TheChek News Flow

Gapping up
In reaction to earnings/guidance:

Other news:

• Some of the best-selling drugs in the world are facing a loss of exclusivity in key jurisdictions in the upcoming years in what the sector calls “the patent cliff.”
• The need for pharma to top up their pipelines coincides with the broader biotech sector coming back to life after years of depressed valuations.
• M&A in the sector picked up dramatically in September and October 2025 as overhangs lifted.

A multitude of factors are coming together to bring a big burst in biotech M&A.

The high-profile bidding war between Pfizer

and Novo Nordisk over Metsera and its leading weight loss drug candidate shows just how competitive some pockets of the sector have become, as Big Pharma frantically works to fill the looming revenue hole.

Some of the best-selling drugs in the world are facing a loss of exclusivity in key jurisdictions in what the sector calls “the patent cliff.” By 2032, losses of exclusivity for best-selling brands are worth at least $173.9 billion in annual sales, according to CNBC calculations. Estimates vary on the total amount of revenue at risk when factoring in smaller brands, with some analysts putting the number between $200 billion and $350 billion.

That poses a real threat to their makers’ top lines — unless they manage to replenish their pipelines with new, revenue-bearing innovations.

The need for pharma to top up their pipelines coincides with the broader biotech sector coming back to life after years of depressed valuations following a boom in healthcare investing during the Covid-19 pandemic.

M&A in the sector picked up dramatically in September and October 2025, following a terrible start to the year. The lifting of overhangs from Trump’s war on high drug prices for Americans and threats of triple-digit pharma sector tariffs, as well as the beginning of an interest-rate cutting cycle, has further encouraged dealmaking.

Now, companies are facing a situation where they need to fill their pipelines, while also navigating a competitive environment for the best assets.

Filling the revenue hole

The biopharma sector is unique in that companies face a loss of patent for lead assets every decade or so. That lifecycle of assets requires companies to constantly come up with new innovations – or buy those who do.

“Biotech, being the innovation kind of engine of healthcare, is where pharmaceutical companies have come historically to build their biopharma businesses,” Linden Thomson, senior portfolio manager at Candriam, told CNBC.

Pharmaceutical firms, many of which started as chemical companies, typically built their businesses on simpler, small molecule drugs, while biotechs use living organisms to make medicines like antibodies and mRNA. Over time, the distinction between the two has blurred as pharma invested heavily in biotech and many of the drugs on the market today were instead discovered by biotech companies or involved with biotech manufacturing, Thomson said.

The looming patent cliff, which includes the loss of exclusivity on Bristol Myers Squibb’s

Eliquis, Merck’s

Keytruda, and Novo Nordisk’s Ozempic, is a driving force behind M&A and a key part of many large-cap pharma companies’ business strategy.

According to analysis by healthcare market researcher and consultant Joanna Sadowska, about half of the blockbuster drugs approved between 2014 and 2023 were bought, as opposed to being developed internally. The two most successful drugmakers in terms of the number of blockbusters approved over those years were Eli Lilly

and AstraZeneca

, which acquired eight and five medicines out of a total of 13, respectively.

European heavyweights GSK

and Novartis

are among those clear about the need to add to their pipelines through deals. Both are looking for what they call “bolt-on deals” that fit in with their key therapeutic and technology areas.

During an investor event in London in November, Novartis CEO Vasant Narasimhan emphasized the company’s strong cash generation “that really allows us to invest in the business.”

While Novartis doesn’t put a size on these bolt-on deals, having done deals of up to $12 billion, GSK is more specific.

Chris Sheldon, global head of business development at GSK, calls it the “sweet spot”: going after validated biology, often in mid-stage development in the $1 billion to $2 billion range, where the outcome of a drug candidate isn’t yet obvious. Many acquisitions of late-stage assets end up becoming a maths problem, Sheldon told CNBC, particularly if it’s a listed company that has reached fair value.

