Chart to Watch: Biopharma dealmaking gains momentum
After a notable pickup toward the end of last year, biopharma M&A and IPO activity have accelerated in 2026. Portfolio Manager Andy Acker discusses how the increase in deal activity mirrors the pace of innovation taking place across biotechnology and its potential implications for the broader healthcare sector.
Source: Bloomberg, as of 30 June 2026. Represents global M&A transactions where the target industry is classified as Biotech & Pharma.
What excites us most isn't necessarily the increase in deal activity, but what it says about innovation across the biotech landscape. We continue to see a broad wave of scientific advances taking shape in areas such as oncology, immunology, rare diseases, and other fields with significant unmet medical need. The pickup in M&A and capital markets activity suggests strategic acquirers and investors increasingly recognize the value of these innovations and their potential to improve patient outcomes.
Key takeaways
- Despite a higher interest-rate backdrop than many expected at the start of the year, the momentum we saw building in biotech deal activity has continued unabated, with both the dollar value and breadth of transactions inflecting higher during the first half of 2026.
- The continued pace of acquisitions highlights biotechnology's important role in driving healthcare innovation. Notably, many deals have targeted small- and mid-cap biotech companies advancing promising clinical programs, an area where we continue to find attractive investment opportunities. With large pharmaceuticals under pressure to replace hundreds of billions of dollars in drug revenues that will lose patent protection in the coming years, we believe demand for differentiated biotech assets should remain strong.
- Beyond M&A, biotech initial public offering (IPO) activity has rebounded, including two of the largest biotech IPOs on record during the second quarter. A healthier funding environment can benefit the broader biopharmaceutical ecosystem, helping support the discovery and development of future medicines while creating opportunities for companies providing the tools and services that enable innovation.
IMPORTANT INFORMATION
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Health care industries are subject to government regulation and reimbursement rates, as well as government approval of products and services, which could have a significant effect on price and availability, and can be significantly affected by rapid obsolescence and patent expirations.
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- Shares/Units can lose value rapidly, and typically involve higher risks than bonds or money market instruments. The value of your investment may fall as a result.
- Shares of small and mid-size companies can be more volatile than shares of larger companies, and at times it may be difficult to value or to sell shares at desired times and prices, increasing the risk of losses.
- If a Fund has a high exposure to a particular country or geographical region it carries a higher level of risk than a Fund which is more broadly diversified.
- The Fund is focused towards particular industries or investment themes and may be heavily impacted by factors such as changes in government regulation, increased price competition, technological advancements and other adverse events.
- The Fund may use derivatives to help achieve its investment objective. This can result in leverage (higher levels of debt), which can magnify an investment outcome. Gains or losses to the Fund may therefore be greater than the cost of the derivative. Derivatives also introduce other risks, in particular, that a derivative counterparty may not meet its contractual obligations.
- If the Fund holds assets in currencies other than the base currency of the Fund, or you invest in a share/unit class of a different currency to the Fund (unless hedged, i.e. mitigated by taking an offsetting position in a related security), the value of your investment may be impacted by changes in exchange rates.
- When the Fund, or a share/unit class, seeks to mitigate exchange rate movements of a currency relative to the base currency (hedge), the hedging strategy itself may positively or negatively impact the value of the Fund due to differences in short-term interest rates between the currencies.
- Securities within the Fund could become hard to value or to sell at a desired time and price, especially in extreme market conditions when asset prices may be falling, increasing the risk of investment losses.
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