Biotech dealmaking has reached a level this year that has already outstripped the whole of 2025, and RBC Capital Markets thinks the pace is unlikely to hold.
Cumulative deal value in the first half of 2026 came to $78 billion, against $42 billion for the entirety of last year, according to the bank's half-year sector review.
The volume of transactions was broadly similar to the first half of 2025, meaning the jump in value was driven by a handful of very large deals rather than a broader widening of activity.
At least seven transactions exceeded $5 billion, including Gilead's $5.84 billion purchase of Arcellx, Eli Lilly's $7.11 billion acquisition of Corcept, GSK's $8.55 billion deal for Nuvalent, AbbVie's $9.16 billion move on Apogee and Vertex's $9 billion agreement to buy Crinetics.
RBC describes the sector as one that "lives and dies" on takeovers, and notes that its own investor survey found 70% of respondents naming M&A as the single biggest tailwind for the second half.
The structural drivers remain intact. Large pharmaceutical companies face roughly $400 billion of revenue exposed to loss of exclusivity over the next decade, and hold more than $180 billion of aggregate free cash flow that can be deployed to plug the gap.
The US Federal Trade Commission has stayed permissive, and the recent rally in biotech valuations may have narrowed the gap between what buyers will pay and what sellers will accept.
The problem is on the buy side. Combined cash held by the large-cap pharmaceutical companies RBC tracks fell 18% to $130 billion by the first quarter, and several of the most active acquirers of the past six months have now spent their capacity.
Vertex, Gilead, AbbVie, Biogen and Neurocrine are all judged unlikely to execute another major deal in the near term, shrinking the pool of potential bidders just as target valuations rise.
The bank also points out that deal value has skewed to the first half of the year in every year since 2023, and that this year's buying has favoured marketed or phase III assets, suggesting limited appetite for earlier-stage risk.
Where RBC sees remaining firepower is with Merck, Novo Nordisk (NYSE:NVO), Sanofi, Lilly, Johnson & Johnson (NYSE:JNJ), Novartis and AstraZeneca.
It flags that AstraZeneca, Bristol Myers Squibb and Novo Nordisk carry among the largest pending patent cliffs but sat out the first-half rush, leaving them as the most obvious candidates to move next.
Its conclusion is that deals will keep coming, but not at the frenetic rate that powered the sector's run.
