AI reshapes dealmaking, with a 256% surge in potential deal value tied to AI platforms and AI becoming central to the deal cycle from target screening to integration, though roughly one-third of deals meet at least 100% of revenue targets.

China’s rapid ascent in biopharma is highlighted by capturing 34% of total alliance investment from the US and Europe in 2025 (up from 4% in 2020), with five of the year’s top 10 alliance deals involving Chinese firms.

The EY M&A Firepower report shows life sciences M&A activity in 2025 reaching around USD 240 billion, up 81% from 2024, driven by large-scale deals among big pharma, with average deal size climbing to about USD 2.1 billion, a 107% year-over-year rise.

Despite a 12% drop in overall deal volume and declines in biopharma, the sector is prioritizing best-in-class innovations ready for launch, maintaining strong fundamentals amid regulatory, geopolitical, and valuation headwinds.

Analysts anticipate continued strength in 2026, but foresee a widening growth gap to roughly USD 370 billion by 2032 as blockbusters lose exclusivity and geopolitical risks rise, with more than half of top pharma analysts neutral or negative on pipelines, M&A, and partnerships.

Looking ahead to 2026, the Firepower framework envisions USD 2.1 trillion in available dealmaking capacity, with AI at the core of M&A strategy to close growth gaps in a crowded, competitive market.

The report introduces the Bioweave ecosystem concept, promoting fluid cross-sector collaboration where life sciences leaders act as connectors and co-creators of innovation within agile partner networks to sustain growth.