Key highlights from February:

• While most biotech companies continue to fare well, led by the performance of small cap players, specialty pharma has broadly faced a challenging month
• 5 M&A and 24 licensing transactions were announced this month, versus 7 M&A and 41 licensing transactions announced in January; the two largest deals were both in the cell therapy space with Gilead’s acquisition of its longstanding partner Arcellx, and Lilly’s acquisition of in-vivo focused Orna; this represents a sizable drop in dealmaking activity from December and January’s highs
• Follow-on activity increased slightly, with 24 priced deals in February, versus 20 in January, though aggregate capital raised declined to $2.4bn (vs. $3.7bn)
• Industry sentiment around IPOs remains cautiously optimistic as investors hope that the ongoing recovery of biotech public markets will support a widening of the IPO window going into 2026
• The rare disease regulatory review environment remains unsettled, with the FDA signaling tighter evidentiary standards and creating “goalpost risk” across accelerated approval and biomarker-driven filings, with heavier scrutiny of surrogate endpoints and non-randomized trial designs
• Big Pharma earnings were generally strong across the board with Novo, Pfizer and BMS facing challenging quarters; Merck announced $70bn in unadjusted sales by the mid-30s driven by Keytruda QLEX (30-40% adoption in 2028) and previous BD, although recognize that the job is not done and will continue targeting deals in the $1bn – $15bn range
• Novo Nordisk’s GLP-1/amylin combo has failed to beat Eli Lilly’s obesity blockbuster Zepbound in a phase 3 weight loss study, leading to a 16% drop in Novo’s stock and further solidifying Lilly’s position in obesity ahead of the upcoming PDUFA date for its once-daily oral pill, orforglipron