Last week, our international team attended the J.P. Morgan Healthcare Conference (JPM) 2026 in San Francisco. Adrian Toutoungi and our team have put their heads together to summarise what they heard at the conference. In this first of a two-part series, we cover key trends in M&A, public markets, private fundraisings and biopharma partnering transactions. Part two looks at hot modalities, disease areas of focus, diagnostic/CDx trends and CDMO developments – read more.
Market sentiment
Solid optimism was the prevailing sentiment amongst biotech CEOs and investors marking a notable shift from the cautious optimism of January 2025. The mood has evolved from tentative hope to execution. Anecdotally, attendance seemed strong and the focus was squarely on deal-making, partnerships and capital deployment rather than mere survival. The glorious San Francisco weather provided a fitting backdrop to the improved sentiment. Blue skies and daily sunshine bathed Union Square throughout the week and undoubtedly lifted spirits.
There was widespread discussion about the expected trajectory of US interest rates during 2026. Following three rate cuts in late 2025 (1% in total), the Federal Reserve has signalled a pause. Our friends at Leerink shared some insights on the panel at the Taylor Wessing drinks reception on Sunday evening. Commentators are predicting only one or two further rate cuts during 2026 (likely 25-50 basis points). Whilst this more conservative outlook tempers expectations, the stabilisation of rates at current levels – combined with improved economic momentum – has been sufficient to unlock capital and drive deal-making forward.
The impact of regulatory and policy changes under the new US administration also received some attention. There is simultaneous uncertainty and opportunity. Concerns about vaccine policy, potential tariffs on pharmaceutical imports, reduced NIH funding and delays at the FDA regarding clinical trials approvals and NDA/BLA applications created headwinds in 2025. Some of these remain. We are seeing increased interest in switching early trials from US to UK or EU, for example.
AI continues to dominate conversations, and the focus has matured from theoretical hype to measurable, real-world value. Many discussions touched on AI's expanding role across the drug lifecycle—from discovery through manufacturing to post-approval vigilance.
M&A
Hopes were high for billion-dollar transactions, but no major M&A was announced during the week. However, this absence of headline-grabbing deals at the conference itself doesn't signal a lack of activity.
There was some speculation that major announcements may be reserved for other industry events, such as the TD Cowen Health Care Conference in March in Boston or the Jefferies healthcare conference in London in November, which has been gaining momentum as the 'J.P. Morgan for Europe'.
Nevertheless, there remains general consensus that 2026 will see continued M&A activity as Big Pharma grapples with looming patent cliffs. Drug sales of approximately US$250 billion remain at risk between 2025 and 2029, creating urgent pressure to replenish pipelines.
In the weeks leading up to JPM:
- Eli Lilly announced its acquisition of Ventyx Biosciences for approximately US$1.2 billion in an all-cash transaction. Ventyx, a client of ours, is developing VTX002, an NLRP3 inflammasome inhibitor. The acquisition represents a significant vote of confidence in NLRP3 as a therapeutic target for inflammatory diseases, with VTX002 showing promise in treating conditions such as gout and heart failure. This deal underscores Big Pharma's continued interest in novel immunology mechanisms and validates the NLRP3 pathway as an attractive area for drug development.
- Amgen announced its acquisition of UK-based, Dark Blue Therapeutics, an Oxford University spin-out, for up to US$840 million. Through the deal, Amgen will gain access to a small molecule investigational protein degrader targeting MLLT1/3 for treatment of acute myeloid leukaemia.
- Pfizer completed its acquisition of Metsera, a clinical-stage biopharmaceutical company accelerating the next generation of medicines for obesity and cardiometabolic diseases. The total deal value of around US$10 billion represents a significant uptick from the US$7.3 billion value of Pfizer's original offer. The acquisition followed a dramatic bidding war. Metsera initially agreed to be acquired by Pfizer in late September, but just over a month later, Novo shocked the world by offering US$6.5 billion upfront for the biotech, outbidding Pfizer's US$4.9 billion upfront offer. Chaos ensued, with Pfizer racing to the courts in an effort to block Novo's deal. The US Federal Trade Commission (FTC) expressed concerns about the offer and, days later, Metsera changed course, ultimately accepting Pfizer's improved bid.
- AstraZeneca acquired its AI partner Modella AI to own and deploy multimodal AI foundation models in-house across discovery and development, embedding AI capabilities directly into its oncology R&D environment.
Rumours continued to swirl about potential mega-deals, including Merck's reported discussions to acquire Revolution Medicines for up to US$32 billion and Lilly's potential acquisition of Abivax for approximately EUR15-18 billion, though neither was confirmed during the conference.
New leadership at the FTC, which, along with the Department of Justice, enforces US antitrust laws, is expected to adopt a higher threshold to challenge deals (notwithstanding its intervention in the Metsera/Pfizer/Novo deal), potentially facilitating M&A activity. The previous administration's FTC, under Lina Khan, was perceived as having created a hostile environment for biopharma deal-making based on novel theories of harm.
