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After a subdued couple of years, biotech mergers and acquisitions (M&A) activity is showing renewed signs of life in 2025 — and ASX-listed players may be poised to benefit. Globally, dealmaking is being driven by looming patent cliffs, a renewed appetite for pipeline expansion, and a shift toward later-stage assets that can deliver near-term value. The rebound is not just about volume, but about strategic focus, with buyers seeking assets that can deliver clinical or commercial impact within tight timeframes.
According to a recent analysis by McKinsey & Company, external innovation has become the dominant source of new drug revenues. Since 2018, more than 70% of revenue from newly approved molecular entities has come from products sourced externally — through acquisitions, licensing deals, or strategic partnerships. This underscores how reliant major pharmaceutical companies have become on biotech innovators to fill their pipelines, especially as internal R&D productivity continues to lag.
Momentum builds across the sector
The period from March through June saw dozens of biotech acquisitions announced globally, totalling tens of billions of dollars in deal value. Major players like Sanofi, Merck KGaA, AstraZeneca, and GSK executed multibillion-dollar deals targeting oncology, immunology, and rare diseases — therapeutic areas that continue to dominate the M&A landscape.
Big Pharma’s deal capacity is estimated at more than $1.5 trillion, and companies facing patent expiries are actively seeking late-stage assets to shore up their pipelines. Notably, the average premium paid for public biotech acquisitions rose sharply in Q2 2025 — from a median of 56% to 112% — indicating growing buyer confidence and a more competitive deal environment.
This resurgence is not limited to megamergers. A wave of “tuck-in” acquisitions and strategic partnerships is sweeping through the sector, targeting emerging biotechs with differentiated platforms and de-risked assets.
Global drivers, local tailwinds
The broader M&A environment has been buoyed by falling interest rates, improved sentiment, and a rush to close deals before new merger laws take effect in 2026. Biotech is increasingly part of this momentum. Private equity firms are showing growing interest in mid-sized Australian healthcare and biotech companies, drawn by their innovation potential, relatively low valuations, and global scalability.
This mirrors global trends, where PE involvement in biotech has evolved from passive investment to active dealmaking — including acquisitions of clinical-stage companies and the formation of roll-up strategies around niche therapeutic areas. Areas intersecting with AI, such as drug discovery platforms and biomarker analytics, are particularly attractive, offering data-driven scalability and cross-sector synergies.
ASX biotechs signal strategic intent
In addition to eyeing potential M&A deals, many small and mid-cap biotechs are engaging in other forms of strategic dealmaking that reflect the same underlying drivers: pipeline expansion, platform diversification, and positioning for commercial scale. These partnerships, licensing arrangements and co-development deals can serve as precursors to M&A — or as alternatives that achieve similar goals with less capital risk.
Percheron Therapeutics Ltd (ASX:PER, OTC:PERCF), for example, recently acquired global rights to HMBD-002, a monoclonal antibody targeting the VISTA checkpoint — a move that expands its immuno-oncology pipeline and signals a willingness to pursue external innovation.
Read more: Pitt Street Research sees upside in Percheron Therapeutics as it pivots to immuno-oncology
Tryptamine Therapeutics Ltd (ASX:TYP, OTC:TYPTF) has entered a co-development partnership with Imperial College London to build an EEG-based biomarker platform for its psychedelic therapy — a collaboration that could evolve into broader licensing or acquisition opportunities.
Read more: Tryptamine secures $2.6 million R&D facility to accelerate psilocin program
Other companies, such as Imugene Ltd (ASX:IMU, OTC:IUGNF) and Prescient Therapeutics Ltd (ASX:PTX, OTC:PSTTF), have flagged interest in bolt-on acquisitions or strategic partnerships to complement their existing platforms.
Looking ahead
For ASX biotechs, the M&A rebound presents both opportunity and challenge. Companies with strong IP, clinical data, and scalable platforms may find themselves in the spotlight — whether as targets, acquirers, or collaborators.
As global dealmaking accelerates, local players are clearly attuned to the shifting landscape. Through acquisitions, partnerships and licensing, the sector is demonstrating a readiness to engage — and a growing confidence in its ability to compete on the world stage.
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