Health industries dealmaking continues to be about manoeuvring the patent cliff, and dealmakers increasingly look to research coming out of China.
2025 saw a rise in global deal values driven by megadeals and a surge in M&A activity in Asia. With patent cliff pressure increasing and more clarity on who will play in the obesity market in the midterm, big pharma shows stronger ambition to put long-hoarded cash reserves to work to fill portfolio gaps. We are seeing higher readiness by buyers to go for the pricier acquisitions of late-stage validated assets with promising near-term pipelines. In this blog post, I reflect on the current industry trends globally and in Switzerland and assess the current market sentiment alongside the upcoming deal themes that can be expected to dominate M&A in 2026.
Last year, health industries dealmakers announced approximately 3’700 M&A deals globally, which is c.6% below the prior year. Driven by a higher number of megadeals—with deal values in excess of c.$5b—the total disclosed deal value has increased by 46%. Notable announced megadeals include Novartis’ acquisition of Avidity Biosciences (c.$12.0b), Pfizer’s takeover of Metsera ($10b) and Capvest’s purchase of the German generics company STADA (c.$11.7b).
Regionally, we saw a shift in dealmaking towards Asia—+9% in volumes (mainly China-driven)—while in the Americas volumes dropped by 25% over the prior year to roughly 1’300 announced transactions.
The market concentration in megadeals, the divergence across regions and the surge in China-led activity all point to a market that is being re-centred around innovation, scale and strategic relevance—not just volume. Against this backdrop, health industries dealmakers are entering 2026 with renewed confidence and a stronger sense of urgency. After two years of navigating the M&A “triple threat” of tariffs, drug pricing pressure and regulatory change, activity is shifting from cautious stabilisation to active portfolio reinvention. In this regard, I recommend the Global Trends in Health Industry M&A blog post by my PwC colleagues Jaymal Patel, Global Health Industries Deals Leader, and Claude Fuhrer, Global Health Industries Transformation Leader.
The surge in the market is also observable when looking at the development of the key indices after the major shock of policy uncertainty was absorbed. Not only have big pharma valuations gained (as measured by the PPH), but also the broader indices IBB and XBI rose, which is a positive sign that investors are finding their way back into the market. This is usually a good precursor that money will again be available for biotech innovation, which will cycle through the industry and should be perceived as positive also for pharma services.
Source: S&P CapitalIQ, PwC analysis
Global M&A key themes for health industries in 2026
First, novel weight loss drugs show their impact also in terms of M&A activity. As demand for glucagon-like peptide-based (GLP-1) drugs is exploding across most Western markets, the industry has recognised the need to transact. While the first generation of weight loss drugs has so far been a “two-horse” race, the field is opening, and the tables are being set for the second and third generation, but the seats at the table are now being taken and players ensure they have the portfolio to capitalise on the next generation opportunities. The recent head-to-head between Pfizer and Novo Nordisk to acquire Metsera demonstrated the appetite to go after acquisition targets, following a year with rather few public bidding contests. We also saw Roche’s resolve to play a role in the obesity space through a collaboration and license deal with Zealand Pharma with a value of c.$5.3b. Both deals illustrate that the stakes are high in the race for future market share in the fastest-growing pharma market. The next thing to watch is how oral weight loss drugs shape the market. During JPM’s 2027 Healthcare Conference, the city of San Francisco was clustered in Novo ads promoting “the pill”. I expect to see further consumerisation of the weight loss market.
Second, we are seeing an increasing erosion of big pharma revenue from accelerating losses of exclusivity and the added pressure from generics and biosimilars. Evaluate Pharma concluded that already in 2025, an estimated $52b worth of revenue had been subject to the expiry of the underlying patents. This figure—widely referred to as the “patent cliff”—is expected to double ($104b) in 2028. For comparison, this reflects almost 7% of global pharma revenue.
Source: Evaluate Pharma (2025)
The threat of patent expiry and generics competition typically swing in decade-long cycles and currently affect many of the larger players. While this has been a threat for a few years already, I expect a continued surge in strategic portfolio additions as these looming gaps in the top line will need to be filled with validated assets in late-stage development. For affected players feeling strongly about their short to mid-term pipeline, I see money flowing back into earlier-stage assets which will continue to provide tailwinds to the industry.
Third, private equity (PE) deals are expected to gain traction again. Exits on STADA and Zentiva have opened the playing field for further exits. This will be matched by demand driven by the desire of investors to re-invest in stable healthcare platforms with predictable demand, such as generics, outpatient networks, elderly care and occupational health, as protection against reimbursement risk, geopolitical uncertainty and macro volatility.
