In the life sciences industry, 2025 saw M&A investment hit $240 billion, an 81% increase from 2024. In 2026, average deal size has continued to rise, with activity showing little sign of slowing. 

The industry is being shaped by several factors: AI innovation, a search for the next growth wave, and derisking – all contributing to a broader focus on therapeutics, shifts from mega-mergers to targeted acquisitions, and more creative deal structuring.  

Though maybe the most prominent driver in M&A activity is the looming patent cliff – a wave of massive drug patents set to expire over the next few years – that’s jeopardizing billions in revenue. Life sciences companies are urging to offset these losses by acquiring multiple promising late-stage assets and shifting to building out therapeutic portfolios proactively. 

2026 M&A Deal Trends in Life Sciences

Our team has compiled key M&A deal trends in life sciences from the past year: 

Trend 1 – Replacing Revenue Lost from the Patent Cliff: Portfolio-Based Acquisitions 

From now to 2032, pharmaceutical firms are set to lose a total of around $370 billion as the patent cliff sets in. Companies facing revenue erosion by way of the inevitable patent cliff are turning to replace these blockbuster assets by acquiring multiple small and mid-sized companies with promising late-stage assets rather than one single acquisition.  

Later-stage candidates and marketed therapies can offer a clearer path to revenue than early-stage science. However, buyers continue to pursue earlier-stage assets when the strategic fit justifies the development risk. Merck and GSK illustrate how acquisitions can support portfolio planning ahead of patent expirations. 

[$6.7 billion] Merck & Co. acquires Terns Pharmaceuticals 

Earlier this year, Merck agreed to pay $6.7 billion to acquire Terns Pharmaceuticals and completed the transaction in May 2026. The acquisition adds TERN-701, an investigational therapy for chronic myeloid leukemia, to Merck’s oncology pipeline. 

The move comes as Merck prepares for the loss of exclusivity for Keytruda, its blockbuster cancer drug. It follows acquisitions of Cidara Therapeutics and Verona Pharma during the past year. Together, these transactions reflect Merck’s effort to build several sources of future revenue. 

[$10.6 billion] GSK acquires Nuvalent 

A significant portion of GSK’s profits come from ViiV Healthcare, a global leader in HIV treatments, from products built around dolutegravir – products that begin losing exclusivity in 2028 and 2030 as the patent cliff takes shape. GSK’s proactive response to this was to acquire Nuvalent, and in doing so, acquire two late-stage oncology assets, lung cancer therapies zidesamtinib and neladalkib, that they hope will replace the revenue hole in the loss of their blockbuster HIV patent-utilizing products. The acquisition illustrates how companies can build potential growth opportunities before established products lose exclusivity, while remaining dependent on clinical and commercial execution. 

Trend 2 – Bolt-On Acquisitions over Mega-Mergers 

Pharmaceutical companies are increasingly looking to bolt-on acquisitions to address specific portfolio gaps. A focused strategic fit can help buyers define integration priorities and pursue value sooner. These deals still carry integration risk, but their narrower scope may reduce the complexity associated with combining two large organizations. 

[$17.65 billion] Johnson & Johnson acquires Intra-Cellular Therapies and Halda Therapeutics 

In 2026, Johnson & Johnson is driving sustained growth with continuous investments in R&D and strategic bolt-on acquisitions, growing onto their acquisitions of Intra-Cellular Therapies and Halda Therapeutics in late 2025 – deals that began to show their impact this year. J&J targeted these acquisitions for their therapeutic-area focuses and to fill in portfolio gaps, with Intra-Cellular Therapies granting J&J a specific neuroscience franchise that serves as a strategic near- and long-term growth catalyst. The move to acquire these two emphasizes the bigger life sciences industry trend in pursuing bolt-on acquisitions for their pipeline synergies over a transformational merger with significant integration risk. 

[$1.9 billion] Chiesi acquires KalVista 

Narrowing in on a single rare-disease growth area in hereditary angioedema, Chiesi targeted KalVista for acquisition in a deal that went through in June 2026. Chiesi made the deal to acquire Ekterly, a new on-demand pill for the disorder that KalVista won approval of and that will strengthen Chiesi’s rare disease unit. KalVista recorded almost $50 million in sales last year, along with gaining recent approval for Ekterly – approval that follows the FDA clearing new injections last year alongside a growing interest among drugmakers in hereditary angioedema. This deal spotlights the wave in life sciences toward acquiring highly targeted therapeutic capabilities or therapeutic franchises over scale for scale’s sake. 

