After several years of muted activity, public markets are beginning to reopen to biotech companies.

But according to JPMorgan’s top healthcare dealmakers, the strongest companies may still be more likely to sell out to Big Pharma rather than test investor appetite through an IPO.

The IPO window for high-quality biotech companies has reopened, but investors are far pickier than during the pandemic-era boom, say Juha Anjala and Roy Wouters, co-chief executives of JPMorgan’s EMEA Healthcare Investment Banking, said CNBC.

The current market is also prompting many biotech companies to pursue a two-pronged process: preparing for an IPO while working with potential buyers.

In some cases, companies are willing to go public only to be acquired by big pharmaceutical companies before hitting the public market, Wouters said, adding that they have advised on several such deals recently.

The trend reflects a broader recovery in healthcare deals, particularly in biopharma, where drugmakers are under pressure to fill their pipelines before major patent expirations later this decade and into the early 2030s.

Big pharmaceutical buyers are well-financed and increasingly willing to make larger bets, the bankers said. Strategic buyers are “out there looking to deploy capital” to deepen their pipelines, while shareholders are increasingly supporting mergers and acquisitions as a way to drive growth, Anjala said.

“We’re seeing people take a more thoughtful view and only really want to support the company that’s going to be best in class and first.”

Roy Wouters

Co-Head of EMEA Healthcare Investment Banking at JPMorgan

The result is a more competitive market for the highest quality biotech assets, particularly those with differentiated technology or exposure to large therapeutic areas such as oncology, metabolic diseases and infectious diseases.

This creates a stronger exit market for biotech founders and investors than it did a year or two ago – but not necessarily an easy one. As the IPO window opens, Big Pharma’s hunt for growth is expected to continue to set the pace.

Competition and bifurcation

Still, Anjala and Wouters warned that the recovery does not necessarily have to be broad-based. Boards of directors and investment committees scrutinize deals before approving them, and private capital is becoming increasingly concentrated.

“We’re seeing people take a more thoughtful view and only really want to support the company that’s going to be best in class and first in class,” Wouters said.

The current environment “provides these companies with a number of options that they didn’t have on the IPO side or necessarily on the M&A side even a year or two ago,” he added.

This represents a departure from the easy-money period of 2020 and 2021, when investors were willing to back multiple companies that had similar goals or technologies. Today, capital flows more selectively to companies that are considered industry leaders.

“Buying things like they’re going out of fashion”: Biotech M&A on track for best year since before Corona

In a report released last week, EY said 38% of new drug approvals in 2025 were for first-in-class products. The company also said the biotech sector is regaining momentum despite headwinds such as cost pressures and looming patent cliffs.

According to EY, these pressures are pushing companies toward new financing models, including licensing arrangements for pre-IPO assets and other innovative contract structures.

Bigger offers

The contract values ​​and advance payments would also increase, said Wouters. This reflects confidence in the target market, the quality of the asset and the level of competition among buyers.

“People are just willing to put more capital at risk upfront.” [payment] because they have to, because of the competition for these assets,” he said.

According to JPMorgan, there were seven biopharma deals in 2025 worth between $5 billion and $15 billion. Nearly halfway through 2026, there have already been six deals of this size, suggesting that this year’s execution rate could surpass last year’s.

Many of the industry’s most commercially successful drugs come from acquisitions or licensing agreements rather than internal research and development. This illustrates why pharmaceutical companies continue to use mergers and acquisitions to complement their portfolios.

Shareholders also urged management teams to do more deals, Anjala said, as cash flows remained strong and mergers and acquisitions were seen as a proven path to value creation. The tailwind is particularly strong for strategic acquisitions that could deepen pipelines or bring synergies, he added.

Major pharmaceutical companies, including GSK And Novartishave long emphasized a preference for so-called bolt-on deals – acquisitions in the low single-digit billion dollar range that complement existing portfolios without changing the entire company.

However, some recent transactions show a willingness to achieve higher prices on senior assets. GSK recently agreed to buy US oncology biotech company Nuvalent for $10.6 billion, a deal that represents a major foray into cancer treatment and a departure from more typical smaller add-on deals.

China is also becoming an increasingly important force in global biotechnology. EY noted that Chinese companies now represent a viable alternative to US and European biotech hubs, while Wouters said innovation and capital flows continue to gain momentum in China.

“In recent years it has always been said: the signs are good, the grass is sprouting, next year is going to be a great year,” Wouters told CNBC. “It actually looks like this year could be a great year.”

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