Forget March going out like a lamb. On the M&A landscape, March went out like a lion.
In a flurry of activity over the last 12 days of the month, biopharma companies pulled off seven transactions each for more than $1 billion and worth a combined $29 billion in headline value. The blitz indicates to market watchers that 2026 will be a prime year for M&A and that the surge seen in the fourth quarter of 2025 was not a false alarm.
“We think biotech momentum can continue throughout 2026,” analysts at Jefferies wrote in their quarterly M&A scorecard, noting that the upswing comes “despite macro uncertainty” and coincides with a 64% increase in the XBI, a stock index for U.S. biotech companies, over the last year.
“We also like the breadth of Big Pharma’s appetite, which includes four $5 billion-plus deals (in the first quarter), as well as smaller $1 billion to $2 billion tuck-ins,” Jefferies added. “In theory, more large M&A activity could allow investors to put more money to work, driving secondary/IPO offerings higher.”
Blockbuster buyouts
Of the four $5 billion-plus deals in Q1, three came in the recent spree. Merck put up $6.7 billion to acquire Terns Pharmaceuticals and its oral leukemia candidate, TERN-701. Eli Lilly offered $6.3 billion up front, plus $1.5 billion in potential contingent value right (CVR) payments, for Centessa Pharmaceuticals and its portfolio of sleep disorder treatments. On the same day, Biogen ponied up $5.6 billion for Apellis Pharmaceuticals and its pair of approved drugs Syfovre and Empaveli.
In the first quarter overall, Jefferies tracked 14 deals in the industry of at least $500 million, compared to 32 in all of 2025. At the current pace of such deals, the overall value would reach $172 billion this year compared to $111 billion in 2025.
Also joining the late-March M&A run was Novartis with a deal worth $2 billion upfront, plus $1 billion in potential milestones, for Pikavation Therapeutics and its portfolio of breast cancer assets. Six days later, the Swiss pharma struck another big-money buyout, paying a headline value of $2 billion for Excellergy and its allergy candidate Exl-111.
Additionally, Gilead joined the spree with a $2.2 billion acquisition of Ouro Medicines and its autoimmune asset gamgertamig, while Otsuka pulled off a $1.2 billion buyout of Transcend Therapeutics and its potential post-traumatic stress disorder treatment TSND-201.
The wild run of transactions comes on the heels of a binge in late 2025, which indicated that the M&A drought was finally coming to an end. Of the industry’s nine deals worth at least $5 billion in 2025, six came in the last four months of the year.
Mike Patrone, a Partner with DLA Piper who specializes in biopharma M&A, said in an interview with Fierce that the market was heating up last year before the government shutdown in October.
“The government reopened and then December was one of the busiest months I think I’ve ever had,” Patrone said. “The joke was at JPM Healthcare Conference in January was that there weren’t big announcements because they had all been pulled through and hammered out and announced in December.”
A confluence of factors helped facilitate the wave of M&A late last year, according to Patrone. They included the increased availability of capital throughout the year and the unchilling of the IPO markets.
“When you see an IPO and a high valuation and then it trades well, that bodes well for people that invest in public biotech life sciences companies,” Patrone said. “When you see the $5 billion-plus acquisitions, the M&A exits, that bodes well also because when you’re thinking about investing in the IPO or when you’re thinking about making your venture investment in the pre-IPO companies, it gives you an idea of what type of exit valuations you could be thinking about. The psychology aspect is very big when you get into the investing side of things.”
It all adds up to the biotech funding and deal environment returning to “normalcy,” Jefferies said in its Q1 report.
Over the last several months, Patrone said he’s noticed “immense” competition for “the real big products and compelling technologies and pipelines.” Similarly, Jefferies analysts said that investors are still operating with a “shorter-term horizon,” pursuing “higher-conviction catalysts.”
Driving many of the deals is the oncoming loss of patent protection for blockbuster products. Merck, which faces the loss of exclusivity (LOE) for Keytruda by the end of this decade, has been one of the most active wheelers and dealers, executing three acquisitions over the last 10 months, each for at least $6 billion.
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 markets were this busy, life sciences companies and biotech took in a ton of money both in the public space and the private space,” Patrone said. “Putting all those resources to developing their pipelines, novel technologies, coupled with great advances in—not just the science itself but how companies can bring drug to market—it’s nice to see that this point later we’re getting those fantastic readouts, we’re getting these life-changing therapies at a more frequent rate than we had been and getting the big mega-deals."