Trend 3 – Continued Investment in Focused Therapeutic Growth Areas 

Companies are continuing growth and investment in increasingly dominant areas like obesity- and metabolic-related diseases. Participating in activities of diversification allows these companies to reduce the risk of being too concentrated in one area and creates a wider set of opportunities in various other therapies. Major areas garnering industry interest include obesity and cardiometabolic disease due to the success of GLP-1 therapies, neuroscience, and rare diseases – all representing a high unmet need that companies are increasingly looking to fill. 

[$10 billion] Pfizer acquires Metsera 

Expanding on top of its existing oncology and inflammation portfolio, Pfizer pivots towards obesity and GLP-1 market exposure by acquiring Metsera, an investment in a new growth area beyond Pfizer’s traditional pharma focus. The transaction included an upfront enterprise value of approximately $7 billion, with additional payments contingent on specified milestones. 

Metsera brought a portfolio of clinical-stage candidates that complemented Pfizer’s internal medicine pipeline, including injectable and oral GLP-1 approaches. The acquisition illustrates the continued investment in obesity therapies, while its contingent payment structure links part of the consideration to future development outcomes. 

[$2.9 billion] Neurocrine Biosciences acquires Soleno Therapeutics 

Neurocrine completed its $2.9 billion acquisition of Soleno in May 2026. The deal adds VYKAT XR, an approved treatment for hyperphagia in people with Prader-Willi syndrome, strengthening Neurocrine’s endocrinology and rare disease portfolio. 

The acquisition expands Neurocrine’s commercial offerings through a therapy for a specific rare condition. It illustrates how companies can pursue growth in an adjacent therapeutic area that builds on their existing expertise. 

Trend 4 – Innovation Through Licensing and Partnerships 

AI is becoming an important tool for accelerating drug discovery and development. However, many AI-enabled platforms and early-stage assets carry significant scientific and commercial uncertainty. Instead of acquiring these companies outright, pharmaceutical companies are increasingly using licensing agreements, milestone-based partnerships, and regional commercialization agreements to gain access to innovation while limiting upfront risk. This reflects a broader shift in life sciences dealmaking where companies are placing greater value on securing access to innovation through flexible partnerships rather than relying solely on traditional acquisitions. 

[$1.2 to 18.5 billion] AstraZeneca partners with CSPC Pharmaceuticals 

AstraZeneca strengthens its weight management portfolio by means of a new transaction – a strategic partnership agreement with CSPC Pharmaceuticals to advance the development of multiple next-generation therapies for obesity as well as Type 2 diabetes. The deal is worth $1.2 billion upfront and creatively structured in a way that adds up to $17.3 billion more if certain milestones are met. Included in the contract is access to CSPC’s AI-powered drug discovery platform as well as several other therapeutic assets. The move spotlights cross-border innovation sourcing, AI-enabled discovery capabilities, and is a mirror of the M&A trend towards creative deal structures – an agreement that serves as a rights acquisition and collaboration rather than a full acquisition. 

[$115 million to 2.75 billion] Eli Lilly and Insilico Medicine enter licensing agreement 

Rather than a traditional acquisition, earlier this year Eli Lilly and Insilico Medicine entered a drug discovery collaboration where Insilico is set to receive $115 million up front with milestones that can bring the figure to $2.75 billion.  

The deal is an expansion of their existing partnership: Lilly seeking exclusive licensing rights to Insilico’s portfolio of AI-discovered therapies, AI drug discovery platform, and collaborative R&D programs. The AI will allow Lilly to identify more early-stage opportunities than traditional scouting. However, the risk and unpredictability of full acquisition of a potential opportunity so early-on in its lifecycle in Insilico prompted a creative hybrid deal structure instead that postpones the price with milestones – enabling Lilly to access innovation while distributing the risk of doing so. 

The Future of Life Sciences 

Looking ahead at M&A activity in the life sciences industry, experts predict the rest of 2026 will continue to bring a major acceleration in dealmaking. The year will proceed with activity being driven primarily by patent expirations – companies pursuing proactive action ahead of the expected loss of billions of dollars in sales from the patent cliff.  

Companies must prioritize portfolio planning before patent expirations; consider expansion of M&A strategy to include evaluation of licensing and partnership models, continue investment in therapeutic growth areas like cardiometabolic disease, and look to bolt-ons over transformational mergers. 

At Clarkston, our M&A team provides a range of services from optimizing post-merger integration to scouting future value acquisition targets – whichever your company needs.