Following an uneventful 2024, the slowdown in deal activity in the life sciences sector continued in 2025 as persistent macroeconomic headwinds, heightened geopolitical tensions and shifts in US healthcare policy discouraged companies from signing M&A,licensing and collaborative R&D deals over the course of the year. M&A activity continued its decline from 2024 to 2025 as elevated interest rates and regulatory uncertainty kept deal volumes down. However, in contrast, aggregate spending on M&A surged by 99% to US$257 B, with nine acquisitions exceeding the US$10 B mark.

Licensing deal flow for life science companies remained sluggish in 2025 as licensees continued to be selective in the types of assets they in-licensed to their already streamlined portfolios. Similar to 2024, clinical stage deals accounted for a greater proportion of therapeutic licensing activity in 2025 as risk averse companies looked to invest in products with established clinical and commercialization pathways. Aggregate licensing deal spend was particularly upbeat compared to previous years, amounting to US$205.3 B, while the average and median deal values also surged thanks to risk-mitigating deal structures involving high option-based and milestone payments. After dropping in 2024, average upfront payments increased by 48% in 2025, far exceeding the average upfronts seen in 2021 when licensing deal activity peaked, as companies demonstrated willingness to commit large sums of biodollars to promising or de-risked late-stage assets.

Roche was the leading pharmaceutical dealmaker in terms of deal volume in 2025, while Novartis committed to the highest total deal spend. By deal volume, oncology was once again the leading therapeutic area for partnering deals, but dealmaking in over half of the therapy areas was suppressed relative to 2024. Continuing the downward trend, collaborative R&D activity diminished further in 2025 as key players in the life sciences sector invested significant amounts of biodollars solely in therapies and technologies that offered essential growth opportunities.