This week on InnovationRx, we discuss trends in biotech mergers and acquisitions, the emergence of India’s Anthem Biosciences, and other developments.
HHealthcare M&A is on the rise. In the first quarter of 2026, the pharmaceutical sector saw deal values hit $65 billion, marking the highest levels since 2020, with 16 transactions exceeding $1 billion. The information comes from a report by PwC.
One significant factor behind this trend is the impending patent expirations for major drugs like Merck’s Keytruda and Bristol-Myers Squibb’s Opdivo. This is likely impacting profits, driving companies to seek acquisitions. Many of this year’s deals—like Gilead’s $8.2 billion purchase of Arcelix, Lilly’s $7.8 billion acquisition of Cantesa Pharmaceuticals, and Merck’s $6.7 billion deal for Turns Pharmaceuticals—are focusing on next-generation therapies, which are expected to retain their patents for longer periods.
Even with political hurdles, large pharmaceutical firms are racing to secure treatments from China, as local biotech firms transition from being imitators to innovators. The report suggests that these firms are searching for groundbreaking therapies in areas like oncology, immunology, and metabolic diseases. Additionally, these larger companies often find better terms with Chinese startups compared to their Western counterparts.
Looking ahead, it’s anticipated that M&A activity will continue to grow in the next six months. Big pharma has both the motivation to acquire new assets and the opportunity, as many biotech companies may be more willing to sell, given the tight IPO climate.
○20 years in biopharma Ajay Bhardwaj, the founder of Anthem Biosciences, started at Biocon, eventually becoming a prominent member of its senior management. After not receiving a promotion, he opted to leave. In 2006, with two children approaching college age, Bhardwaj invested all his savings into Anthem Biosciences. The firm offers outsourcing services throughout drug development.
His timing was strategic. As drug development costs rise and success rates fall, pharmaceutical companies are increasingly outsourcing to cut down time and expenses. According to a report commissioned by Anthem, only one in about 10,000 to 15,000 compounds receives FDA approval during preclinical testing, and the average time from drug inception to market now exceeds 13 years, far longer than in the 1970s. U.S. companies outsourcing to Indian firms can save significantly—around 75% in R&D and 55% in manufacturing costs.
Bhardwaj financed his $9 million investment by selling a portion of his Biocon shares and taking out a bank loan, leading to substantial profits. Today, Anthem is a leading player in its field in India, boasting a market cap of $4.5 billion. Following its IPO planned for July 2025, Bhardwaj made Forbes’ billionaire list with a worth of $2.4 billion.
He is now setting ambitious goals to expand sales to $1 billion, including plans for a new factory near Bangalore, a target analysts believe is achievable within about seven years.
What We Are Reading
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A recent federal report indicates that major Medicare insurers are often denying requests for nursing home stays.
Otsuka has acquired Transcend Therapeutics, a biotechnology company specializing in psychiatric treatment, for $700 million.
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