“BD [Business development] I always describe as a contact sport. If an asset is good enough, there’s multiple suitors,” he added.

Deals can range from partnerships and licensing and royalties agreements to clear-cut buyouts.

“We would do licensing every day of the week versus M&A if we could, because you can manage risk and reward the partner as value is unlocked and risk is discharged,” Sheldon said.

However, an acquisition with a big price tag paid up front may at times be the only option, and it can have some attractive benefits, such as taking total control of the development plans and acquiring talent as well as the molecules. “The reality is actually the seller often dictates that, a lot of people don’t realize that,” Sheldon said.

A competitive environment

As biotech M&A became hot again, November saw arguably the sector’s most dramatic event of the year take place: the public bidding war between Pfizer and Novo Nordisk over clinical-stage weight loss drug maker Metsera, ultimately won by Pfizer in a deal worth up to $10 billion.

It’s rare for bidding to take place in the public eye, said Stefan Loren, managing director at Oppenheimer. “It’s a very public thing to chase a company, and so you have to worry about the reputational damage: A, if you lose; B: if you get too exuberant and go to buy,” he told CNBC.

“That definitely says something about the biotech market and companies wanting to play catch-up,” Loren added. “They are responding to what their situation is, their situation is that they’re about to have a lot of things come off patent.”

Typically, pharma shopping sprees tend to last up to a year and a half before pulling back, Loren added.

The GLP-1 market for weight loss drugs has become one of the most competitive segments in global pharma as major players race to secure next-generation assets through both internal development and acquisitions, noted PitchBook researchers in their 2026 Healthcare outlook published early December. More than 120 metabolic assets are currently in development across 60 companies, creating a deep pool of potential M&A targets, they added.

“The high-profile battle between Pfizer and Novo Nordisk for Metsera underscores the escalating strategic urgency in this space,” they said. “We expect competition to intensify as differentiation windows narrow and policy tailwinds expand reimbursement and regulatory support.”

While the obesity space lends itself well to illustrate current competitive dynamics, the biotech boom isn’t confined to one single therapeutic area. Neurology, oncology, immunology, and inflammation are other key areas of activity.

“It’s idiosyncratic what’s popular at any given point,” said Loren. “They [companies] are going for what can fill the pipelines as quickly as possible.”

A boom, dip and another boom

During the Covid-19 pandemic, biotech sailed to the top of investors’ wishlists. Amid increased attention, investors’ optimism, and low interest rates, the sector flourished, valuations skyrocketed, and many biotech companies went public or were bought by larger peers.

As the biopharma industry is a cost-intensive research business, raising money is critical for drug discovery. Early-stage biotechs operate with high stakes, often making them early casualties of a risk-off market like the one following the pandemic boom.

Throughout much of 2025, the Trump administration also clouded the outlook for biopharma with threats of high sector tariffs, cuts to federal health agencies, and lower drug prices. But as companies have made deals with Trump on pricing and the president has made clear that if they invest in U.S. manufacturing, they would be exempt from additional tariffs — two big overhangs for the sector have cleared.

A flurry of good data readouts has also boosted biotech valuations, said Loren. Only a year ago, even good data sent stocks down, he said. “People were using everything as an event just to get out.”

By late spring, the market started to shift and now, investors take good data and run with it. “There’s a point at which these things get so low that at the end of the day, what’s the risk?” Loren said. “And now, when we saw the acceleration of M&A, the good news is that that play became very real.”

More deals in 2026

In 2026, deals could pick up even further, analysts say.

“We see 2026 as providing one of the best investing opportunities we have seen in decades,” the PitchBook analysts said, driven by the clearing of U.S. healthcare policy overhangs and additional rate cuts spurring more speculative investing postures.

Rajesh Kumar, head of European life sciences and healthcare equity research at HSBC, similarly expects a “big ramp up of deal flows” in the year ahead now that the noise around drug pricing has settled.

