Big Pharma enters 2026 with an appetite for deals

Revolution Medicines CEO Mark Goldsmith, whose company might be at the center of what could wind up being the biggest biotech deal of the year, is staying tight-lipped.

His company, a California-based startup working on a late-stage oral cancer treatment, Daraxonrasib, is reportedly in talks with Merck to be acquired for as much as $32 billion, which would make it the biggest biotech deal since Pfizer bought Seagen for $45.6 billion in 2023. At the JPMorgan Healthcare Conference in San Francisco on Monday, analyst Brian Cheng asked Goldsmith, “How do you balance your goal in building a bigger machine then, you know, taking strategic transactions in front of you?”

“We have very little to say on the latter part of your question since we have an established policy of not commenting on market speculation,” Goldsmith said. “But with regard to what we are building, it’s not our goal to build something big. It’s our goal to build something that’s impactful.”

Merck, the company reportedly in talks to buy Revolution Medicines, was more cavalier. Speaking at the same conference on Monday, Merck CEO Mark Davis said he sees an opportunity for deals worth “multi tens of billion” dollars.

“We are not limited from a balance sheet,” Davis said. “It’s more, where do we see strategic opportunity?”

As some of the most lucrative drugs lose exclusivity in the next few years, pharmaceutical giants are increasingly shopping around for biotechs to add to their portfolios — and they are more than happy to pay a hefty premium for the right company.

Merck’s cancer drug, Keytruda, is the second-most sold drug after Eli Lilly’s GLP-1, tirzepatide. The drug is expected to have brought in $31.6 billion in sales last year, or about half of the company’s annual revenue. 

The drug also faces patent expiry in 2028, meaning Merck needs to fill a Keytruda-sized hole in its portfolio pretty soon as competition from Keytruda generics will begin to eat into its revenues. Companies like Pfizer, Amgen, and Novo Nordisk find themselves in similar positions.

M&A activity began heating up as biotechs made advancements in gene therapies and oncology, two lucrative treatment areas. For some Big Pharma companies, business development spending is now about equal to, or more than, research and development. 

In 2025, announced global biotech deals totaled $228.4 billion, up from $132.3 billion in 2024, data from Dealogic shows. Many of those deals were concentrated in the latter half of the year, once the sector gained clarity from the Trump administration amid a wave of threats of pharmaceutical tariffs. Just two weeks into 2026, $9.2 billion in deals have been announced, according to Dealogic.

Bid-offs are increasingly common 

The Wall Street Journal reported on January 8 that AbbVie was in talks to buy Revolution Medicines. The drugmaker later issued a statement saying it was not in talks to acquire the oncology biotech. Later that day, the Financial Times reported that Merck was in talks to buy Revolution Medicines for about twice the company’s market capitalization prior to the reports, suggesting there was potentially a bidding war happening behind the scenes. 

It wouldn’t be the first time. Late last year, Pfizer faced off against Novo Nordisk in a high-profile bidding war about Metsera, a GLP-1 startup. Pfizer ended up buying Metsera for $10 billion, up from the $7.3 billion it initially agreed to pay. 

Pfizer’s chief financial officer, Dave Denton, told Sherwood News in November that the company has about $6 billion left in “firepower” earmarked for acquisitions. He said he thinks the company may need more assets in Immunology & Inflammation. 

“That’s where we’d likely look to supplement through business development over time,” he said. 

Mike Doustdar, CEO of Novo Nordisk, told Bloomberg the company is “in the market for big or small.” Novo, which was willing to pay $10 billion for Metsera, will see its patent on its blockbuster diabetes drug, Ozempic, expire in the US in 2031.

“As long as it’s complementary to our own assets, then we can go very big, very big in buying something in, but it has to be worth it and it has to be so much better than whatever we have,” Doustdar said. 

Eli Lilly is reportedly in talks to acquire French biotech Abivax for €15 billion. Abivax announced positive Phase 3 trial results for obefazimod, its drug that treats an inflammatory bowel disease, in July. 

“If you are Big Pharma, you cannot ignore that this product may be one of the most used products in the next decade,” Abivax CEO Marc de Garidel, attending the JPMorgan Healthcare Conference, told Bloomberg News.

Brian Lian, CEO of Viking Therapeutics, a late-stage GLP-1 biotech, also suggested on Tuesday that interest in his company is mounting. Viking, which has a market value of over $3 billion, has been rumored to be an M&A target. 

“I think the interest is probably broader than is visible,” he said. “I think that there are more parties sort of circling the space and are very intrigued.”