Key highlights from December:

• Micro-cap biotechs continue to outperform with the rest of life sciences posting continued gains over the last month
• 6 M&A and 38 licensing transactions were announced this month, versus 10 M&A and 23 licensing transactions announced in November; M&A consisted entirely of marketed or near-marketed assets this month, while $1bn+ licensing deals spanned preclinical to commercial stages
• Follow-on activity grew to 26 priced deals in December raising an aggregate of $5.8bn up from $2.4bn in November, led by Terns’ and Structure Therapeutics’ $650mm offerings
• This month, the Trump administration continued to strike most-favored-nation pricing agreements with nine large pharma players, trading a U.S. price to the lowest price in other developed countries for relief from pharma tariffs. Most-favored-nation pricing has continued to advance on a company-by-company basis following Trump’s letter to 17 large drugmakers earlier this year
• Innovation in the obesity market continued in December, with Lilly’s once-weekly retatrutide reading out leading data in patients with obesity and osteoarthritis. Retatrutide is a once-weekly tri-agonist targeting GLP-1, GIP, and glucagon – the efficacy versus tolerability trade-off was underscored in these trials by high discontinuation rates, demonstrating the continued need for dose/maintenance strategies
• 2026 biotech market sentiment has grown increasingly positive, with continued high-value M&A expected to offset upcoming large pharma LOEs from 2026 – 2032. Public market investors’ improved confidence in biotech and a favorable follow-up environment position the industry for increased IPO activity and fund flows in 2026, supported by the expectation of decreased interest rates