Pharmaceutical Industry M&A Activity Surges in First Half of 2025

NoahAI News ·
Pharmaceutical Industry M&A Activity Surges in First Half of 2025

The pharmaceutical industry witnessed a flurry of merger and acquisition (M&A) activity in the first half of 2025, with 32 deals recorded across the sector. Despite facing significant headwinds, including regulatory challenges and geopolitical uncertainties, companies demonstrated a renewed appetite for strategic transactions, particularly in the closing month of June.

Big Pharma Leads the Charge

Major pharmaceutical companies, including Eli Lilly, Sanofi, and Novartis, emerged as key players in the M&A landscape, each engaging in multiple transactions. Eli Lilly led the pack with three deals, while Sanofi and Novartis each completed two. The transactions ranged primarily between $1 billion and $5 billion, indicating a cautious yet strategic approach to dealmaking.

Notable deals included BioNTech's $1.25 billion acquisition of mRNA rival CureVac and Eli Lilly's $1.3 billion purchase of Verve Therapeutics, signaling a strong interest in gene editing technologies. These transactions not only reshaped competitive landscapes but also resolved long-standing rivalries, as exemplified by the BioNTech-CureVac deal, which is set to end ongoing patent litigation between the two German mRNA pioneers.

Regulatory Challenges and Market Dynamics

The surge in M&A activity came despite significant challenges faced by the industry. Political and regulatory factors, including upheaval at the FDA, concerns about drug approval delays, and the return of Most Favored Nation drug pricing policies, weighed heavily on dealmakers' confidence. PwC noted in its mid-year outlook that these shifts "have further complicated revenue forecasting and valuation modeling, leading many companies to more carefully reevaluate pipeline decisions and strategic objectives before signing new deals."

The threat of tariffs and ongoing discussions about onshoring U.S. manufacturing also influenced deal negotiations. Companies announced multibillion-dollar commitments to domestic production while continuing to tap into innovation from China, where more than one-third of molecules have been licensed by U.S. pharmaceutical firms.

Therapeutic Focus and Industry Trends

Oncology emerged as the clear winner in terms of therapeutic focus, with eight deals struck in this area during the first half of 2025, according to Truist Securities. This marks a shift from the previous year when deals were more evenly distributed across therapeutic areas.

The period also saw the resolution of several tumultuous industry stories. Private equity firms Carlyle and SK Capital acquired gene therapy pioneer bluebird bio for just under $50 million, marking a dramatic fall for a once-celebrated biotech company. Similarly, Sage Therapeutics, after rejecting an unsolicited offer from partner Biogen, agreed to be acquired by Supernus Pharmaceuticals for up to $795 million, in what analysts called a "good end" to the company's challenging journey.

Despite the increased activity, industry analysts remain cautiously optimistic about future prospects. PwC highlighted that while deal prospects are robust due to scientific progress and anticipated new drug approvals, companies must navigate a complex regulatory and geopolitical landscape. This environment demands "significant agility, comprehensive due diligence, and strategic foresight" in managing dealmaking activities and overall corporate strategies.

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