Q-dub Implications of M&A trends, so many small deals, and private deals

Research evidence excerpt

Q-dub Implications of M&A trends, so many small deals, and private deals

Biotechnology - Immunology

Immunology - Market Overweight

Q-dub Implications of M&A trends, so many small deals, May 17, 2026

and private deals

The Wolfe Byte

YTD M&A pharma has been agnostic about therapeutic area and uninterested in larger deals. Private acquisitions

are leading the deal volume, which is not directly working in favor of public markets

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Year-to-date most M&A deals are on the lower end of the mid-cap range, clustering around $1B-$5B (~45% of deals

YTD). We are not even halfway through 2026 and the volume of this deal size is on par with or meaningfully exceeding

previous years. On the small-cap deal size, we notice a lackluster volume, suggesting that pharma is uninterested in

little 'tuck-in' acquisitions and is leaning into a greater volume of relatively more expensive bets. However, only one 'big'

deal this year being Sun Pharma's acquisition of Organon for $11.75B (and Organon doesn't even count as biotech).

$1B-$5B deal size is the sweet spot thus far.

Broadly speaking, pharma appears to be agnostic about therapeutic area as acquisitions have been fairly balanced

across oncology, CNS, immunology, rare disease, and other areas. Ideally, we would like to see a heavier skew toward

acquisition of public companies, yet ~60% of YTD deals were of privates. The unfortunate dynamic here is that pharma

cash is directly returned to VCs for more biotech IPOs in the future, not going toward largercap-focused public investors