"M&A is coming back." This statement is becoming a frequently cited assessment among analysts. For those Biotech founders who gritted their teeth through the financing winter of 2024, the summer of 2026 has finally brought a window for exit.

 

BioSpace statistics show that in the first half of 2026, the global biopharmaceutical industry completed a total of 52 M&A transactions. In the same period of 2025, that number was only about 30. In one year, the transaction volume nearly doubled.

 

But this return looks distinctly different from the previous M&A cycle. Rather than mega-mergers worth tens of billions, the pharmaceutical industry is now seeing a string of "precision bolt-ons" in the $1 billion to $8 billion range. In other words, buyers are no longer pursuing "big," but "right."

 

More importantly, Chinese innovative drug assets are being repriced in this wave. From ConnoMed to Terns Pharmaceuticals, from Candid Therapeutics to Ouro Medicines, biotechs with Chinese DNA are being acquired by global pharmaceutical giants at an unprecedented pace.

 

01: Who Is Buying?

 

If one were to paint a panoramic picture of M&A in the first half of 2026, the most prominent spot would undoubtedly belong to Eli Lilly. Nine deals, with over $25 billion in committed capital — this giant, flush with cash from its weight-loss and diabetes drugs, has been acquiring at a rate of roughly 1.5 deals per month.

 

In January, it acquired Ventyx Biosciences for $1.2 billion; in February, it announced the acquisition of Orna Therapeutics for up to $2.4 billion; in March, it acquired Centessa Pharmaceuticals for $7.8 billion. Entering the second quarter, Lilly's pace has not slowed but accelerated: in April, it acquired CrossBridge Bio, Kelonia Therapeutics, and Ajax Therapeutics; in May, it acquired three vaccine companies; and by June, several more names had been added to its acquisition list.

 

"We don't need M&A to buy revenue," Eli Lilly CEO David Ricks explained in a January interview. He prefers to acquire assets at early stages, where value can be added to the project. Acquiring a company already operating assets comes with many drawbacks: "Typically, you're just buying the problems of the assets at that time."

 

Close behind is Gilead. Three deals with $14.8 billion in committed capital, the largest being the acquisition of cell therapy partner Arcellx for $7.8 billion at the end of February. In March, it acquired Ouro Medicines and its T-cell engager platform for $2.175 billion. In April, the giant spent $5 billion to acquire Tubulis. Three deals, three different technology areas, all pointing to the same goal: establishing a leading position in the CAR-T and TCE bispecific antibody space.

 

GSK also completed three deals totaling $13.5 billion: acquiring RAPT Therapeutics for $2.2 billion in January, 35Pharma for $950 million in March, and Nuvalent for $10.6 billion in June.

 

 

But the crown for the largest single transaction does not belong to any American giant. In April, India's Sun Pharma announced the acquisition of Organon for $12.6 billion — the largest M&A deal in the first half of 2026. Organon is the women's health company spun off from Merck in 2021, with a vast portfolio of contraceptive and fertility treatments. Sun Pharma's acquisition catapulted an Indian generics manufacturer onto the global women's health stage.

 

The second-largest single transaction came from AbbVie. On June 22, the inflammation and immunology leader acquired Apogee Therapeutics for $10.7 billion, gaining a next-generation antibody pipeline targeting atopic dermatitis and asthma.

 

Although Merck did not lead in transaction volume, its March acquisition of Terns Pharmaceuticals for $6.9 billion was described by BMO Capital Markets as "one of the best deals Merck has done before Keytruda's patent expiration." Terns' core asset is an early-stage therapy for chronic myeloid leukemia (CML), targeting the $4 billion annual market potential of Novartis's blockbuster Scemblix. Meanwhile, Keytruda's $31.7 billion annual revenue faces a patent cliff in 2028.

 

Notably, M&A in the first half of 2026 exhibits a distinct structural feature: "fewer mega-deals." According to London Stock Exchange Group data, transactions between $1 billion and $10 billion account for 76% of total pharmaceutical deal value so far this year, compared to only 34% in the same period of 2025. In other words, MNCs are replacing past "billion-dollar mega-bets" with "mid-sized transactions."

 

Rajesh Kumar, Head of Life Sciences and Healthcare Equity Research at HSBC, noted that major pharmaceutical companies are aggressively acquiring targets, with "near-frenzied buying momentum." However, Nanna Lüneborg, General Partner at European life sciences VC firm Forbion, pointed out that MNCs are focusing on bolt-on acquisitions in the $1 billion to $5 billion range, primarily because integration is easier and antitrust regulatory reviews are less likely to be triggered.

 

Behind this strategic shift lies a change in risk perception. To mitigate risk, many mid-sized deals employ an "upfront + milestone" structure. In Lilly's acquisition of Centessa, a $6.3 billion upfront payment was supplemented by up to $1.5 billion in Contingent Value Rights (CVRs). Biogen's acquisition of Apellis similarly included CVRs tied to sales milestones.

 

Buyers have become more cautious — but they are dealing more frequently. The 52 transactions in the first half of 2026 represent a more than 70% increase over the same period in 2025.