“The market’s margin expectations beyond [2026] might be a bit more optimistic than it should be, but nonetheless, the companies are deploying capital in the U.S., manufacturing is happening, clarity is there, and that is a great environment for actually doing biotech deals and early stage biotech funding,” he told CNBC’s “Squawk Box Europe.”

Other developments in the pharma sector could make for another year of significant headwinds – potentially adding to the urgency for drugmakers to make deals.

Prices for certain bestselling drugs will start to come down under the U.S. Inflation Reduction Act in 2026, which appears to treat the active ingredient of drugs by the same manufacturer as the same, limiting life cycle management options in some cases, HSBC analysts said. Biosimilars in the U.S. might also become easier to launch if a recent Food and Drug Administration draft guidance is implemented.

“All these factors might mean that the fade beyond the patent cliffs, especially for biologics, might be more aggressive than in the past,” the analysts said.

Fund paid $81.6mn dividend to another group company controlled by the billionaire financier

Sir Chris Hohn’s hedge fund TCI surged 27 per cent last year as it profited from big bets on the aerospace sector, helping to solidify the British billionaire’s place as one of the world’s best-performing hedge fund managers.

TCI, which managed just under $80bn at the start of this year, made billions of dollars from bets on US advanced jet engine manufacturer GE Aerospace, French plane manufacturer Airbus and defence company and engine manufacturer Safran, according to one person familiar with the gains. All the companies outperformed. The return figure is calculated net of investor fees.

The news comes as accounts to March last year filed by TCI Fund Management Limited show that it paid an $81.6mn dividend to another company in the wider group, also controlled by the billionaire financier. Hohn typically invests much of these dividends back into the fund, according to a person familiar with the situation.

Hohn is known for his fearsome activist campaigns against companies including Airbus, Alphabet and the London Stock Exchange Group, but also for buying and holding companies that he sees as having powerful competitive advantages against rivals for several years.

TCI held a $14bn stake in GE Aerospace by the third quarter of last year, according to US regulatory filings, with the stock surging 90 per cent during the year. Safran increased by 45 per cent last year while Airbus was up more than 30 per cent.

TCI also held multibillion-dollar stakes in Microsoft, Moody’s and Visa, and these stocks were positive but performed less well.

The S&P 500 climbed 16 per cent last year while the Stoxx Europe 600, the region’s benchmark index, gained almost 17 per cent.

The accounts also showed that the group had made a $797mn charitable donation, confirming Hohn as one of the UK’s biggest donors. Hohn is the co-founder and chair of The Children’s Investment Fund Foundation, a charity that makes large donations to causes, including children’s health, climate change and sexual and reproductive rights.

Last year, the foundation stopped giving grants to US-based non-governmental organisations, saying it no longer understood the “US policy environment” governing donations. Liberal non-profits in America have been put under pressure by US President Donald Trump’s administration, with the president saying the non-governmental sector was full of “thugs and sleazebags”.

TCI declined to comment.

Drug could provide a cure for condition that affects more than 250mn people

GSK’s treatment for chronic hepatitis B delivered a positive result in two late-stage trials and could provide a cure for a condition that affects more than 250mn people.

The British drugmaker said on Wednesday that its phase 3 trials of bepirovirsen delivered a “statistically significant and clinically meaningful functional cure rate” in the more than 1,800 patients from 29 countries who participated in the two studies.

Functional cure rates, defined as when the virus can no longer be detected in patients’ blood, were significantly higher with bepirovirsen plus standard of care, compared with standard of care alone, the company said.

The current standard of care for the viral disease, which is the leading cause of liver cancer and can lead to serious liver damage, involves life-long treatment using antiviral drugs that stop virus replication.

UBS analyst Colin White said in a note he forecast that the drug would reach peak annual sales of $2bn.

The clinical trial success of bepirovirsen, which will be submitted to regulatory agencies for approval, could be a boon for GSK. Its performance has lagged peers in recent years and is searching for new blockbuster drugs to replenish its pipeline.

