July 17, 2026
Lexpert sat down with partner and co-head of the M&A practice John Emanoilidis and partner and co-leader of the Intellectual Property and Food and Drug practices Teresa Reguly in its Special Edition on Health Science. In this issue they discussed trends shaping healthcare M&A, including rising deal values, the patent cliff, and the growing role of AI.
John noted that total deal value in healthcare M&A has increased significantly from approximately $4.5 billion in 2023 to more than $12 billion in 2025, driven primarily by larger pharmaceutical and biotechnology transactions.
“What changed was the size of transactions,” he said.
“Biotech and pharmaceutical transactions are leading by deal value, while healthcare facilities and services account for the greatest number of deals.”
Dealmaking in this sector continues to be shaped by both upcoming patent expiries and the corresponding risk of declining revenues.
“Pharma M&A is fundamentally driven by innovation and urgency,” he explained.
“Companies are facing significant revenue exposure from patent expiries and are looking to acquire revenue-generating or near-commercial assets.”
Competition for high-value assets remains strong, particularly in therapeutic areas with limited pipelines and extended development schedules. Increasingly, buyers are responding with disciplined valuation strategies and structured bidding processes.
Teresa went on to note that the patent cliff is still a leading driver in healthcare M&A, even as pharmaceutical innovation has shifted toward biologics, precision medicines and other specialized therapies that require greater investment and longer development timelines.
“These products take longer to develop, require more investment, and often reach the market with less remaining patent life,” she said.
The result is a more selective market, where fewer assets are available, but those that do come to market often attract significant attention and premium valuations.
Against this backdrop, intellectual property and regulatory diligence have become increasingly important, particularly with respect to exclusivity periods and data protection regimes.
Read: US obtains largest penalty for evading HSR premerger notification requirements
AI is also reshaping transaction assessments. John explained that technology is rarely evaluated in isolation. Instead, buyers focus on the interaction between AI capabilities, proprietary datasets and commercial applications.
“The real value comes from the combination of AI, data and commercial application,” he said.
“Buyers want to know whether the technology can improve outcomes, create efficiencies or generate new revenue streams.”
He added that the most compelling opportunities tend to be those where AI has already been integrated into proven clinical or operational workflows, rather than early-stage technologies.
As AI becomes more prevalent, it is broadening the scope of intellectual property diligence. While patents continue to play an important role, buyers are increasingly examining data rights, consent structures and governance frameworks that support AI-enabled technologies.
“The key question is whether the company has access to a proprietary, legally compliant dataset that can support the technology,” Teresa said.
Looking ahead, healthcare M&A continues to require a multidisciplinary approach. Corporate deal teams must work closely with regulatory, intellectual property, privacy and technology specialists to properly assess risk and identify potential issues before completing a transaction.
“Together, they assess compliance risks, data governance frameworks, ownership issues and regulatory requirements,” John said.
You can read more about our Life Sciences work on our practice page.
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