What will 2026 hold for life sciences and biopharma?

2026 promises to be a year marked by both challenge and opportunity. Market participants should anticipate significant shifts, whether through transformative M&A, the integration of AI into drug development, or advancements in Medtech driving smarter and safer solutions. Navigating these dynamic conditions will require agility, a readiness to adopt innovative technologies, and a keen ability to identify value amid ongoing change. As the life sciences and biopharma sectors continue to evolve, those best positioned will be the ones who adapt quickly and seize emerging prospects in an increasingly complex global environment.

Biopharma’s “late-stage land grab” accelerates in 2026

Prediction: 2026 will see a pronounced upswing in late-stage and end-of-development biopharma acquisitions, with larger transaction sizes than the 2024–25 cycle as large-cap buyers look to pre-empt competitive auctions to secure near-term revenue and de-risked innovation. With year-one policy turbulence in the U.S. following the 2024 elections, boardrooms at innovation-forward biopharmas are set to re-engage on U.S.-centric acquisitions. 

What we expect: more premium-priced transactions for Phase III and launch-ready assets, portfolio pruning to demonstrate alignment with (and, in certain cases, to show pathway to funding of) R&D bets, and creative structures that navigate pricing and regulatory scrutiny while attempting to accelerate speed to closing. 

The China clinical-speed paradox: 2026 dealmaking pivots to Europe and the U.S.

Prediction: The “China conundrum” will persist through 2026: global acquirers will continue to be interested in China’s unparalleled clinical trial velocity but seek to limit direct exposure and political fallout from China “bets”. Expect licensing-first strategies, European and U.S. asset pivots, and joint ventures that ringfence geopolitics. Players will seek to leverage China for development acceleration, while executing acquisitions in Europe and the U.S. to mitigate cross-border sensitivities. 

What we expect: more outbound China-to-Europe collaborations, structured earnouts tied to ex China milestones, and shared IP frameworks designed to pass muster under applicable FDI and national security laws.

Medtech in 2026: AI enabled devices, ASC migration and cyber-by-design

Prediction: 2026 MedTech dealmaking will concentrate on assets that pair device innovation with verifiable data and reimbursement tailwinds, e.g. AI assisted diagnostics and imaging, robotics in ambulatory surgery centers (ASCs), and connected monitoring platforms with proven outcomes. Buyers will consider carefully asset interoperability and cybersecurity maturity as gating items alongside clinical evidence. 

What we expect: consolidators pursuing carve outs and tuck-ins that accelerate site of care shifts (e.g. orthopedics and cardiology moving into ASCs), add AI ready data pipelines, and de risk regulatory pathways. With tariffs and supply chain rerouting in focus, acquirers will also favor resilient manufacturing footprints and modular software architectures that ease cross-border approvals and updates. 

Consumer healthcare M&A: fragmentation fuels bolt-ons and carve-outs in 2026  

Prediction: Consumer healthcare will remain fragmented in 2026, with buyers prioritizing regional roll-ups, capability bolt-ons and carve-outs over scarce available “power brands”. 

What we expect: acquisitive groups to stitch national footprints, combine OTC labels with data/CRM and DTC channels, and target assets with measurable unit economics rather than headline awareness. Sellers will divest non-core brands to refine focus and in places fund innovation, and we may see more assets “thrown out” in larger consumer packaged goods transactions. Pricing will bifurcate resilient categories with innovation pipelines and data rich consumer engagement will sustain premiums; undifferentiated brands without new product development will trade at discounts. 

AI becomes a gating item in drug development M&A

Prediction: In 2026, AI-native capabilities will become gating items in healthcare dealmaking. Acquirers will ascribe discrete value to AI-enabled discovery, trial design, and post-market evidence engines, and will discount targets that cannot demonstrate validated, regulator-ready AI workflows. 

What we expect: buyers to require auditable model lineage, explainability frameworks suited to regulators, and data governance that passes cross-border scrutiny. Milestones will increasingly tag to AI-assisted development states and label expansion timelines. 

Public and private capital must fire together in 2026

Prediction: The 2026 upcycle in global M&A depends on public equity markets and private capital working in tandem. A modest reopening of IPO and follow-on windows, combined with private capital and bank financing, will re start the “revolving door”: sponsors exit, LPs are repaid, dry powder is recycled, and strategics regain confidence to use stock alongside cash. When either side stalls, auctions processes lengthen, structures contort, and high-quality assets remain trapped. 

What we expect: more dual track IPO/sale processes, larger corporate carve-outs, and consideration mixes that blend stock, cash and private capital. Continuation funds and secondary sales will bridge gaps but are not substitutes for genuine public price discovery. If equity windows broaden and rate volatility eases, valuation spreads should narrow, and, assuming no regulatory hurdles, transaction timelines tighten across all sectors—not just in life sciences and healthcare.