Each quarter, Locust Walk’s deal team compiles key statistics and trends on strategic transactions and financings. Our 2025 Year-In-Review Report applies the latest data to analyze the current landscape in life sciences deals.

From the previous report, we shifted to a more global, trend-focused view of dealmaking and financing. This quarter, we refined the approach further by emphasizing durable market signals over quarter-specific data, highlighted by a new slide tracking public M&A premiums since 2022. Please share any feedback and ideas on how we can continue improving the report.

2025 was a year of recovery & transformation in strategic transactions with China leading in licensing deal value, a global pivot toward later-stage assets, and M&A activity rebounding to larger-sized transactions.

Globally, licensing activity reached new all-time highs in 2025, with total deal value rising sharply in Q4 2025, alongside increases in transaction volume and average deal size, sustaining levels near three-year highs.

• 2025 saw global licensing deal value reach an all-time high ($230B) with volume remaining robust (179 deals) and average deal value increasing, driven especially in 4Q 2025 by a surge in Phase 3 transactions, while deal value remained weighted toward early-stage assets (~61% of all transactions for discovery and preclinical programs)
• Established modalities (i.e., protein biologics, small molecules) continued to dominate, accounting for ~80% of deal value and therapeutic mix continued to diversify with immunology/infectious disease and metabolic/endocrine gaining share at the expense of oncology

Geographically, 2025 marked a decisive shift with China-based sellers accounting for ~47% of global licensing deal value (up ~22% from 2024), overtaking the U.S. (down to ~28%), and China average deal size increasing to ~$2.1B (compared to ~$800M for U.S. deals).

• U.S. licensing activity rebounded in late 2025, driven by increased Phase 1+ deals which maintained U.S. volume leadership with sellers accounting for ~41% of deal volume, but with lower average deal sizes
• Europe/UK and Japan remained stable in 2025, each contributing 10-20% of global deal value with EU activity normalizing after early-year mega deals (e.g., BioNTech/BMS, Philochem/RayzeBio)

M&A rebounded in 2025 with global M&A deal value nearly doubling (~$141B in 2025, up from ~$72B in 2024) with deal volume holding stable at 79 transactions for the year.

• M&A was anchored in established modalities (~91% of value) with a marked shift to later-stage assets; Phase 3 deals increased 26% and approved assets 12% as compared to 2024, with larger overall deal values
• The U.S. and EU/UK sellers dominated M&A in 2025 with China’s M&A activity declining, demonstrating a Chinese focus on licensing transactions
• Ex-U.S. M&A was heavily skewed toward approved and Phase 3 assets, with EU/UK sellers accounting for ~63% of ex-U.S. deals
• Mega-deals (e.g., Pfizer/Metsera $10B, Novartis/Avidity $12B, Merck/Cidara $9.2B) elevated yearly average deal sizes
• M&A equity premiums fluctuated, reflecting a mix of strategic acquisitions and distressed sales

In 2025, capital markets regained strength, but discipline remains high, with a focus on operational efficiency and clinical validation as later stage companies are fueled by private financings amid limited IPOs.

U.S. Capital Markets: Public markets improved materially in 2025, with biotech public markets outperforming the S&P 500 by 19% at year end, overcoming early-year volatility from regulatory and pricing uncertainty, while private markets remained constrained amid a largely closed IPO window.

• While IPO activity remained largely muted throughout 2025 at the lowest deal value and volume over the last 3 years, PIPEs and secondary offerings surged with PIPE volume up 259% and value up 386% off yearly lows, as companies found more attractive terms and broader market strength
• Public financings surged in 2025 up to a 3-year high of $16B, driven primarily by follow-ons; from Q2 2025 to 4Q 2025, volume and value of secondary offerings increased by more than 4x and 5x as public biopharmas took advantage of rising valuations
• Venture funding remained disciplined with a greater weight given to clinical validation as later rounds (Series D+) saw a 150% uptick from 2024, reflecting a focus on de-risked, follow-on investments in portfolio companies

European Capital Markets: Despite lower deal volume than 2024, 2025 saw a 15% increase in venture financings TDV for the year, driven by an explosive 4Q 2025 with >$1.5B in new private financings.

• Venture activity favored early rounds with investors primarily deploying capital to Phase 1 and 2 programs, with an expansion of fundraises for biologics and small molecules

APAC Capital Markets: 2025 saw renewed performance across APAC with China and Japan driving regional strength through robust public and private financing activity, while South Korea and other markets lagged broader equity indices.

• China continued to lead APAC market momentum, despite the Hang Seng waning in the latter part of 2025, still outperformed the HSI and XBI
• After lagging most of 2025, Japan experienced a broad market rally, as the Nikkei 225 reached all-time highs, and biotech stocks accelerated

The year reflected renewed optimism, disciplined risk-taking in private markets, and strengthening investor confidence in public markets, positioning the sector for broad-based growth as public market valuations, financing activity, & venture investment rebounded to multi-year highs by the close of 2025.

We invite you to read our report and welcome the opportunity to discuss its contents with you.