Pharma M&A is back - H1 2026 Update

Having entered yet another year with renewed optimism, the first half of 2026 did not fail to deliver. Deal volume and overall value are both going strong and, if this momentum continues, 2026 is on track to be one of the best for deal activity the sector for a number of years.

In this blog, we look at some of the trends seen in H1 2026’s pharma M&A activity and provide our outlook for the remainder of the year.

Trends in H1 2026 pharma M&A activity

• Larger deals are on the table: The welcome return of more sizeable deals in 2025 continued into the first half of 2026 and, by the end of June, ten $5 billion+ deals were inked with four over the $10 billion mark:
  • Sun Pharma’s announced acquisition of leading women’s health company, Organon ($11.75 billion);
  • Merck KgA’s announced acquisition of life sciences tool / research company, Bio-Techne ($11.3 billion);
  • AbbVie’s announced acquisition of Apogee Therapeutics adding a diverse dermatologic, respiratory and other related inflammatory and immunological diseases pipeline ($10.9 billion); and
  • GSK’s acquisition of oncology-focused Nuvalent ($10.6 billion).
• Oncology remains dominant: Oncology continues to command significant attention, being the target of a majority of larger deals. As well as GSK/Nuvalent, this included:
  • Eli Lilly’s acquisition of Kelonia for up to $7 billion (In vivo CAR-T);
  • Gilead’s acquisitions of:
    • Arcellx for $7.8bn (CAR-T cell therapy); and
    • Tubulis for up to $5bn (ADCs); and
  • Merck’s $6.7 billion acquisition of Terns with its lead asset targeting chronic myeloid leukaemia.

Beyond oncology, immunology, neurology and rare diseases were also key drivers of deal making activity and modality trends saw CAR-T (particularly in vivo) and T-cell engagers remaining popular targets.

• Earlier stage deals continued to flow: Whilst licensing deals continued to be generally favoured for preclinical assets, M&A did flow steadily for Phase 1 / 2 pipelines. Whilst the majority of these remained in the $1-2bn range, as the Eli Lilly / Kelonia transaction demonstrates (with up to $7 billion on the line for a Phase 1 asset), big pharma is willing to spend big for the right earlier stage assets.
• Strategics stay dominant: Similar to 2025, strategics remain the primary driver of M&A activity with innovators sharply focused on replenishing pipelines whilst generics players are still turning to M&A to achieve their ambitions of moving up the value chain (increasing their innovation presence) and geographical expansion. Meanwhile, PE’s return to the table continued with not insubstantial activity across the broader pharma spectrum with H1 2026 activity highlights including:
  • the launch by CVC Capital Partners and Groupe Bruxelles Lambert of a €10.7 billion cash tender offer to acquire Italian pharmaceutical company Recordati;
  • Lone Star Funds' acquisition of Capsules & Health Ingredients division of Swiss CDMO, Lonza for $2.2bn upfront and a 40% retained equity stake for Lonza;
  • THL Partners’ majority investment in Celerion Inc – a US based clinical research services provider for $1.8bn;
  • Astorg’s acquisition of the global microbiology business of Thermo Fisher Scientific for $1.075bn.

Outlook

With noises in the US surrounding potential curbs to China licensing deals - see our article on this topic, here, it will be interesting to see the impact (if any) this has on deal making activity, Of course, whether such restrictions come to fruition and the timelines of such remain uncertain. However, we expect the industry will be keeping a watchful eye on these developments. If they do materialise, query whether, in the short term, innovators might prioritise China out-licensing deals before such restrictions came into force. Similarly, in the long term, any potential limitations on China-related deals could drive more M&A for ex-China assets.

Ultimately, our expectation is for activity levels to remain strong for the rest of 2026 (assuming no further seismic shocks to the already volatile and unpredictable business environment). We expect innovators to remain the most active in 2026 and would not be surprised to see bolder bets being taken on earlier stage assets, particularly those in hot therapeutic areas and for assets offering best or first in class potential. With deal drivers a plenty and industry confidence riding high, the scene is set for H2 2026 to deliver and we certainly hope it does.