Spotlight: Why the life sciences deal flow is shifting towards China
Fourth and last, China is becoming a core deal engine as innovation, scale and cost efficiency converge. China’s biopharma ecosystem is driving record outbound licensing and NewCo structures.
China is rapidly becoming one of the most important engines of pharmaceutical innovation globally. It now accounts for around a third of all clinical trials and has overtaken Europe in several therapeutic areas, making it the world’s second-largest developer of new medicines after the US. Data from IQVIA and Citeline on the relative share of clinical trial locations suggests that until 2017, less than 10% of clinical trials had originated in China, but this figure has risen to 30% in 2024. At the same time, the share of trials started by Europe-based institutions has almost halved from 45% in 2009 to as little as 22% in 2024.
Sources: Iqvia, Citeline
Adapted from https://econdevdispatch.substack.com/
Faster regulatory pathways, lower R&D costs and access to vast patient populations allow Chinese biotechs to move from discovery to clinical proof at exceptional speed—an advantage that is increasingly attractive to global pharma companies facing patent cliffs and rising development costs.
As regulatory uncertainty and costs weigh on drug development in the US and Europe, Western pharmaceutical groups are looking east for pipeline replenishment. This is driving a surge in cross-border partnerships that give global players access to late-stage, clinically validated Chinese assets.
Two deal models now dominate this flow of innovation. Traditional licence-out agreements allow Chinese biotechs to retain ownership while granting global partners rights to develop and commercialise drugs abroad—often supported by multi-billion-dollar upfront and milestone payments. For example, Pfizer’s 2025 licensing deal with 3SBio included $1.25b upfront and up to $4.8b in milestones for a PD-1/VEGF bispecific, underlining both the scale and quality of Chinese-originated assets.
Alongside this, NewCo structures are gaining traction: under this model, a drug is placed into a newly created Western-based company backed by international investors, giving pharma buyers clean governance, IP protection and global development rights, while the Chinese originator retains equity and upside.
China’s outbound licensing activity reached record levels in 2025, with $135.6b in total deal value, $7.0b in upfront payments and 157 transactions, while the number of NewCo deals rose from six to nine year-on-year. With this momentum, China is no longer just a source of discovery, but a central hub for global life-sciences dealmaking. For acquirers and investors, success will depend on using the right structures to combine China’s innovation speed with Western regulatory, data and IP standards.
And what about M&A in the Swiss health industry?
As PwC’s Swiss Pharma & Life Sciences Deals Leader, I also want to look at what is driving health industries M&A in Switzerland.
Last year’s deal count was broadly in line with the prior year, with a total of 120 transactions involving a Swiss buyer or target. However, with respect to the total value, last year marked a rebound driven by vivid dealmaking of Swiss players in the US: The Basel-based multinational Novartis alone announced four notable acquisitions: Avidity Biosciences, Anthos Therapeutics, Regulus Therapeutics and Tourmaline Bio. Eyeing to bolster its short- to mid-term pipeline, the pharma giant acted decisively by strengthening its cardiovascular, neuromuscular and renal disease platforms.
The number of health services deals increased from 23 in 2024 to 29 in 2025, driven by various hospital and care home acquisitions, which include Unispital Basel’s strategic purchase of Claraspital AG and Tertianum’s takeover of Senevita.
Source: Refinitiv, Deal Logic, PwC analysis
From an investment perspective, the past eight years have seen the rise of PE deals, which include venture capital (VC) investments. While pre-pandemic PE involvement was only reported in roughly 40% of Swiss deals, the presence of such financial investors has surged drastically. In 2025, 60% of announced health industries deals with Swiss involvement had a PE house sitting at the table. Besides the visible increase in interest from financial investors, there has been a mix shift within the group of financial investors from traditional PE houses to venture capitalists investing in early-stage pharma life sciences assets: While in 2018–20 an average of 28% of financial investors had been venture capital houses, this figure has risen to 43% in 2023–25.
In conclusion, health industries M&A activity in Switzerland has mirrored global trends, with the presence of large high-profile deals motivated by capability-driven portfolio additions in light of patent expirations and competition from generics and biosimilars. The persistently high share of deals with PE and VC involvement underlines the importance of financial investors, especially for young assets and start-ups, and shows that Switzerland continues to provide an ecosystem where early-stage assets can flourish and also find a route to exit.
“Short-term existing and new-generation obesity drugs will remain the main growth catalyst. However, navigating broader pipeline risk remains relevant in light of the patent cliff. While research out of China was always on the radar of Western dealmakers, it’s now squarely on the table and can’t be ignored. Recent large deals for ex-China rights between big pharma and Chinese biotech have paved the way for significantly higher and more visible activity. ”
Luca Borrelli, Partner, Pharma and Life Sciences, PwC Switzerland