This week’s InnovationRx delves into biotech M&A, the emergence of India’s Anthem Biosciences, and more. To receive it directly in your inbox, subscribe here.
Pharmaceutical M&A reached $65 billion in the first quarter, its highest number since 2020, according to new data from PwC.
getty
Healthcare mergers and acquisitions are on the rise. The pharmaceutical industry recorded $65 billion in deals during the first quarter of 2026, marking the highest level since 2020, with 16 transactions exceeding $1 billion, as reported by new data from accounting giant PwC.
A primary driver of these transactions is the impending expiration of patents for major drugs, such as Merck’s Keytruda and Bristol Myers Squibb’s Opdivo, which threaten to reduce pharmaceutical companies’ revenue. To address this challenge, many firms are acquiring businesses with next-generation modalities, which promise extended patent protections. This includes Gilead’s $8.2 billion purchase of cancer biotech Arcelix, Lilly’s $7.8 billion acquisition of Cantesa Pharmaceuticals, focused on neurology, and Merck’s $6.7 billion deal with oncology startup Terns Pharmaceuticals.
Despite facing political resistance, large pharmaceutical companies continue to license therapies from China, as the country’s biotech sector transitions from imitation to innovation. According to the report, companies are turning to China for groundbreaking molecules in fields like oncology, immunology, and metabolic disease. Additionally, Chinese startups offer more favorable deal terms compared to their American and European counterparts.
The next six months are expected to see continued M&A activity. The tight IPO window, which mainly favors startups with advanced-stage drugs, is prompting more biotech companies to consider selling.
Anthem Biosciences founder Ajay Bhardwaj
HARSHITH DAMBEKODI FOR FORBES ASIA
Over his two-decade tenure at the Indian biopharmaceutical firm Biocon, Ajay Bhardwaj advanced to a senior management role, overseeing marketing under the guidance of Kiran Mazumdar-Shaw, Biocon’s founder and a trailblazer in Indian biotech.
After being overlooked for a promotion, Bhardwaj, at the age of 46 and with two children to support through university, invested all his savings into founding Anthem Biosciences in 2006. This company provides outsourcing services for all stages of drug development. Reflecting on this decision, Bhardwaj described it as a “huge gamble” during a March interview at the company’s headquarters near Bangalore.
The timing was advantageous. Facing escalating costs and dwindling success rates for new drug development, pharmaceutical companies increasingly turned to outsourcing as a cost-efficient strategy to expedite the process. An Anthem-commissioned 2024 report by Frost & Sullivan indicates that only one in 10,000 to 15,000 compounds in preclinical trials achieve FDA approval, while the development timeline has more than doubled to over 13 years since the 1970s. Outsourcing to Indian firms can reduce R&D costs by 75% and manufacturing costs by 55% for American pharmaceutical companies.
Bhardwaj’s $9 million investment, financed by selling his 1% stake in Biocon and securing a bank loan, has yielded significant returns. Anthem is now one of India’s most valued public companies in the sector, with a recent market valuation of $4.5 billion. Its July 2025 IPO earned Bhardwaj a spot on Forbes’ Billionaires list, with a net worth of $2.4 billion.
Looking ahead, Bhardwaj plans to expand by allocating funds for a new factory near Bangalore, aiming to nearly quintuple sales to $1 billion. Analysts predict this target could be achieved in approximately seven years.
Read more here.
What We’re Reading
Companies are enhancing IVF benefits, and this trend is likely to persist given the national focus on birth rates.
The White House seeks to increase the number of doctors, yet its immigration policies serve as a barrier.
There is a debate among fertility specialists and bioethicists over a new method for precise gene editing in human embryos and whether it will result in medical cures or designer babies.
Federal reports indicate that large Medicare insurers frequently deny requests for nursing-home stays,.
Otsuka acquired the psychiatric treatment biotech firm Transcend Therapeutics for $700 million.
More From Forbes
