Life sciences companies are entering 2026 with momentum.
According to Ernst and Young’s (EY) 2026 Firepower M&A Report, dealmaking is accelerating — driven not by short-term market shifts, but by long-term strategic fundamentals. EY was recently a Knowledge Partner at the McDermott Forum, McDermott recently collaborated with knowledge partner EY around the McDermott Forum, and we are pleased to spotlight key findings from this year’s report.
Here are several highlights:
- M&A activity rebounded in 2025, with US$240 billion in life sciences deals signed, marking a significant increase in overall spend.
- Average deal size rose as companies prioritized market-ready and late-stage assets positioned for near-term launch.
- Alliance “biobucks” reached record levels, with limited upfront investment compared to total potential deal value.
- China-based innovation reached a tipping point, capturing a growing share of inbound alliance investment.
- A projected US$370 billion growth gap by 2032 is driving urgency among industry leaders to secure new revenue sources.
- AI is becoming central to deal strategy, supporting sourcing, diligence, integration, and execution.
- The industry holds approximately US$2.1 trillion in available Firepower, positioning companies to continue pursuing strategic transactions despite geopolitical and regulatory headwinds.
The report underscores a clear message: life sciences companies depend on deals to sustain growth — and execution will matter more than ever in a competitive environment.
Explore the full analysis and detailed data in EY’s 2026 Firepower M&A Report.
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