As we entered 2025, we were hopeful for a more upbeat year for pharma M&A activity but, with headwinds still swirling, a dramatic change of pace seemed unlikely. Indeed, with further uncertainty for the sector in what was already a disrupted business environment, 2025 so far provides a mixed tale. On the one hand, deal volume has remained at a similar pace to 2024 but, in more promising signs, total deal value in the sector is on the rise and we are seeing more higher value deals.
In this article, we look at some of the trends and themes in M&A activity in 2025 so far and provide our outlook on the final months of the year and beyond.
Deal landscape
We have seen many trends from 2024 continue into 2025. 2024 was dominated by deals between $1-2bn and deals around this range continue to flow. However, and in contrast with 2024 (which, with the exception of Novo/Catalent, registered no deals over the $5bn mark), 2025 has already seen the return of larger deals including Johnson & Johnson's $14.6bn acquisition of neuro-focused, Intra-Cellular Therapies, Sanofi's acquisition of Blueprint Medicines for up to $9.5bn (expanding its portfolio in rare immunological disease and adding early-stage pipeline in immunology) and Merck's $10bn deal to acquire respiratory-focused Verona Pharma.
Mirroring another trend from last year, deal activity continues to be predominantly driven by strategics who continue to look to M&A, as well as licensing, to replenish pipelines and achieve revenue growth. In terms of the type of deals, there have been two key areas of focus for these strategic acquirers. The first is early-stage assets, with potential first or best in class candidates, such as AbbVie's $2.1bn acquisition of Capstan (with a potential first in class in vivo CAR-T therapy) and Novartis' $1.7bn acquisition of Regulus Therapeutics (adding a potential first-in-class, renal disease candidate).
Another area of focus for these buyers comes from the other end of the spectrum, with 2025 showing big pharma's willingness to pay out for commercial assets, including the aforementioned J&J / Intra-Cellular, Sanofi / Blueprint and Merck / Verona acquisitions.
In terms of therapeutic areas, oncology and immunology have once again dominated deal activity, with platform assets also continuing to gather interest. Similar to 2024, obesity assets continue to be a key trend in licensing deals but remain quieter on the M&A front in terms of volume but Pfizer's recently announced proposed acquisition of Metsera ($4.9bn upfront) demonstrates there is still appetite for deal making in this space.
Whilst private equity (PE) has remained relatively subdued, it has not been without pockets of activity and some larger deals have provided glimmers of hope, including:
- CapVest's €10bn investment for a majority stake in German pharma company, Stada;
- GTCR's recently announced acquisition of European generics company, Zentiva; and
- KKR's $1.2bn acquisition of Swedish life sciences company, Biotage.
Other PE investment trends have leant towards other areas in the broader life sciences spectrum, including consumer healthcare (DBAY Advisors' £362m take private of consumer healthcare and pharma company, Alliance Pharma, and CD&R's acquisition of a 50% controlling stake in Opella which completed this year having been announced in 2024) as well as pharma services companies as seen in Blackstone's acquisition of a majority stake in Japanese CRO, CMIC, and Bain Capital and Kohlberg's investment (and Mubadala's reinvestment) in CDMO, PCI Pharma.
Outlook
Looking ahead to the final months of 2025 and into 2026, it is hoped that the upward momentum in overall deal value and incidence of larger deals continues. However, we would not be surprised if overall deal volumes at the end of 2025 remain consistent with recent years (rather than activity levels taking a significant upward turn). Strategics are expected to continue to be the key driver of activity; but, if the return of some more sizeable PE led deals signals renewed confidence for investment in the sector, then 2026 could see a shift change in deal making momentum.
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