LIVE MARKETS-Biotech dealmaking keeps adding up

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BIOTECH DEALMAKING KEEPS ADDING UP

Biotech stocks have struggled to regain their summer highs, but M&A activity across the sector remains brisk even as quarterly deal flow has fluctuated this year.

The latest example comes from reports that AstraZeneca AZN.L made a non-binding offer for Rhythm Pharmaceuticals RYTM.O last month through its rare-disease unit Alexion. The deal hasn't been confirmed, but the news sent Rhythm shares up 28% and put biotech M&A back in focus.

One of the key drivers behind the deal flow is a looming wave of patent expiries facing large drugmakers, prompting them to fill product pipelines through acquisitions.

Highlighting the logic behind much dealmaking, Jefferies says interest in Rhythm is unsurprising and that its growing revenues "could help offset some of pharma's upcoming LOE's", or losses linked to patent expirations.

BioBucks data show 76 biotech and biopharma deals worth nearly $208 billion have been announced so far this year, up from 49 worth roughly $149 billion at the halfway mark of 2026.

Since June 30, the sector has added 27 deals and nearly $59 billion of disclosed value, even though third-quarter activity slowed from the exceptional pace seen in the second quarter.

The S&P Biotech ETF has fallen about 6% from its August peak, making targets look cheaper, but remains up roughly 30% for the year, comfortably beating the S&P 500 .SPX.

(Danilo Masoni)

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