There's a biotech boom in dealmaking
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Illustration: Annelise Capossela/Axios
Biotech is dominating the (very) early 2026 deals market, whether that be startup fundings, IPOs, or mergers.
Why it matters: This is a reversal of the usual order, in which biotech plays distant second cousin to the sorts of tech that don't need FDA approval.
State of play: 25 of the 59 venture deal blurbs in Axios Pro Rata so far this year have been for biotech startups, including seven rounds of $100 million or more.
- The only priced IPO was for Aktis Oncology, while two more biotechs filed for IPOs last Friday.
- Eli Lily and Amgen signed large acquisitions, while Merck reportedly is in talks to buy Revolution Medicines for over $32 billion.
Behind the scenes: Part of this is just a calendar quirk, as biotechs like to make news ahead of the annual JPMorgan Healthcare Conference that kicks off Monday in San Francisco. But there are some other converging forces:
- Investors are getting giddy about how AI could apply to biotech, in terms of both drug discovery and development. We still don't have an AI-designed drug in the market, but there are plenty in the pipeline.
- The Trump administration is viewed as a light-touch regulator, particularly when it comes to certain classes of new drugs, despite long-term concerns about the future of American scientific research.
- The patent cliff is coming for more blockbuster drugs, with both Merck's Keytruda and Bristol Myers Squibb's Eliquis getting to go generic in 2028.
- Biotech stocks had a very strong 2025, with the XBI index more than doubling the S&P 500's performance.
The bottom line: Biotech will eventually take a dealmaking backseat, but won't be a quiet passenger.
