Follow the Science, Follow the Money:
Pharma’s Q3 Dealmaking and Investment
The first quarter of the year got off to a predictably shaky start for a biopharma market which is marked by increasing uncertainty and turmoil. Huge cuts at the FDA, coupled with the will-they/won’t-they situation on tariffs for pharmaceutical...
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Has dealmaking peaked, or is the market just catching its breath?
Are public investors still willing to back new issuers, and at what price?
Who is funding early-stage science, and what do those backers expect when it is time to exit?
And is China now the default source of the next wave of innovation, and what are Western buyers prepared to pay for it?
Has dealmaking peaked, or is the market just catching its breath? Are public investors still willing to back new issuers, and at what price? Who is funding early-stage science, and what do those backers expect when it is time to exit? And is China now the default source of the next wave of innovation, and what are Western buyers prepared to pay for it?
These are the questions we hear most as 2026 draws to a close, and the third quarter gives the clearest evidence yet of how to answer them.
The headline numbers show a market that has cooled but remains active. Acquisition value fell by more than half from a record second quarter to $35.4bn, yet it still sits almost 19% above the average since 2021. Public markets have become more selective.
First-day gains for this year's new issuers have averaged 27.5%, but 14 of the 24 were trading below their offer price in mid-October, and the sharp pullback in the XBI over the past month has made investors more cautious. Private funding is only $1.1bn short of last year's full-year total, but the money is moving toward mid-sized financings that bridge companies to their next value inflection point.
Beneath those totals, the sources of value are changing. China is the clearest example. Six of the quarter's 10 largest licensing deals involved Chinese companies, double the number a year earlier, and each was struck with a different partner.
Western buyers are drawing on the breadth of Chinese innovation, while the 10 largest deals are worth far less in aggregate than a year ago. Those shifts show where competition for assets is tightening and where pricing may be moving.
In this eBook, Scrip's analysts draw on Q3 data from Evaluate Pharma to help you test your own assumptions. You will see who is buying, who is sitting out and how deal sizes are distributed.
You will see how quickly China's role in high-value licensing is growing, which companies are driving it and what rights Western buyers are securing.
You will see why smaller IPOs and weaker aftermarket trading may be an early signal for the exit window. And you will see how venture investors are rebalancing their portfolios as exit options improve.
As you shape your strategy for 2027, we hope this analysis informs the questions you ask and the decisions that follow.
