US Biotechnology: *SLIDES* State of Biotech: Halftime Stats – Strong H1 across Financings and M&A

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US Biotechnology: *SLIDES* State of Biotech: Halftime Stats – Strong H1 across Financings and M&A

rma madeleine.lee@ubs.com

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business development and M&A, driven by a significant looming loss of

exclusivity (LOE) cliff. With approximately $400B of revenue at risk over the next eight Roy Zawadzki, PhD

years, large-cap pharma companies such as MRK and BMY face increasing urgency to Associate Analyst

replenish pipelines through external innovation. At the same time, balance sheets roy.zawadzki@ubs.com

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remain as strong as ever, with an estimated $500–600B of combined cash and debt

capacity available to deploy. This dynamic is already translating into increased deal Anson Dang, PhD

activity, positioning smid-cap biotech as primary beneficiaries through acquisitions and Associate Analyst

anson.dang@ubs.compartnerships, while also providing a meaningful valuation backstop for the sector.

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Indeed, pharma M&A activity has returned with force in 2026, with year-to-date

deal value approaching ~$96B in just six months, already nearing full-year 2025

levels. Momentum has been particularly strong in Q2/26, which delivered

approximately $54B in deal value, marking the most active quarter since late 2023.

Importantly, deal volume has already surpassed last year’s total, with a healthy mix of

both <$5B and $5-20B transactions, reinforcing the breadth of activity. If this pace

continues, 2026 is on track to become one of the largest years on record for biotech

M&A, particularly for transactions under $20B.

At the same time, the capital markets environment has improved meaningfully,

removing a critical overhang on the space. Follow-on activity has rebounded to

levels not seen since 2020–2021, with roughly $8–10B raised per quarter in recent