Dealmakers Predict Banner Year as Biopharma M&A Momentum Builds
By Allison Proffitt
January 23, 2025 | The mood at this year's J.P. Morgan Healthcare Conference signals a dramatic shift for biopharma dealmaking, with industry leaders projecting 2026 could eclipse last year's surging merger and acquisition activity.
Speaking at an Endpoints News panel discussion moderated by John Carroll, founder and editor of Endpoints News, senior executives from AbbVie, Amgen, and Merck expressed confidence that favorable market conditions and breakthrough science are converging to create what one panelist called "a renaissance moment" for the sector.
“The momentum is there,” said Roel van der Akker, a partner at PwC who sponsored the discussion. He noted that 2025 proved to be "a tale of two halves," with policy uncertainty weighing on deals early in the year before activity accelerated dramatically in the second half.
Big Deals Making a Comeback
The return of mega-mergers emerged as a key theme. Merck completed two acquisitions exceeding $10 billion each in less than six months during the second half of 2025—deals with Cidera for an influenza antiviral and Verona for a COPD treatment. Elizabeth Naldi-Jacob, Merck's head of transactions and corporate development, said the company remains open to deals of all sizes.
"We're going to look for the best science," Naldi-Jacob said. "We'll look at all price tags. We'll look at early. We'll look at late."
AbbVie's Nicholas Donoghoe, the company's chief business and strategy officer, struck a more cautious note on megamergers despite his company's $60 billion Allergan acquisition. He suggested the abundance of attractive individual assets makes smaller, more frequent deals the likely trend. AbbVie completed more than 20 deals in 2025 and a similar number the year before.
"There's so many attractive, innovative assets that you can go acquire individually," Donoghoe said. "I think that'll be the trend that continues versus mega mergers."
China's Growing Influence
The panelists highlighted China's emergence as both a source of innovation and a new operating model for drug development. Multiple speakers noted they had completed deals with Chinese biotech companies in recent weeks, praising the speed and cost efficiency of conducting clinical trials there.
"A third or more deals" involve Chinese partners, Donoghoe reported. AbbVie signed two deals with Chinese biotechs in the past two weeks alone, including one announced the morning of the panel discussion, he said.
Rachna Khosla, head of business development at Amgen, said China's biotech sector has evolved dramatically since her company's 2019 deal with BeiGene. Innovation has expanded beyond oncology small molecules into complex modalities and therapeutic areas including inflammation, rare diseases, and cardiometabolic conditions.
"The pace of innovation moved from basically nothing to me-too, to best-in-class opportunities," Khosla said.
Donoghoe argued China represents more than just a source of assets, calling it "a new way of operating and regionalizing our R&D" that could help companies "bring many more medicines forward faster, cheaper."
Creative Deal Structures on the Rise
Panelists expect to see more creative deal structures in 2026, particularly as competition intensifies for high-quality assets. Contingent value rights—payments tied to future milestones—are becoming more common as sellers show greater willingness to accept staged payouts.
"What is different in 2025 is that you're seeing more companies being comfortable with taking contingent value rights," Khosla said. "That has not been the case for a long while in our industry."
The competitive environment often drives innovation in deal terms, Donoghoe noted. "You're trying to differentiate in who you can be as a partner, but also the structure that you can offer," he said.
Curative Medicines Drive Interest
The emergence of potentially curative therapies is reshaping dealmaking priorities as well. The panel pointed to technologies like in situ CAR-T for autoimmune diseases, siRNA therapies, and neuroplastogens for psychiatric disorders as examples of treatments that could provide long-lasting benefits from limited doses.
"We're just at that moment where that type of science is breaking," Donoghoe said. "I think ‘26 is going to be a bigger year than ‘25."
Regulatory Outlook
The panelists largely dismissed concerns about regulatory headwinds from the Federal Trade Commission, predicting it would play a "neutral" role in 2026 dealmaking. The consensus marked a shift from anxieties that dominated conversations at previous J.P. Morgan Healthcare conferences.
Lower interest rates and a more favorable capital markets environment are also supporting deal activity, though the speakers cautioned that the return of biotech IPOs would be selective rather than a flood.
"Quality companies and good companies are starting to see an opening to go public," Khosla said. "What I don't see is the frenzy happening, where you're going to see all of a sudden the floodgates opening and every company is going to be able to go public."
Throughout the discussion, panelists emphasized that dealmaking ultimately aims to advance innovative medicines to patients faster—a goal they believe the converging trends of 2026 are positioned to achieve.