Life sciences companies are entering 2026 with momentum.

According to Ernst and Young’s (EY) 2026 Firepower M&A Report, dealmaking is accelerating — driven not by short-term market shifts, but by long-term strategic fundamentals. McDermott recently collaborated with knowledge partner EY around the McDermott Forum, and we are pleased to spotlight key findings from this year’s report.

Here are several highlights:

• M&A activity rebounded in 2025, with US$240 billion in life sciences deals signed, marking a significant increase in overall spend.
• Average deal size rose as companies prioritized market-ready and late-stage assets positioned for near-term launch.
• Alliance “biobucks” reached record levels, with limited upfront investment compared to total potential deal value.
• China-based innovation reached a tipping point, capturing a growing share of inbound alliance investment.
• A projected US$370 billion growth gap by 2032 is driving urgency among industry leaders to secure new revenue sources.
• AI is becoming central to deal strategy, supporting sourcing, diligence, integration, and execution.
• The industry holds approximately US$2.1 trillion in available Firepower, positioning companies to continue pursuing strategic transactions despite geopolitical and regulatory headwinds.

The report underscores a clear message: life sciences companies depend on deals to sustain growth — and execution will matter more than ever in a competitive environment.

Explore the full analysis and detailed data in EY’s 2026 Firepower M&A Report.