Trading screens in August showed the XBI index flirting with $170 a share, more than double its level from the previous summer. That run-up didn’t last. Clinical trial setbacks, higher interest rates, and election-year jitters have drained the rally. The XBI now drifts sideways, and buyers have grown wary.
Public biotech firms aren’t seeing much action on the M&A front. Instead, private startups are getting snapped up at a clip that outpaces anything seen in recent years. BioPharma Dive tracked 26 private biotech acquisitions in 2026, each worth at least $50 million. That’s more than the 21 public company deals of similar size. The backlog of startups that skipped IPOs during the drought now have clinical results to show, making them prime targets. Michael Allwin, who leads biopharma research at William Blair, says these companies “are not in a rush, and have more tools in the toolbox to be thoughtful about strategic exits.”
In the third quarter of 2026, the total announced value of biopharma M&A deals reached $39 billion across 15 transactions, with the number of deals over $1 billion already surpassing the previous annual record before year-end.
Private M&A deals have ballooned in size. William Blair’s research puts the median value of a startup buyout at $1 billion in 2026, up from $496 million in 2023. The volume of private deals has already topped the combined total from the last eight years. In the third quarter, private buyouts dominated as public company deals faded. Startups with new clinical data and time on their side are setting the terms, not scrambling for exits.
Some on Wall Street see a possible rebound for public deals. RBC Capital Markets analyst Brian Abrahams, speaking on a recent podcast, pointed out that M&A often slows from July to September, then picks up. He argued that interest rate swings haven’t derailed dealmaking in the past. A pickup in public company acquisitions could “reassure” investors and steady the sector, Abrahams said.
In 2025, there were 59 announced public deals in the life sciences sector—the highest in Sidley's database since 2018—with a significant portion exceeding $1 billion in value. This sets a broader historical context for the record public M&A activity seen in 2026.
Analysts at Cantor Fitzgerald and Raymond James both flag a more cautious mood among investors. Raymond James found that about half of investors expect the XBI to recover before 2026 ends, but more now see another drop as “more likely.” That’s a sharp turn from earlier optimism. The sector’s flat trading and muted sentiment show a market adjusting after last year’s surge.
Private startups are cashing in on pent-up demand, while public companies wait for a spark. The split mirrors clinical momentum elsewhere in biotech, like the strong response rates reported for IASO Bio’s FUCASO in plasma cell neoplasms.
Private M&A now anchors the sector. Startups with data and leverage are landing billion-dollar exits. Public market dealmaking remains sluggish, leaving founders in control and public investors watching from the sidelines.
Big-ticket deals keep rolling in. On October 5, 2026, GE HealthCare said it would buy Sofie Biosciences, a private company, for $945 million in cash. The deal expands GE’s PET drug manufacturing and distribution and gives it U.S. rights to the late-stage radiopharmaceutical FAPI-74, according to a Reuters financial review. In September, Telix Pharmaceuticals announced a merger with ITM Isotope Technologies valued at up to $2.35 billion. Telix also plans to raise $180 million in a private placement to fund the combined company.