Many of the FTSE 100 group’s bestsellers, especially several HIV medications with the compound dolutegravir, will lose US and European exclusivity between 2028 and 2030.

Shares dipped 1 per cent in morning trading but have risen nearly 40 per cent over the past 12 months, valuing the company at almost £77bn.

GSK, which has an ambitious goal of increasing revenues from £31bn in 2024 to £40bn by 2031, received regulatory approval last year for several potential blockbuster drugs including exdensur, an asthma drug with peak annual sales potential of £3bn.

The news marks an early win for chief executive Luke Miels, who has taken over from Dame Emma Walmsley and has said he stood by the £40bn forecast.

Tony Wood, GSK’s chief scientific officer, said: “Today’s result supports our plans to progress bepirovirsen as a treatment and also continue its development as a backbone in future sequential therapies. We’re pleased by this major advance in our expanding hepatology pipeline, aimed to transform outcomes in liver disease.”

Figure would represent a significant amount of all the oil the country produces annually

President Trump said Tuesday that Venezuela’s interim authorities will give the U.S. between 30 million and 50 million barrels of sanctioned oil, with proceeds overseen by the White House to benefit both countries.

In a post on Truth Social, Trump said that he has directed Energy Secretary Chris Wright to carry out his plan for the oil to be taken by storage ships and transported to the U.S.

“This Oil will be sold at its Market Price, and that money will be controlled by me, as President of the United States of America, to ensure it is used to benefit the people of Venezuela and the United States!,” said Trump.

Trump’s post offered the most detail to date about how he intends to make good on his promise to extract oil from the country.

Venezuela’s Ministry of Information didn’t respond to requests for comment.

After the U.S. captured strongman Nicolás Maduro, Trump announced the U.S. would take control of Venezuela’s oil reserves and bring American oil companies into the country to rebuild its oil industry and infrastructure. “What we want to do is fix up the oil, fix up the country, bring the country back, and then have elections,” Trump told reporters earlier this week.

On Friday, the president is expected to meet with representatives from the three largest U.S. oil companies—Chevron, ConocoPhillips, and Exxon Mobil—as well as other domestic producers at the White House to discuss investments in Venezuela.

The announced influx of barrels would be good news for Gulf Coast refineries that are configured to run heavy crude including from Venezuela—and by extension for U.S. consumers of diesel and gasoline and other refined products, analysts said. The plants in recent years have been looking for new sources of heavy crude.

“That’s a pretty good slug of oil if it goes in the market right away,” said John Auers, managing director of refining analytics at consulting firm RBN Energy.

The value of the barrels would be between $1.5 billion and $2.5 billion based on Tuesday’s benchmark for heavy crude used on the Gulf Coast, Auers said.

The amount of oil Trump says Venezuela will give the U.S. is significant—up to 15% of all the crude Venezuela produces in a year. It would take as many as 25 of the largest oil tankers in the world to transport the oil.

Trump said the oil will be taken via ship to docks in the U.S.

The latest plan comes as Trump threatened the country’s acting president, Delcy Rodríguez, to cooperate or face consequences. “If she doesn’t do what’s right, she is going to pay a very big price, probably bigger than Maduro,” Trump said on Sunday.

Pentagon’s go-to electronic-warfare aircraft is a key tool in the military’s renewed focus in this type of conflict

Among the more than 150 U.S. warplanes that swarmed over Venezuela this past weekend was the Growler, a jet that attacks signals, not people.

The Boeing EA-18G Growler is a specialist in electronic warfare, a once neglected part of combat that has enjoyed a renaissance following its mass use in the Ukraine war. The Growler, which is flown by a Navy squadron nicknamed the “Zappers,” likely played a key role in Venezuela, where air defenses were quickly overwhelmed.

In electronic warfare, communication, radar and other signals are targeted or protected.

The plane, based on Boeing’s F/A-18F Super Hornet, is a stalwart of U.S. electronic warfare, a field that mainly withered after the Cold War, said Thomas Withington, an electronic-warfare expert at the Royal United Services Institute think tank.