As in recent years, almost all deals continue to be structured with significant contingent or milestone consideration. The quip doing the rounds at JPM that "M&A is the new licensing" remains apt, reflecting the heavily back-loaded nature of deal values.
Public markets
The IPO window is inching open and expectations for 2026 remain measured. With the Federal Reserve signalling only one or two rate cuts during 2026 – rather than the more aggressive easing some had hoped for – there is limited expectation of a significant stimulus in the capital markets.
Leerink pointed to 80 cross-over rounds in 2025, creating a strong IPO queue. Commentators are predicting 15-50 biotech IPOs on Nasdaq in 2026, with a focus on late-stage companies, with Atkis Oncology completing its IPO and Eikon Therapeutics announced its intention to list. No-one is expecting to see a return to the phenomenon of IPOs of pre-clinical biotechs from the heady days of 2020. This is a gradual thaw rather than a flood. Bankers are, however, buoyed by the market's positive responsiveness to good data (something that has been missing in flatter markets) and provided an encouraging outlook.
Reverse mergers continue to present opportunities as private companies seeking listings pair up with public biotechs whose programmes have failed, leaving them as cash shells.
Private fundraisings
Venture capitalists continue to have substantial dry powder which they need to deploy with growth equity and venture firms sitting on an estimated US$880 billion according to recent reports. New funds continue to be formed adding to the capital available for investment. The first week of January 2026 was one of the busiest weeks on record for private biotech fundraising, with billions raised in the days leading up to JPM (while noting also the trend to store announcements of prior deals for the big week itself).
Notable financings announced around JPM included a US$35 million Series A financing for Epilepsy GTx, a client of ours, is developing novel gene therapies for epilepsy. Nuclera, another of our clients, is pioneering protein synthesis technology, announced an US$85 million Series C financing round, demonstrating continued investor appetite for innovative platform technologies that can accelerate drug discovery and development. And Mediar Therapeutics, a Boston-based biotech, secured US$76 million in Series B financing, to advance the company's first in class therapies designed to halt fibrosis, including in systemic sclerosis and chronic kidney disease, another deal on which our life sciences team advised.
Several themes emerged from discussions with VCs at JPM:
- Limited partners (LPs) continue to concentrate their capital with well-known VCs with strong track records, whilst newer teams face challenges raising new funds.
- European and Middle Eastern LPs remain relatively underweight in venture as an asset class compared to US LPs and are being increasingly courted by US VCs .
- Valuations have become more attractive compared to previous years, partly due to competition from Chinese biotechs making this an opportune time to invest.
- Early 2026 deal flow is heavy - the first week of January saw roughly US$2.3 billion in new private biotech capital, with public follow-ons and an IPO pushing the combined total to about US$4.9 billion.
- Mega-rounds – often US$100 million or more at first financing – now account for roughly half of all dollars deployed at the early stage as investors try to take financing risk off the table by giving companies enough capital to reach clinical proof-of-concept readout. The growth in round sizes reflects a trade-off: by joining bigger syndicates, investors dilute their ownership stake, but the companies they are backing have a better chance to survive and grow without immediately returning to financing mode.
Biopharma partnering transactions
The most significant transaction announced during JPM week was AbbVie's licensing agreement with RemeGen for a PD-1/VEGF bispecific antibody, valued at up to US$5.6 billion. AbbVie will pay US$650 million upfront, with up to US$4.95 billion in regulatory, development and commercial milestones. RemeGen retains rights in Greater China and will receive tiered, double-digit royalties on ex-China sales. This deal underscores the growing interest in PD-1/VEGF bispecifics which combine immune checkpoint inhibition with anti-angiogenic mechanisms and show particular promise in combination with antibody-drug conjugates (ADCs).
The deal joins a string of recent high-value transactions involving Chinese-developed PD-1/VEGF bispecifics:
- In 2025, Pfizer paid 3SBio US$1.25 billion for exclusive ex-China rights to SSGJ-707.
- In 2024, MSD secured rights to LM-299 from LaNova Medicines in an agreement worth up to US$3.28 billion.
- Akeso paid US$5 billion in 2022 for ex-China rights to Summit Therapeutics' ivonescimab.
- And, in late 2025, Summit submitted a BLA for ivonescimab in non-small cell lung cancer, potentially making it the first PD-1/VEGF bispecific to gain US approval.
Over the past six years, there has been a strong uptick in blockbuster deals involving Chinese assets. Chinese biotechs continue to move faster and at a lower cost than their US counterparts, with some start-ups progressing from launch to clinical trial in 18 months or less. The quality of science has dramatically improved, with "me too" programmes giving way to "me better" or "best-in-class" assets tackling novel targets and complex modalities such as ADCs, T-cell engagers and novel antibody formats.
Key opinion leaders see continued opportunities in collaborating with China, with licensing deals involving Chinese biotech and pharma companies expected to continue throughout 2026, particularly in high-value oncology transactions.
