In October, biotech stocks had fallen significantly from their peak during the Covid pandemic.

Big pharma companies have recently started acquiring biotech companies, a trend that has accelerated during J.P. Morgan's annual healthcare conference.

Merck is set to acquire Harpoon Therapeutics for $680 million, and Johnson & Johnson will purchase Ambrx Biopharma for $2 billion.

Analysts have listed potential acquisition targets like Immunocore, Syndax Pharmaceuticals, and Blueprint Medicines.

These potential targets have shown promising results in clinical trials and have attractive drug portfolios.

Analysts also see potential for acquisitions in companies developing drugs that regulate metabolism, such as Madrigal Pharmaceuticals and Viking Therapeutics.

There is a predicted continued momentum in biotech M&A activity driven by the increasing valuations of innovative companies addressing areas of high unmet need.