Healthcare and life sciences deal activity to accelerate across global markets in 2026
Strategic imperatives, artificial intelligence integration and regulatory evolution reshaped pharmaceutical dealmaking as the sector emerges from its reset phase
While the headline numbers showed a decline in volumes and values in healthcare and life sciences sector transactions in the first half of 2025, this is not the full picture. Healthcare services deal values rose by about 50% even as volumes fell. Europe, the Middle East and Africa (EMEA) gained market share as the Americas contracted.
The life sciences sector experienced a cautious but determined recovery later in 2025, following what industry experts characterised as a "reset year" in 2024. Total deal counts in the sector grew only modestly, as regulatory policy uncertainty continued to weigh on healthcare dealmaking activity. However, globally, deal value increased more significantly, as there were fewer but larger deals in both healthcare technology and pharmaceuticals.
The sector has been more downturn-resistant than sectors such as retail and manufacturing, thanks to its recurring revenue base – but it has not been as competitive as the high-growth technology sector.
Venture investment in biotechnology declined in Europe in 2025, with investors taking an increasingly selective and cautious approach to investment. Later stage rounds accounted for the majority of funds raised. Investment in the United States grew, mainly thanks to a small number of large deals. Tranched investments, milestone-based drawdowns, performance ratchets and protective provisions have been popular, as investors price execution risk while public exits remain limited.
Public markets remain volatile, but biotechnology initial public offerings increased slightly in 2025. Secondary financings also grew modestly, showing a small upturn in the market.
Client success story
Osborne Clarke advised Grifols S.A., a global healthcare and pharmaceutical company, on the conclusion of a delisting agreement with Biotest AG in connection with a public delisting offer launched by Grifols Biotest Holdings GmbH, a wholly owned subsidiary of Grifols. Biotest is a specialist provider of biological drugs derived from human plasma with a value chain spanning preclinical and clinical development through to global marketing, focusing on clinical immunology, haematology, and intensive and emergency medicine.
The transaction related to the delisting of Biotest shares from the regulated market of the Frankfurt Stock Exchange. Grifols Biotest Holdings published its public delisting tender offer to all Biotest shareholders to acquire their shares against payment of a cash consideration of €43.00 per ordinary share and €30.00 per preference share. The application for revocation of the admission of Biotest shares to trading on the regulated market of the Frankfurt Stock Exchange was granted and the delisting tender offer was settled in June 2025.
Osborne Clarke’s cross-border team was led by Dr Fabian Christoph and included specialists in M&A, corporate and finance from Germany and Spain. US legal support came from Proskauer Rose LLP.
Market dynamics shape areas of growth
Healthcare transactions drive valuations
Healthcare transactions have seen healthy valuations, often with double-digit EBITDA multiples, demonstrating investor confidence in the long-term outlook. Certain larger transactions involving artificial intelligence reached multiples of more than 30 times EBITDA.
The vast majority of deals were made by strategic buyers: with digital health, medical devices, medical technology, artificial intelligence, home care and hospices driving the most investment.
Life sciences activity spans multiple sectors
Dealmaking in the sector covered a range of activities including royalty acquisitions, clinical research services, portfolio optimisation, platform acquisitions and pipeline-focused transactions. The market saw a balanced mix of pharmaceutical companies and financial investors as buyers, with multiple royalty purchases and targeted acquisitions aimed at strengthening drug development and manufacturing capabilities. EBITDA multiples remained in double digits on average, but well below recent peaks, reflecting an uncertainty discount, and frequently factoring in contingent consideration.
Life sciences activity has continued to concentrate in specific areas such as cell and gene therapy, oncology, messenger ribonucleic acid (mRNA) science, immunology, autoimmune, respiratory and kidney, metabolic disease and rare diseases.
Cross-border dynamics shift investment flows
US corporate acquirers (strategics) and private equity firms (sponsors) remain the key buyers globally, but the geography is shifting. The Americas saw large declines in volume and value in the first half of 2025, with EMEA gaining share. US buyers are active in European consumer health, artificial intelligence and diagnostics and specialty therapeutics, while tariffs and drug-pricing policy are feeding scenario-based valuation models.
The UK has lost some competitive standing due to its relatively low allocation of healthcare budgets to medicines. However, it is a leader in artificial intelligence and data infrastructure which enables it to continue to attract foreign investment for biotechnology, digital health and life sciences start-ups.
Several sovereign wealth funds, particularly from the Gulf region, have invested heavily in life sciences companies, though there remains continued reliance on US investors for larger investment rounds.
