Each week we highlight five things affecting the life sciences industry. Here’s the latest.
UK biotech eyes renewed IPO activity after years-long drought
- Per Fierce Biotech, several British biotech firms are cautiously exploring initial public offerings after a prolonged drought, driven by improving market sentiment and renewed investor interest. Despite strong mergers and acquisitions activity and renewed confidence in the sector, overall equity financing fell sharply in 2025, though policy changes, fresh funding and optimism about 2026 suggest a recovering capital markets environment for U.K. biotechs.
- While funding levels remain concentrated in a small number of large rounds, policy support and expectations for stronger capital markets in 2026 are fueling cautious optimism across the sector.
Medtech M&A surged in late 2025 and is expected to continue
- M&A activity reached $80 billion through Nov. 30, 2025, driven by major deals, including “take-private” deals. According to Medtech Dive, experts expect this elevated dealmaking pace to continue into 2026, with early-year deals already validating that trend.
- Spinoffs and divestitures also accelerated, totaling $27 billion in 2025, with notable carveouts; however, the need for clear strategic rationale and careful cost/separation management in order to create shareholder value was emphasized.
IRA price negotiations rolled out for 15 more high-profile drugs
- The Centers for Medicare & Medicaid Services named 15 high-spend drugs for first-time Medicare price negotiations in 2026, including major products representing $27 billion in Medicare spending between November 2024 to October 2025.
- According to Fierce Pharma, the impact on the pharmaceutical industry is expected to be limited, with analysts noting that Medicare sales for nearly all selected drugs represent 0 to 3% of projected 2027 revenues, while Inflation Reduction Act (IRA)-enabled negotiations continue amid ongoing legal challenges and broader administration efforts to reshape drug pricing.
Four key trends reshaping strategic M&A in biopharma
- Pharma’s M&A strategy is undergoing a structural shift, with companies prioritizing platform acquisitions, manufacturing control and capability buildouts across the value chain rather than pursuing single blockbuster assets, according to the Bain & Company Global M&A Report 2026.
- Strategy is shifting from chasing single blockbuster assets to securing platforms and vertical integration, with Bain highlighting four major drivers of 2026 M&A: the next-gen obesity drug race, surging antibody-drug conjugates activity, China’s expanding pipeline, and pharma’s push to own more of the development and manufacturing value.
Biopharma sentiment improves heading into 2026
- According to Endpoints News, sentiment has improved with the Biopharma Sentiment Index rising from 78 to 90 as all 10 core indicators improved, driven primarily by stronger dealmaking, better fundraising conditions, and narrowing gaps between current conditions and future expectations, suggesting a more durable recovery phase.
- Despite broad optimism, major risks persist, however, including regulatory instability, geopolitical tensions (particularly between U.S. and China), and political uncertainty with respect to regulation, tariffs and drug pricing. Scientists and early-stage innovators remain more cautious and many industry participants still prefer investing in the S&P 500 or tech over biopharma itself.
For more insights in life sciences, check out RSM’s industry outlook.