 

02: China's "Hard Currency"

 

Perhaps the most noteworthy trend in the first half of 2026 is not who spent the most money, but where that money flowed.

 

On March 23, Gilead announced the acquisition of NewCo Ouro Medicines for $2.175 billion. The company's core asset — a BCMA/CD3 bispecific TCE antibody — came from Chinese pharmaceutical company ConnoMed. In November 2024, ConnoMed licensed global rights to CM336 to Ouro, receiving a $16 million upfront payment and approximately 15% equity. As a shareholder, ConnoMed received approximately $250 million in upfront payments from Gilead's acquisition, plus up to approximately $70 million in milestone payments. From licensing to acquisition — just over a year.

 

This marks the first time a NewCo established with participation from a Chinese pharmaceutical company has been wholly acquired by a multinational.

 

Just two days later, Merck announced the acquisition of Terns Pharmaceuticals for approximately $6 billion. Founded in 2016 by Chinese scientist Zhong Weidong, the company has headquarters in California and Shanghai. Its core asset is an early-stage therapy for chronic myeloid leukemia.

 

Two deals, totaling over $8 billion. This is no coincidence.

 

If we trace the timeline further back, a clear narrative emerges.

 

In August 2023, Hengrui Medicine licensed its TSLP monoclonal antibody SHR-1905 to OneBio (later renamed Aiolos), with an upfront payment of only $25 million. Five months later, GSK acquired the drug from Aiolos for a $1 billion upfront payment — a 40x multiple.

 

In December 2024, Jiyu Pharma licensed a food allergy prevention antibody drug to RAPT Therapeutics for a $35 million upfront payment; in January 2026, GSK acquired RAPT for $2.2 billion.

 

In 2023, Pumis licensed overseas rights to its PD-L1/VEGF bispecific antibody to BioNTech for a $55 million upfront payment. One year later, BioNTech acquired Pumis outright for under $1 billion. Another six months later, BioNTech sold partial rights to this bispecific antibody to BMS for a $1.5 billion upfront payment, with a total transaction value exceeding $11.1 billion.

 

The same asset — from $55 million to $11.1 billion. The spread is astonishing.

 

In 2026, similar scripts are accelerating.

 

In March, Candid Therapeutics entered into a reverse merger agreement with Nasdaq-listed Rallybio, achieving a backdoor listing. The company's core assets — two TCE bispecific antibodies — came from EpimAb Biotherapeutics (CND106) and Genor Biopharma (CND261). On May 3, UCB announced the acquisition of Candid for up to $2.2 billion.

 

From Chinese asset licensing to NewCo formation, from backdoor listing to MNC acquisition — the entire cycle took less than two years.

 

In April, Kailera Therapeutics, a weight-loss drug NewCo backed by Hengrui Medicine's assets, went public on Nasdaq, raising $625 million — the largest biotech IPO in the U.S. since 2021. On its first trading day, the stock surged 63%, with a market capitalization exceeding $3 billion.

 

Wang Yunfan, CEO of China Mergers & Merger Sources Group, told Tongxieyi that on its "China Big Buyer" intelligent equity transaction matching platform (www.chinamerger.com), over 200 listed pharmaceutical and medical companies are registered, and M&A demand is noticeably more active this year.

 

The data confirms this. In 2026 to date, Chinese innovative drugs have completed 45 outbound licensing deals, a 73% year-on-year increase, with a total disclosed value of $57.5 billion, up 135%. For the full year 2025, China's innovative drug out-licensing transactions exceeded $130 billion. China's share of global innovative drug transaction value has reached 49%, surpassing the United States.

 

Data from the National Medical Products Administration (NMPA) shows that in the first quarter of 2026, China's innovative drug out-licensing transactions exceeded $60 billion, approaching half of the 2025 full-year total.

 

Huang Yang, Head of Greater China Healthcare Research at J.P. Morgan, stated publicly: "Currently, large multinational pharmaceutical companies still have ample cash flow. Combined with the high uncertainty of early-stage innovative drug development, supplementing product pipelines through 'external sourcing' is likely to be a long-term process for large MNCs."

 

But challenges also exist. Zhang Yilin, Partner at Yafo Capital, has noted that the core reason why there have been few cross-border whole-company acquisitions of Chinese biotechs after 2025 is that most of the "low-hanging fruit" has already been picked, and the remaining assets carry relatively high valuations. In particular, the surge in the 18A sector in 2025 — with the secondary market's boom driving primary market valuations higher — has made pricing more challenging.

 

Another factor is geopolitics. As uncertainty around U.S. policy direction increases, multinational pharmaceutical companies must carefully assess potential policy risks when considering high-priced acquisitions of Chinese assets.

 

Yet when these challenges are placed in a broader context, they appear more like the inevitable growing pains of China's innovative drug industry as it matures.

 

From late 2023 to early 2024, Chinese biotechs experienced a rare wave of cross-border acquisitions: Genscript Biotech, Sinovent, BriaCell, Propella Bio, and Pumis — five biotechs were successively acquired by overseas pharmaceutical companies. In 2026, the moment for M&A of Chinese assets is arriving once again.

 

TONACEA 03: The Second Half — $250 Billion?

