After Hours Summary: GMED +10.2% sharply higher on upside guidance; STZ +2.9% and AZZ +2% higher on earnings; APLD -0.5% ticks lower on earnings; Defense stocks strong after-hours
After Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: GMED +10.2% (guidance), STZ +2.9%, LENZ +2.4%, AZZ +2%
Companies trading higher in after hours in reaction to news: LMT +6.8% (President Trump wants a 50% defense budget increase, according to Bloomberg), NOC +4.6% (President Trump wants a 50% defense budget increase, according to Bloomberg), LHX +4.3% (President Trump wants a 50% defense budget increase, according to Bloomberg), GD +4.2% (President Trump wants a 50% defense budget increase, according to Bloomberg), KRMN +2.9% (agrees to acquire Seemann Composites and Materials Sciences; reaffirms FY25 guidance), RTX +2.9% (mentioned in truth social post), ANGI +2.6% (reduction in workforce), HII +2.5% (President Trump wants a 50% defense budget increase, according to Bloomberg), COST +1.4% (December comps), SMTI +1.3% (innovative technology contract from Vizient for BIASURGE Advanced Surgical Solution), BA +0.8% (President Trump wants a 50% defense budget increase, according to Bloomberg), RPM +0.7% (to acquire Kalzip GmbH), CEG +0.5% (completes acquisition of Calpine Corporation), GLUE +0.3% (stock offering), XOM +0.2% (provides impacts to Q4 planned and seasonal factors and other items)
After Hours Losers
Companies trading lower in after hours in reaction to earnings/guidance: PHAT -11.8% (guidance; also mixed shelf offering; also stock offering by selling shareholders), FC -10.2%, KRUS -3%, JEF -2.9%, PSMT -2.4%, ABBV -0.6% (guidance), APLD -0.5%
Companies trading lower in after hours in reaction to news: IMRX -20.9% (updated overall survival and safety data from its ongoing Phase 2a trial of atebimetinib), PHAT -11.8%, RVMD -10.2% (lower after AbbVie (ABBV) says it's not in talks to purchase RVMD, according to Bloomberg), CSIQ -7.7% (convertible notes offering), CBIO -1.4% (stock offering by selling shareholders), PR -0.6% (completes corporate reorginzation; also mixed shelf offering), ABVX -0.4% (2026 corporate outlook), LLY -0.1% (confirms agreement to acquire VTYX)
AbbVie Near Deal for Revolution Medicines
Cancer-drug biotech has a market value around $16 billion
AbbVie ABBV 5.30%increase; green up pointing triangle is in advanced talks to buy cancer-drug biotech Revolution Medicines RVMD 28.87%increase; green up pointing triangle, according to people familiar with the matter.
Revolution Medicines has a market value of around $16 billion. It couldn’t be learned how much AbbVie is offering, but including a typical deal premium, Revolution could be valued at around $20 billion or more.
A deal could come together soon, granted the talks don’t hit any last-minute snags, the people said.
Here’s Why Under Armour Is Getting Serious Investor Attention
Some Wall Street analysts believe Under Armour is on the "right track" as it undergoes another overhaul.
While Under Armour Inc.’s turnaround won’t happen overnight, there’s reason for optimism.
A regulatory filing on Monday with the Securities and Exchange Commission showed that Canadian investor Fairfax Financial Holdings Ltd. and its affiliates together have a acquired beneficial ownership of Class A Common Stock in Under Armour totaling 22.2 percent, or nearly 42 million shares. The filing said the share acquisition was for “investment purposes,” and that one or more affiliates of Fairfax may decide to purchase additional securities of Under Armour in the open market.
Shares of Under Armour closed on Tuesday at $5.43 in Big Board trading. For the month of December, the shares have traded as low as $4.07 and as high as $4.95. That’s lower than the $7.54 the shares were at when trading began on Jan. 2, 2025. In the back half of 2024, Under Armour shares at one point had an intraday high of $10.62, although the trading range for the period was more centered at between $6.50 and $8.50.
