Strategic forecast: M&A activity set to surge amid looming patent cliffs

With over $300 billion in branded drug sales at risk from upcoming patent expiries, the life sciences sector is poised for a wave of strategic mergers and acquisitions - particularly in oncology, immunology, and rare diseases.

As we move into 2026, the pressure to replenish pipelines is intensifying. Blockbuster drugs across multiple therapeutic areas are approaching patent cliffs, exposing major pharmaceutical companies to revenue erosion and competitive threats from biosimilars. In response, we expect a marked acceleration in M&A activity, with dealmaking focused on high-growth, high-value targets.

From a legal and regulatory standpoint, this shift presents both opportunity and complexity.

Therapeutic hotspots: Oncology, immunology, rare disease

Recent transactions - such as Pfizer’s $43B acquisition of Seagen and Amgen’s $28B purchase of Horizon Therapeutics - signal a clear strategic pivot toward oncology and rare autoimmune conditions. These areas offer:

• Strong clinical pipelines
• Favourable pricing dynamics
• Lower biosimilar penetration risk
• High unmet medical need.

Immunology, in particular, is projected to grow at a CAGR of 13.6% through 2030, while oncology continues to dominate global R&D investment. Expect further acquisitions targeting T-cell engagers, antibody-drug conjugates, and gene therapies.

Legal considerations: Due diligence, IP, and competition

As deal volume increases, legal teams will face heightened scrutiny across several fronts:

• IP due diligence: With AI increasingly involved in drug discovery, assessing the strength and ownership of patents - especially around inventorship - is critical.
• Regulatory risk: Cross-border deals must navigate divergent frameworks, particularly around AI-enabled diagnostics and digital therapeutics.
• Competition law: Consolidation in niche therapeutic areas may trigger CMA or EC review, especially where market dominance is a concern.
• Licensing and collaboration agreements: Legacy contracts may contain change-of-control clauses or royalty triggers that complicate integration.

Early legal engagement is essential to identify red flags, structure clean exits, and preserve asset value.

Strategic implications for life sciences companies

For mid-sized biotechs and emerging innovators, this environment presents a window of opportunity. Companies with differentiated platforms, orphan drug designations, or strong Phase II/III data may become prime acquisition targets.

To maximise strategic positioning, firms should:

• Audit IP portfolios and clarify ownership of AI-generated assets
• Strengthen regulatory pathways to support multi-jurisdictional approvals
• Review commercial contracts for M&A-sensitive provisions
• Engage legal counsel early to prepare for diligence and valuation discussions.

Conclusion: Prepare for a deal-driven future

The next 12–24 months will likely see a surge in life sciences M&A, driven by patent cliffs, pipeline gaps, and investor pressure. Oncology, immunology, and rare diseases will remain focal points - but legal readiness will be the differentiator.

For the life sciences community, now is the time to plan, position, and protect. Strategic foresight and legal precision will be key to navigating the next wave of consolidation.