Drug companies have caught the dealmaking bug. Big recent transactions in the pharmaceuticals industry include Novartis’s $12bn acquisition of Avidity Biosciences, Pfizer’s $10bn bid for Metsera and on Monday Gilead Sciences’ agreement to buy blood cancer specialist Arcellx for up to $7.8bn. From the way the market is shaping up, that’s only the beginning.
There is lots of pent-up demand. Company bosses spent much of 2025 paralysed by the threat of pharma tariffs and unsure of how far the White House would push them to give US patients the lower prices available elsewhere. Most of the action happened after the fog had cleared: fourth-quarter biopharma mergers and acquisitions nearly hit $95bn, according to Biomedtracker. If that level sticks, 2026 will be the best year in the past decade.
Big pharma has emerged from its stasis with plenty of firepower. If giants in the sector were happy to lift their leverage to twice their annual ebitda, still a fairly conservative level, it would free up $38bn in spending capacity for Merck & Co, $16bn for AbbVie and $56bn for Eli Lilly, on Barclays’ estimates. And they might feel freer to spend, since the financial impact of the pricing agreements President Donald Trump struck with 17 pharma companies is less onerous than the market initially feared.