A proprietary global sportswear survey from UBS on Friday suggested that investors “materially undervalue the Under Armour brand name.”
According to analyst Jay Sole, “Under Armour remains one of the world’s best known and liked athletic wear brands.” He said the survey results show that Under Armour belongs in the same class of brands that include Lululemon, Jordan, Adidas, Puma, On, Hoka, Skechers and New Balance.
The market watcher has a “buy” rating on shares of Under Armour. “Our view is an improving North America sales growth rate will boost the stock’s valuation,” Sole said.
The survey asked about athletic apparel purchase intentions on a global basis for the next 12 months, and Under Armour ranked fourth among the global brands, behind Nike, Adidas, and Puma.
The same question for athletic footwear saw Under Armour at 11th place, behind Nike, Adidas, New Balance, Puma, Air Jordan, Asics, Anta, Skechers, Li-Ning and Converse.
When it comes to the U.S. market, Under Armour fares better. Under Armour place third, behind Nike and Adidas, when it comes to apparel purchase intentions. The same question for footwear in the U.S. market saw Under Armour making the top 10, just ahead of Brooks — but behind Nike, Adidas, New Balance, Air Jordan, Puma, Skechers, Reebok and Asics.
Despite a second-quarter net loss of $18.8 million on revenue of $1.33 billion, Williams Trading analyst Sam Poser said quarterly results indicate that Under Armour “is on the right track.” The analyst also noted that his retail checks indicate that young consumers have begun to “gravitate to the Under Armour brand,” adding that what the company needed is more innovating marketing.
President and CEO Kevin Plank said during a Nov. 6 conference call that the brand’s category management model has a clear focus on training, running and sportswear. And he said that in streamlining the assortments, the company has been working on bringing “innovation and style back to the center of what we do.” And for footwear, the strategy is to build on the “franchises that are already successful.”
And while fall-winter 2025 is when early green shoots will show, Plank said “spring-summer 2026 only gets stronger and is also filled with innovation.”
Moreover, Under Armour’s well-received move in mid-November to part with Steph Curry was part of restructuring plan that is expected to see the apparel and shoe firm focus on its own UA brand.
Ant Builds a Mobile Payment Network as an Alternative to Visa, Mastercard
Five years after the Chinese government quashed Ant Group’s plans for what would have been the world’s largest initial public offering, the Chinese fintech giant has built a fast-growing international business. That offshoot runs a global payment network for digital wallets that could one day be a formidable alternative to Visa or Mastercard.
Ant International increased revenue between 20% and 25% in 2025 to an estimated $3.7 billion, according to a person with direct knowledge of the matter. That’s almost 10% of Ant Group’s overall revenue in 2025, the person added. In 2019, when Ant last disclosed its full-year financials, its international business had less than $1 billion in revenue, or around 5% of Ant’s total.
Investors are now hoping Ant could take the international arm public, allowing them to cash out some of their investments. Ant set the stage for an IPO of the overseas branch in 2024, when it restructured the unit’s ownership by putting it into a separate company owned by Ant Group, Alibaba Group, Ant International employees and some of the investors who had put money into Ant. U.S. investors in Ant include Silver Lake, Warburg Pincus, The Carlyle Group and General Atlantic.
Ant International’s valuation would likely be just in the tens of billions, given the price-to-revenue multiples at which other payment companies such as Visa and Mastercard are traded. That’s a fraction of Ant Group’s potential 2020 IPO valuation of $315 billion.
When asked about the possibility of an IPO, Douglas Feagin, president of Ant International, said: “We’re focused on driving our business, and we don’t have anything to share about that now.”
If Chinese regulators allowed Ant International to go public, that would also give a shot of confidence to international investors, who have turned cold on financing Chinese startups following the Chinese government’s crackdown on tech platforms, China’s sluggish economic growth and Beijing’s rising geopolitical tensions with the West in the past five years.
