Lilly, Gilead lead $64bn pharma M&A run as 2026 deal pace eclipses 2025

Four months in. Twenty-four deals. Sixty-four billion dollars in upfront cash on the table, against twenty-four and a half last year. Pharma M&A is running well ahead of 2025’s pace, and Eli Lilly and Gilead Sciences are doing most of the heavy lifting. Oncology and autoimmune assets are where the money is going, per a tally PharmaVoice ran Wednesday.

The 2025 comparison: 14 deals, $24.5 billion. So that’s 71 per cent more deals year-over-year and 161 per cent more committed cash. The biggest single transaction is Sun Pharma’s $11.75 billion takeover of Organon, which also happens to be the largest pharma deal ever struck by an India-based acquirer.

Through 2024 and most of 2025, boards were sitting on cash. The reasons were political: nobody knew where the Trump administration would land on antitrust, on drug-pricing executive orders, on FTC scrutiny of biotech tie-ups. By early 2026 those questions had answers. The answers, mostly, were “go ahead.” Lilly’s $10.8 billion run across three deals is funded by the GLP-1 cash machine. Gilead’s three transactions add up to $12.7 billion. That puts Gilead first on the league table, narrowly ahead of Lilly.

Where the money has gone

Cancer assets, mostly. Of the $64 billion in 2026 upfronts, roughly $25.4 billion has gone to oncology. Autoimmune accounts for $12.7 billion. Central-nervous-system programmes, $11.3 billion. Add the latter two together and oncology still wins by $1.4 billion.

Gilead bought Arcellx, a CAR-T developer with a multiple-myeloma cell therapy that was already in late-stage trials. Merck added Terns Pharmaceuticals, picking up a candidate aimed at Philadelphia-chromosome-positive chronic myeloid leukaemia. The Merck deal has a clear strategic logic: cushion the Keytruda cliff. The PD-1 blockbuster is forecast to peak at roughly $32 billion in sales this year before generic competition arrives later in the decade.

Autoimmune is the secondary battleground, and the bidding pattern there is different. UCB bought Candid Therapeutics for a bispecific antibody platform. Biogen acquired Apellis Pharmaceuticals to fold the company’s complement-pathway portfolio into a wider immunology pipeline. Bankers, in private conversations, describe the pivot as deliberate. Oncology auctions have got crowded. Autoimmune biology offers longer pricing power because payers are typically less aggressive on step-edits, and chronic-disease therapies produce longer revenue tails.

Why now

The clock, basically. An estimated $300 billion of branded pharma revenue is exposed to patent expiry by 2030. That number sits on every pharma CFO’s whiteboard. Pipelines that don’t refill in time will hit the cliff at full speed, and internal R&D timelines, eight to 12 years from target identification to approval, are too slow. M&A telescopes that to two or three years. Phase 2 and phase 3 programmes available on the open market are the cheapest path to refill in 2026.

Lilly’s chequebook reflects the calculus exactly. The GLP-1 portfolio (Mounjaro, Zepbound) is producing cash flow at a scale Lilly hasn’t previously had to deploy. The $10.8 billion in 2026 upfronts has gone to bolt-on assets across CNS, immunology and metabolic medicine. Centessa Pharmaceuticals, a CNS-focused biotech Lilly bought earlier this year, is the headline pick of the bunch. The strategic read, per multiple sell-side notes, is that Lilly is building a hedge against eventual GLP-1 maturation. Analysts at multiple firms expect the incretin class to plateau before the end of the decade, as next-generation oral and combination products from competitors hit the market.

Gilead’s strategy has tilted differently. The Foster City group’s three 2026 transactions skew toward oncology and infectious disease, beats where it has historical strength but where the post-Veklury revenue mix has been under pressure. Arcellx is the marquee buy. The deal hands Gilead a CAR-T platform that complements Yescarta and Tecartus, the two cell therapies Gilead inherited from the 2017 Kite Pharma acquisition. Combined, the cell-therapy franchise gives Gilead a credible runway in haematologic malignancies right as the HIV business faces generic competition on the Biktarvy backbone later in the decade.

What buyers want next

Three patterns, per bankers covering the sector. Mid-cap biotechs with single-asset late-stage programmes are getting bid up first, often before sell-side processes formally launch. Bispecifics and antibody-drug conjugates command the largest premiums because available supply is thin relative to demand. Cross-border activity, of which Sun Pharma and Organon is the headline example, has resumed after a multi-year lull during which Indian and Japanese acquirers stayed on the sidelines.

Bankers cite one 2025 reference deal more than any other: Johnson & Johnson’s $14.6 billion purchase of Intra-Cellular Therapies, struck a year ago for the schizophrenia and bipolar drug Caplyta. That transaction reset CNS valuations. Mid-cap CNS auction processes now routinely start with at least four bidders, where two years ago two was the norm. The category, in other words, has been reclassified by the buy side from speculative to derisked.

What’s next

Two things sit on top of the deal pipeline. The first is interest-rate path. The Federal Reserve’s near-term cut trajectory has lowered the cost of capital for cash-financed deals. Pharma majors with investment-grade balance sheets are now pricing acquisitions against a discount rate roughly 75 basis points below where it sat in mid-2024. That has removed a brake that slowed activity through 2024. The second is FTC posture. The current administration has signalled a lighter-touch approach to therapeutic-area consolidation than the prior Khan-era doctrine, even as scrutiny of payor-PBM-pharma vertical structures has intensified.

If the run rate of the first four months holds, 2026 closes as the busiest pharma M&A year since 2019. Two deals to watch in the back half: a long-rumoured Bristol-Myers Squibb move on a mid-sized oncology platform, and the next Lilly CNS or immunology bolt-on, which bankers expect before the September quarter close. A third potential catalyst is whether Pfizer, quiet since the Seagen deal closed, returns to the buy-side now that integration is largely behind it.

The buyers’ question is no longer whether to deploy. It’s whether enough phase 3 assets remain on the open market to absorb the cash. Combined dry powder across the top ten US and European pharma names sits north of $230 billion, in cash and short-term investments, by recent 10-K and 20-F filings. Even with half of that figure parked, the remainder is plenty to keep auction rooms busy through the rest of the year.