Biopharma M&A accelerated in the first quarter, driven by patent expirations and large acquisitions.
Key takeaways
Deal sizes surged in March and early April, signaling stronger confidence from strategic buyers.
IPO and private capital fundraising rebounded, highlighted by record-setting life sciences funds.
If the first quarter is any indication, dealmaking and capital formation in the biopharma sector are gaining momentum.
After a strong year for mergers and acquisitions, many investors and executives entered the new year cautiously optimistic about whether the trend would continue. Early data suggests it is: M&A volume and value accelerated in the first quarter, and fundraising strengthened across both public and private markets, setting a constructive tone for the remainder of this year.
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M&A momentum
Amid a major patent cliff—as exclusivity on blockbuster products expires—big pharma is looking to bolster pipelines, largely through M&A. In the first quarter, the sector saw 125 deals announced with an estimated aggregate value of $53.8 billion (about $1.2 billion per deal on average).
March was the clear high-water mark, with $26.7 billion announced; notably, 85% of that month’s deals were announced in the final 12 days of the month, with an average deal size of roughly $2.1 billion.
Momentum carried into early April as well, with seven deals announced in just the first seven days of the month, with an average deal size of $2.3 billion.
Fundraising on the rise
Fundraising in the biopharma sector also gained steam across the fourth quarter and first quarter. After capital markets began to thaw late in the third quarter, highlighted by three successful initial public offerings in September, October and November, momentum carried into the first quarter, with five additional IPOs priced at more than $150 million in deal value.
Activity has picked up in private markets as well, led by increased venture capital and private equity investment. Notably, in the final days of March, a major private equity firm reported its latest life sciences fund was oversubscribed and closed at $6.3 billion in commitments, marking the largest life sciences fund ever raised.
The takeaway
The pickup in M&A and fundraising activity at the end of the first quarter signals a thawing deal environment that could translate into a more active year ahead for biopharma.
As interest from both strategic and financial buyers increases, companies may benefit from stepping back to evaluate their readiness, whether that means sharpening the narrative around clinical progress, stress-testing funding pathways or ensuring infrastructure can support scale. At the same time, acquirers are likely to stay selective as they navigate patent pressures, valuation expectations and regulatory complexity.
While uncertainty remains, early momentum suggests that companies best positioned to act will be those that have done the groundwork before the window fully opens.
RSM contributors
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Katherine PowersLife Sciences Senior Analyst
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