“Almost every major U.S. endowment fund has illiquid holdings on Ant that they couldn’t realize, and it’s been a big overhang for them to consider further investments in China,” said an executive with a U.S.-based endowment fund, which has significant exposure to Ant through several venture capital and private equity firms.
The core of Ant International is a mobile payment network, Alipay+, which connects more than 40 mobile payment apps from dozens of countries across Asia, Europe and the Middle East and is accepted by 150 million merchants in over 100 countries, mostly for money spent by tourists.
Ant International also has developed AI models to predict foreign exchange usage that big banks including Citigroup, Barclays and Standard Chartered are already using. Beyond these two divisions, the company provides online and offline payment processing services for merchants around the world, and foreign exchange services for small merchants.
Ant International’s mobile payments business is still small compared with the credit card giants. Ant International estimates that $1.4 trillion in funds moved through its platform in 2025, including anything from a South Korean tourist’s spending in Thailand to an Indonesian consumer’s e-commerce purchase for goods from China. By comparison, Visa processed $14.2 trillion in payments in the 12 months ending September.
“It’s still early stage. I think the potential of what this can do is enormous,” said Feagin, a former Goldman Sachs investment banker who joined Ant in 2016.
Overseas Tentacles
Once controlled by Alibaba founder Jack Ma, Ant Group has long operated the Alipay app used by Chinese consumers. Alipay is one of the two dominant payment apps in China, the other being Tencent Holdings’ WeChat Pay. Alipay also lets users invest in mutual funds and other financial products, as well as take out short-term consumer loans, and it offers perks such as coupons.
Ant began spreading its tentacles overseas in the mid-2010s, when Ant and Alibaba invested in Indian mobile payment startup Paytm and started sending engineers to India to help the fledgling company build its technology. That approach expanded to around a dozen countries across Asia, where Ant invested as a significant minority shareholder in local mobile payment apps, then passed on its expertise to help scale up the business.
Those investments came in handy in 2020, when Ant launched Alipay+, which acts as a digital intermediary between points of sale and payment processors such as banks, for the use of digital wallets.
Most of the digital wallets Ant had invested in joined. So did two dozen others that had no financial relationship with Ant, including SoftBank Group subsidiary PayPay in Japan and OCBC, a leading bank in Singapore and Southeast Asia.
In Thailand, where only 10 million of the 70 million people have credit cards, Ant has invested in the country’s top digital payment app, TrueMoney. The Alipay+ network lets TrueMoney users spend money when traveling to destinations popular with Thai tourists, such as China, Japan and South Korea.
“We’re lucky to have Ant as our investor because they are not just investing in money. They also share technology and the practice of what worked well in the China market,” said Monsinee Nakapanant, co-president of Ascend Money, the parent company of TrueMoney. Nakapanant added that Ant also helped TrueMoney build the credit algorithms for its consumer lending program, which managed to keep the default rate at 1.8%, similar to those for consumer loans from banks in the country.
Alipay+ charges merchants a fee to process transactions through its network, then passes part of the fee to its wallet partners, similar to how Visa and Mastercard charge the individual banks that issue their name-bearing credit cards and the merchants using their payment rails. But unlike the Visa and Mastercard credit card networks, which are popular mostly in the developed world, the digital wallets Alipay+ connects are predominantly based on QR codes, a prevalent form of payment in Asia and parts of Europe and the Middle East.
These wallets typically have QR codes for spending and receiving funds, and depending on the services offered in their own countries, users can choose how to top up their funds, through offline cash deposit, debit cards or even sometimes credit cards.
QR-code based payments are popular in developing economies because they allow merchants there, especially mom-and-pop shops, to accept and process payments more cheaply than credit card payment systems. Alipay+ has added tap-and-pay features as an option for wallet users in South Korea, Philippines and Hong Kong, who can now tap and pay merchants accepting Mastercard worldwide.