Strategic imperatives drive dealmaking activity
The fundamental drivers behind increased life sciences mergers and acquisitions activity in 2025 were both urgent and structural. Approximately two-thirds of revenue growth in big pharma now comes from dealmaking, undertaken to balance out the huge losses of revenues from patent expiries this year and in the following couple of years. This indicates that dealmaking is set to remain key to growth.
Demographic crisis drives innovation demand
The demographic crisis is creating unprecedented demand for healthcare innovation. Nearly 30% of Europe's population will be over 65 by 2050 (up from 20% in 2023). This demographic shift is increasing age-related diseases and straining healthcare resources. Simultaneously, there is an estimated shortage of 1.2 million doctors across Europe, creating urgent needs for technological solutions and operational efficiency.
Policy tailwinds support investment
After a year of higher rates and tight credit, banks are back and rate expectations have eased. In Europe, policy is channelling capital into medical technology and digitalisation. The European Health Data Space is part of the EU's Digital Decade investments programme, which is channelling billions into the digital health infrastructure. This creates a more attractive investment environment by establishing common standards and interoperability frameworks across EU Member States, reducing the fragmentation that has historically made European health technology investments more complex than necessary.
Companies that can demonstrate European Health Data Space-compliant data architectures and interoperability become more valuable acquisition targets, as they are positioned to serve the entire EU market rather than individual national markets. The EU Critical Medicines Act supports local manufacturing, again making those manufacturers attractive targets.
Key investment themes emerge
- Healthcare consumerism: Growing consumer focus on wellness, vitamins and supplements creates attractive private equity opportunities. 2025 saw increased activity in services (contract research organisations, contract development and manufacturing organisations, diagnostics and laboratories, imaging, outpatient clinics) and profitable medical technology and consumables.
- Consolidation in specialist care: Private equity continues to buy and combine home health, hospice and behavioural health providers. These often factor in buy-and-build strategies where markets are fragmented. Care homes, fertility, animal health, aesthetics practitioners, dental practices and optical clinician practices are also seeing consolidation. However, regulators are increasingly concerned about whether these acquisitions harm quality and access. Operational due diligence is key for acquisitions of healthcare providers, scrutinising data, quality of care, management teams and locations, compliance and use of technology.
- Obesity and diabetes treatment: New weight-loss and diabetes medications are driving significant investment and mergers and acquisitions activity, representing a transformative therapeutic area that is reshaping pharmaceutical portfolios. The growth of glucagon-like peptide-1 (GLP-1) use will continue to affect the future of pharmaceuticals and accordingly this is a key area of focus. Research into these medications is advancing rapidly, examining both immediate and longer-term impacts as well as potential uses beyond obesity and diabetes management. These drugs may prove effective for treating a wider range of conditions, including sleep apnoea, heart disease, kidney problems, Alzheimer's and potentially Parkinson's. However, the World Health Organization has called for affordable generic versions of these drugs, which could drive down product values. This uncertainty could influence the appeal of investments in these treatments in the medium term.
- Artificial intelligence integration: Artificial intelligence platforms in drug discovery, clinical development, imaging and diagnostics are no longer optional. In biopharmaceuticals, artificial intelligence is reshaping drug discovery, trial optimisation and diagnostics. In medical technology, artificial intelligence spans imaging, surgical robotics and virtual care. Approvals of artificial intelligence-powered medical devices have reached record levels, creating acquisition opportunities for platforms that enable automation and interoperability. Beyond artificial intelligence, buyers are also targeting analytics, telehealth and remote-monitoring companies that reduce costs and enable growth.
Complex challenges require navigation
The convergence of regulatory change, technological innovation and geopolitical uncertainty has created a uniquely challenging environment for life sciences and healthcare transactions. Navigating this landscape demands a sophisticated understanding of the multiple pressure points that can affect deal timelines, valuations and ultimate success.
2026 forecast points to sustained growth
We anticipate modest growth in 2026. As valuation confidence returns, select mega-deals may reappear, but regulatory and tariff uncertainty will keep many boards preferring programmatic scale-ups.
With exit clocks ticking and fundraising pressures mounting, 2026 should see a fuller private equity return: sponsor-to-sponsor trades, carve-outs from corporates optimising portfolios, and platform roll-ups in doctor practices, pharmaceutical services and technology-enabled care.
Success in 2026 will favour those who marry ambition with discipline: rigorous scenario planning, early regulatory engagement, sophisticated data and AI governance, and integration strategies that preserve innovative cultures while delivering operational efficiencies.
Speak to one of our experts.
Our experts
Co-head International Corporate Group, Partner, UK
Knowledge Lawyer Director, UK
Co-head International Corporate Group, Partner, Germany
Head of Business Transactions Knowledge, UK
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