 

On July 3, Ipsen Chief Business Officer Philippe Lopes-Fernandes stated in an interview: "We have a lot of firepower left." After completing two recent acquisitions, the French pharmaceutical company still expects to hold approximately €1.5 billion ($1.72 billion) in cash by year-end. Lopes-Fernandes revealed that the company is evaluating several potential transactions in the Chinese market, but "competition has pushed up the price of Chinese assets from big pharma."

 

Ipsen's ambition is not an isolated case.

 

PwC wrote in its mid-2026 outlook report: "We expect M&A momentum to continue to strengthen in the second half of 2026." The report noted three forces will define healthcare M&A in the second half: consumer demand (women's health, GLP-1, etc.), patent cliff-driven pipeline replenishment, and technology-driven deals (AI, data assets).

 

Kristin Ciriello Pothier, KPMG's U.S. Life Sciences leader, offered more specific judgments. She believes buyers are poised for more active transaction activity, driven by three forces: AI-related collaborations and alliances, acquisitions of CMOs and manufacturing bases, and therapeutic area consolidation. Oncology assets lead, followed closely by cardiovascular and metabolic diseases.

 

The patent cliff is the fundamental driver. Over the next five years, nearly 200 drugs will lose patent protection globally, involving at least 69 blockbuster drugs with annual sales exceeding $1 billion, with cumulative lost sales potentially exceeding $300 billion. By 2030, flagship assets such as Keytruda, Eliquis, Opdivo, and Jardiance will face patent expirations affecting approximately $236 billion in annual revenue.

 

When the patent cliff arrives, pharmaceutical companies need acquisitions to fill revenue gaps. And China is becoming an important source for filling these gaps.

 

CCB International noted in a May research report that the core of M&A in 2026 lies in prioritizing reusable technology platforms that enable "one-to-many" indication expansion rather than single-asset bets. In areas such as TCE bispecifics, ADCs, and small nucleic acids, Chinese assets still hold significant untapped potential.

 

Zhang Yilin predicts that radiopharmaceutical acquisitions may emerge in 2026. He noted that licensing transactions in the radiopharmaceutical field are sparse: "Radiopharmaceutical targeted delivery is highly dependent on peptide ligands, and reliable peptide ligands are difficult to find... Even after licensing, without radiation safety permits and radionuclide synthesis capabilities, you need to acquire outright to ensure global supply chain security."

 

In March, AstraZeneca, which had previously acquired Fusion Pharmaceuticals, announced plans to build an RDC manufacturing and supply base in Guangzhou, further confirming the heating up of the radiopharmaceutical space.

 

A KPMG survey shows that 67% of investors expect transaction volumes to increase further in 2026, with 36% anticipating growth of at least 10%. PitchBook data indicates that if the current pace continues in the second half, the total value of biopharmaceutical M&A for the full year could exceed $250 billion, setting a new industry record since 2019.

 

From "global follower" to "global first-tier player," Chinese innovative drugs are undergoing an identity shift. Of the world's top ten pharmaceutical licensing deals in 2025, seven originated from Chinese companies. R&D is concentrated in areas such as oncology, hematology, and immune diseases, with ADCs and bispecifics showing the fastest growth.

 

It can be said that Chinese innovative drugs are moving to center stage on the global platform.

 

The 52 transactions in the first half of 2026 are just the beginning. As the patent cliff countdown ticks, as MNC cash reserves pile up, and as Chinese biotech clinical data continue to validate — the M&A market in the second half may become even more intense than the first.

 

Those assets that can fill pipeline gaps and possess differentiated scientific advantages — whether from Boston, Shanghai, or London — will become the targets of pharmaceutical giants' competition.

 

And Chinese innovative drugs are moving from "nice-to-have" to "must-have."

 

References: 

1. Chinese Innovative Drugs Return to the M&A Arena; Tongxieyi

2. IPO Then Swift Acquisition: The New Playbook for Chinese NewCos; Tongxieyi

3. $8 Billion in M&A in Two Days: Chinese Innovative Drugs Becoming Global "Hard Currency"; Tongxieyi

4. Biopharma strikes 50+ M&As deals in H1, led by Lilly's $25B spend

5. Drugmaker Ipsen Sees More Deals Coming to Continue Buying Spree

6. Lilly's $25B+ M&A spree captures half of pharma's 2026 capacity

7. PwC declares biopharma ecosystem 'back to full health' as M&A buoys sector

8. In Tight Deal Environment, Pharma May Need To Think Big

9. Q1 2026 Ends with $46.8B in Biopharma M&A and a 7% XBI Surge

10. UCB captures Candid in $2.2B autoimmune deal as pharma's M&A train chugs along

11. Pharma Double-Dippers Lead Q1 Deal Activity to Nearly $47B

12. Merck to buy Terns for $6.7B, taking a leukemia drug that could challenge Novartis' Scemblix

13. Merck transforms itself through dealmaking as clock ticks on top-selling drug

14. 'Buying stuff like it's going out of fashion': Biotech M&A on track for best year since pre-Covid

15. Big Pharma race to snap up biotech assets as $170 billion patent cliff looms