Each quarter, Locust Walk’s deal team compiles key statistics and trends on strategic transactions and financings. Our 2026 Q3 Market Conditions Report applies the latest data to analyze the current landscape in life sciences deals.

Licensing activity cooled in Q3 2026 to a two-year low, reflecting smaller average deal size following Q2’s mega-deal driven surge, while M&A moderated but remained on pace for a record year​.

• Globally, licensing fell to a two-year low in Q3 2026, reaching its lowest level since Q3 2024, with deal value and deal volume down QoQ 33% and 5% respectively, as average deal size declined to $1.2B, following Q2’s mega-deal-driven peak.
• China remained the key driver of global licensing economics despite average total deal value falling 43% QoQ to $1.7B, as activity remained concentrated in Discovery/Preclinical-stage transactions, which comprised 10 of the 15 global deals involving China-based sellers.
• Licensing deal terms tilted back toward upfront consideration in Q3 2026, with upfronts as a share of total deal value jumping to 10%, more than doubling from Q2’s low (4%).
• M&A retreated from Q2’s 3-year high of $80.7B across 35 transactions to $42.1B across 30 transactions in Q3 2026, though YTD value of $173B has already surpassed full-year 2025, while public equity premiums rebounded.

Public and private financing remained strong in Q3 2026 as IPO volume hit a five-year high of 9 deals and U.S. public equity continues to outperform, while 2026 YTD venture financings exceeded 2025 totals.

• S. Markets: The financing environment remained open in Q3 2026, with total IPO proceeds of $2.4B and a 5-year high in IPO volume with 9 deals while PIPE activity strengthened to $3.8B across 14 deals, though not enough to replicate Q2 2026 as follow-on financings fell 60% in aggregate raise size.
• APAC Capital Markets: The markets remained subdued with both China and Japan IPOs falling as uncertainty has kept the market shut, while private financing markets experienced a modest decline across the region though China still posted its 3rd straight quarter of >$1B.
• European/UK Capital Markets: Venture financing returned to a historical range with total financing value of $792M across 16 financings, representing a decline from a record Q2 2026 driven by Isomorphic Labs’ $2.1B Series B.

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