In the U.S., Ant International is for the time being focused on working with local partners to ensure Asian tourists visiting America can use their digital wallets when buying things from U.S. merchants, according to Feagin. “We’re not going to serve domestic payment solutions in the U.S. If any of the wallets in the US want to utilize Alipay+, we’re open to that,” he said.
The company is also in early-stage discussions to connect with PayPal World, an international payment platform PayPal launched last year, according to two people with direct knowledge of that development. This platform integrates WeChat Pay, India’s Unified Payments Interface and Mercado Pago, popular in Latin America.
OpenAI Preps Personal Health Features in ChatGPT
The Takeaway
- OpenAI developing ChatGPT features that analyze wearable data for personalized health suggestions.
- OpenAI says more than 40 million people use ChatGPT for health purposes daily.
- People also use the chatbot to help diagnose illnesses and handle issues involving medical insurance claims.
In its push to make ChatGPT a “personal super assistant” and stay ahead of rivals, OpenAI is developing new features that aim to turn the chatbot into a personal health hub.
One feature would let people use ChatGPT to analyze data contained in their personal health apps and wearable devices, such as an Oura ring, Apple Watch or Whoop bracelet, according to two people who have seen designs for the feature. The new health hub could appear as a tab in ChatGPT alongside those for images or apps, one of them said. (Update: After The Information requested a comment from OpenAI about the unannounced initiative, the company published a blog post about it.)
Armed with such information, the chatbot could proactively suggest personalized workout routines or other changes people can make to improve their metrics involving sleep, glucose or other health indicators, these people said.
The move puts OpenAI in good company, as almost every major technology firm has tried its hand in creating personal health features and devices, with mixed success.
Perhaps the most prominent example is Apple Health, an iPhone app that brings together data about a customer’s daily step count and other information, such as sleep data from devices, heart-rate trends from a smartwatch, menstrual-cycle tracking, and lab results from connected providers. It consolidates those readings into one place but doesn’t interpret the data with AI the way ChatGPT does.
ChatGPT is already a major provider of health-related answers to consumers, and people often upload blood and other medical test-result documents and scans to get medication and other recommendations they could suggest to their doctors. For instance, the chatbot can sometimes figure out that the medication or supplements people take are aggravating certain conditions noted in their blood labs. (The chatbot ocassionally make mistakes in its answers, and some of its advice can be dangerous.)
People also use the chatbot to analyze and respond to medical insurance denials and to scrutinize itemized bills. People can ask the chatbot to develop personalized food and exercise plans.
ChatGPT can handle such tasks because the models powering it were trained in part on health information and have been reviewed by physicians as part of the AI post-training process, to improve the way it answers health questions. Plus, the mounds of health documents people have willingly uploaded to the chatbot also could help it train new models.
The company says more than 40 million people use ChatGPT for health purposes daily. That’s in line with a study it published in September showing that 5.7% messages in ChatGPT related to health, fitness or self-care.
Still, consumers don’t appear to understand the full range of topics the chatbot can answer questions about, including about health, which limits how much time they spend using it. Convincing more people to share their health information with the chatbot could make it harder for rivals like Google to lure them away to competing chatbots. OpenAI has been in the midst of a ‘code red’ effort to put more employee resources toward improving ChatGPT to stave off competitors.
While ChatGPT cannot replace a human doctor, it has scored well on medical licensing exam-type questions and the chatbot is a font of ideas for improving health and can spot trends or patterns in health data that individual doctors may not recognize.
The new ChatGPT health features appear to be part of OpenAI apps chief Fidji Simo’s recent vow to make ChatGPT “understand your goals, remember context over time, and proactively help you make progress across the things that matter most,” shifting from “a reactive chatbot to a more intuitive product connected to all the important people and services in your life.”
When she joined OpenAI last year, she said she was “most excited for the breakthroughs that AI will generate in healthcare.”
