Are M&A buyers ready to spend more on earlier-stage deals? A Perspective

For years, most substantial M&A deals in the biotech field have centered on de-risked, later-stage products. Since the market downturn in 2022, nearly all of the sector’s billion-dollar takeouts have been for late-stage or marketed products, most typically fitting into pharma pipelines alongside more established products, and often timed to generate sales that will replace those lost to patent expirations.

But that might be changing. A handful of recent transactions, including a record-setting deal in mid-November, appear to show an appetite for assets, pipelines and platforms at an earlier stage. Collectively, they may signal that biopharmas are ready to take on more risk — at the 10-figure price level — amid rising valuations and a warming trend in the sector...