers to "put more capital at risk," according to Wouters, with the most competitive market for differentiated assets in oncology, metabolic disease, and infectious disease.
Why it matters: Biotech founders with differentiated assets in oncology, metabolic, and infectious disease now have a stronger — but more bifurcated — exit market: six biopharma deals in the $5-15B range have already closed in 2026 versus seven for all of 2025, and upfront payments are rising. The trade-off is that capital is concentrating, so only 'best in class, first in class' companies attract strategic buyers willing to stretch beyond their usual bolt-on size.
