The 2026 annual Bloom Burton & Co. Healthcare Investor Conference—Canada's premier international forum for healthcare companies and investors—was held in late April in Toronto. Keynote speaker, Eric Tokat of Centerview Partners, spoke to industry leaders on the current surge in M&A activity and what to expect in the second half of 2026. Here are highlights from his presentation, which spotlight the M&A boom underway in the sector.
Signs of a Surge
Dealmaking in life sciences has seen a rise in the last several quarters, closing in on record highs hit during the pandemic years. In 2026 YTD, biopharma M&A alone saw 14 deals totaling US$49B in value, following a record-setting US$112B in dealmaking in 2025. While COVID-era deal activity saw a slowdown as a result of macro headwinds, including the war in Ukraine, current geopolitical volatility does not appear to be adversely affecting investor appetite. Competition is intensifying in the current landscape, with 30% of deals in 2025 having more than one bidder (up from 10% in 2024)—and with some buyers even willing to forego key (i.e., phase 3) data reporting before transacting.
Another signal of strength in the dealmaking environment is the widening spectrum of treatment areas, modalities and stages of development attracting investor interest (including oncology, cardiometabolic & GLP-1, rare disease, and medtech & AI platforms). And while pharma stocks have benefited from the broader bull run in the capital markets (up 80% since last year), we are also seeing a marked rise in private M&A, accounting for approximately 40% of activity YTD in 2026.
What's Driving Deals
In what would be a $300 billion hole in revenue by 2028, patent expiries are spurring focused dealmaking by large strategics who are looking to long-term revenue sustainability, diversification and growth. As a result, the market is seeing large-cap pharmaceuticals pursuing both scale and early- and growth-stage innovators to fill their pipelines.
Other hot spots for dealmaking include investments that can support higher valuations, such as innovations targeting large population disease (cardiometabolic and high prevalence diseases). Rare disease innovation also remains consistently in focus, accounting for approximately 1/3 of dealmaking since 2020.
The life sciences ecosystem in China is another area of increasing attention from investors, with record levels of US investment in Chinese assets in the last several years as it continues to assert itself as an industry innovator. According to McKinsey, "In 2024, 28 percent of [biopharma] licensing deals executed by the top 20 multinational pharma companies involved Chinese companies, up from just 3 percent in 2020." This activity is ongoing alongside policy changes the US FDA is seeking, including policy that would foster more constructive and competitive market dynamics vis a vis China.
What's Next in Canada and Abroad?
The current rise of dealmaking in life sciences shows no signs of slowing down. Canada has emerged as a fertile hunting ground, with Lilly, GSK, Pfizer and AstraZeneca (among others) having announced Canadian biotech acquisitions in recent years. Market conditions (increasing innovation, patent cliff, risk-on capital markets environment, etc.) point to more dealmaking, both in Canada and beyond.
If you have further questions about this update or life sciences issues more generally, please contact the author or a member of the Life Sciences group.