“The Growler forms the mainstay of U.S. air power’s EW component and would have located Venezuelan radars, jammed them and performed a similar task with military communications,” he said, referring to electronic warfare by its initials.

This weekend the U.S. used a host of aircraft—including F-22s, F-35s, F-18s jet fighters, B1 bombers and drones—to suppress Venezuelan air defense and communications as special forces seized the country’s president, Nicolás Maduro.

While the U.S. was easily able to fly into Venezuela, this was against a less sophisticated enemy with decent but limited quantities of air defense, said Nick Cunningham, a defense analyst at Agency Partners, a research firm.

The tactics employed “would probably be less effective against a well-equipped near-peer adversary such as Russia or China,” he said.

In Venezuela, the Growler and other U.S. aircraft were able to easily work around the country’s aging, predominantly Soviet- and Russian-made air-defense systems.

Venezuela had, for instance, 12 S-300 missile-defense systems, according to the International Institute for Strategic Studies think tank. Versions of this widely used Soviet-developed system were also easily bypassed and destroyed by Israel’s air force during their assaults on Iran last year.

Venezuela also has some Chinese radar systems, though those it has shown off were older models, according to Janes, a defense-intelligence company.

Electronic warfare isn’t new, with the British Navy jamming and intercepting radio communications as far back as the start of the last century.

For the U.S., more recent conflicts in Afghanistan and the Middle East required less electronic warfare. That led to concern that the Pentagon had ignored the field.

Then came the Ukraine war, which is widely considered history’s biggest electronic-warfare conflict. Militaries have been scrambling for new capabilities since.

“EW is not as well understood by people, and it is not as visible or catchy as buying fighter planes or ships,” said Frank Kendall, who served as the U.S. Air Force secretary during the Biden administration. “But it is critically important as we have seen in Ukraine.”

In Ukraine, the mass use of drones brought opportunities to jam and spoof their signals. Russia has developed a particular expertise in the field and has also jammed U.S. equipment such as the High Mobility Artillery Rocket System, or Himars.

That can be done as simply as bombarding a drone or rocket with signals that drown out the connection to their operator or satellite guidance.

But platforms such as the Growler, first delivered in 2008, have more in their tool kits. They, for instance, can simulate multiple aircraft in an enemy’s radar by sampling its pulse and sending that back, said RUSI’s Withington.

The Growler also carries so-called anti-radiation missiles that detect and then destroy an adversary’s radar.

Almost all modern aircraft use electronic warfare, mainly to defend their own communications. The U.S. F-35 jet fighter has a particularly potent capability, mainly produced by Britain’s BAE Systems, analysts say.

But the Growler bristles with electronic-warfare equipment, much of which it carries in large pods under its wings and belly. It also has a crew of two, one of whom specializes in electronic warfare. Its price in 2021 was around $67 million.

Boeing referred questions to the U.S. Navy, which didn’t immediately reply to requests for comment.

Electronic warfare has become one of the defense industry’s most lucrative businesses. While large U.S. defense companies don’t break out sales related to electronic warfare in their results, European peers report some of their highest margins in this field.

MBDA, the European missile maker, is marketing a missile whose purpose is to scramble communications and radars. Companies sell decoys, which trail planes or ships, sometimes looking like a missile, and emit signals to confuse adversaries into targeting it instead of its mother ship.

To defend against signal jamming, militaries are starting to communicate via lasers, where able. Russia and Ukraine have gone old school and connect many of their drones to fiber-optic cables.

Artificial intelligence is presenting further opportunities for electronic warfare.

Analysts wonder, though, if the U.S. and Europe have fallen behind China, in particular. For instance, updates to the Growler’s electronic-warfare pods, which the U.S. relies on to protect its air fleets, have been delayed.

“Progress in the program has been painfully slow,” said Kendall, the former Air Force secretary.