With pharma and life sciences deal values surpassing $65 billion in Q1, marking the strongest quarter in the industry since 2020, analysts from PwC have declared that the “biopharma ecosystem is back to full health.”
In all, there were 16 M&A transactions announced in the first quarter of this year, with the spate of deal activity focused largely on “differentiated science, GLP-1 expansion, and next-gen modalities including RNA, ADCs and gene editing,” PwC’s team wrote.
It all adds up to booming business in the sector, a take that is widely shared these days from market observers. Last week, in their annual Biotech Beyond Borders report, analysts from Ernst & Young came to a similar conclusion in projecting that biotech revenues would be up by at least 12% in 2026. Again, the primary reason for their optimism is the effervescence of the M&A market.
And, going beyond PwC and EY’s analyses, which were limited to the first three months of the year, there has been no indication of a retreat in the second quarter as the period has included the two largest biopharma deals of 2026 so far—Sun Pharma’s $11.75 acquisition of Organon in April and GSK’s $10.6 billion buyout of Nuvalent last week.
“Strategic dealmaking urgency has intensified,” PwC wrote in its new report, Pharmaceutical and life sciences: U.S. Deals 2026 midyear outlook.
The report continues, “After sitting out the first half of the decade and only making smaller deals, large pharmaceutical players are digging into their deep pockets to offset the estimated $300 billion of branded pharma revenue exposed to loss of exclusivity this decade. Nearly every major player in the sector has announced at least one $1 billion biopharma deal in the last 12 months, with several completing multiple transactions.”
PwC pointed out that the surge in dealmaking has come in the face of headwinds for the industry, including tariffs, the Biden-era Inflation Reduction Act (IRA) and Most Favored Nations (MFN) pricing under President Donald Trump, as well as trade policy uncertainties between the U.S. and China.
While these factors aren’t hindering the value and pace of M&A, they are shaping deals to some degree as buyers are “relying more heavily on contingent value rights, milestone-based structures and assets with near-term clinical or commercial inflection points rather than long-duration platform bets,” PwC wrote.
As for the next six months, PwC points to two forces that will heavily influence dealmaking: Greater urgency from pharma and tighter exits for biotech. Large pharma companies are still in “portfolio-replenishment mode,” the analysts wrote.
Meanwhile, as the biotech IPO window begins to re-open, valuations are becoming increasingly favorable and investor confidence is rebounding. These trends are leading more biotechs to move deeper into clinical trials, driving higher deal values for assets that are more de-risked. As a result, PwC is projecting higher deal volumes and values in that category, too.
“Biopharma M&A has entered a new phase driven less by scale and more by precision science,” Roel van den Akker, PwC’s U.S. pharmaceutical & life sciences deals leader, observed. “We expect M&A to remain strong through year-end as large caps close LOE gaps with high-conviction science across cardiometabolic, CNS, immunology and oncology,” he commented in the report.
In summary, PwC is reminding executives that capital and appetite are “abundant,” and that the resources in scarcity right now are differentiated assets with near-term commercial potential in the right therapeutic areas.
“Dealmakers that explicitly underwrite policy risk, embrace milestone-weighted deal structures and bring AI-enabled insights to the table will be best positioned to lead this market,” PwC wrote.