It’s not clear when OpenAI is planning to release the new health features, but its health ambitions are aimed at reaching a broader audience than just consumers. There are signs OpenAI also wants to attract health professionals. In June last year, OpenAI tapped Nate Gross, cofounder and former chief strategy officer of physician social network Doximity, to lead its healthcare strategy, including helping doctors and other health professionals use OpenAI products.
In July, OpenAI said a Kenyan health provider reduced errors by giving clinicians access to an OpenAI-powered assistant to help their diagnoses and treatment. (Meanwhile, OpenAI has watched revenue surge at another startup, OpenEvidence, that develops an AI tool physicians use to find answers to their questions or to analyze peer-reviewed studies.)
And in August, the company hired Ashley Alexander, then Instagram’s co-head of product, to become its vice president of health products, with the goal of improving “healthcare outcomes and access.”
Gapping down
In reaction to earnings/guidance:
In reaction to earnings/guidance:
- APOG -10.9% (also, CFO resigns), MSM -1.1%
Other news:
- DRUG -6.7% ($100 mln stock offering)
- COMP -6.4% (to offer $750.0 million in aggregate principal amount of convertible senior notes due 2031)
- STNE -6% (new CEO)
- ARWR -2.7% (plans $500 million convertible notes offering alongside $200 million common stock sale)
- BBOT -1.9% (New Clinical Data Advancing Its Portfolio of Three Innovative and Differentiated RAS and PI3Ka Pipeline Programs)
- TXG -1.6% (CareDx and 10x Genomics (TXG) to launch ImmuneScape program -- A multiomics research platform to decode transplant rejection and drug response)
- ACET -1.6% (Provides Corporate Update and Highlights Expected 2026 Milestones)
- PRAX -1.4% (prices offering of 2,212,000 shares of its common stock at $260.00 per share)
- SKT -0.9% ($200 mln exchangeable notes offering)
- WBD -0.8% (Warner Bros. Discovery Board of directors unanimously recommends shareholders reject amended Paramount (PSKY) tender offer)
Gapping up
In reaction to earnings/guidance:
In reaction to earnings/guidance:
- UMC +9% (Dec revs), AIR +4.1%, PENG +3.9%, KMDA +3% (guidance), PSQH +1.8% (announces leadership updates and preliminary Q4 revenue above guidance)
Other news:
- VTYX +58.6% (LLY in advanced talks to acquire VTYX according to WSJ)
- GLUE +28.4% (to present interim MRT-8102 Phase 1 study results)
- MBLY +10.5% (to acquire Mentee Robotics)
- EGHT +5.2% (acquires Maven Lab to expand APAC customer engagement capabilities)
- CMPS +5.2% (FDA acceptance of IND application for PTSD and hosts webinar on PTSD and TRD)
- ALMS +4.7% (commences $175 mln stock offering)
- MSTR +4.4% (MSCI announces it will not exclude digital asset treasury cos from MSCI Indexes)
- CRNX +4% (prices offering of 7.62 mln shares of common stock at $45.95 per share)
- RZLT +3.7% (announced further insights into the sunRIZE trial; plans to meet with FDA to align on path forward for congenital HI)
- AZ +3.3% (authorizes $20 million share repurchase program)
- LGIH +3.1% (reports 4,788 home closings in 2025)
- GME +2.7% (announces long-term performance award for Ryan Cohen; award incentivizes growth to a market capitalization of $100 billion, aligning compensation directly with stockholder returns)
- HIVE +2.6% (reports strong December production growth and maintains over 2% of global Bitcoin network)
- FFAI +2.4% (Announces Stockholders' Day Save the Date for January 7)
- HCM +1.8% (reports topline results of Phase III Part of ESLIM-02 Trial of Sovleplenib for warm antibody autoimmune hemolytic anemia in China)
- EVRG +1.7% (partial repurchase of 4.50% Convertible Notes due 2027)
- TTEK +1.6% (names new CEO)
- CDNA +1.6% (CareDx and 10x Genomics (TXG) to launch ImmuneScape program -- A multiomics research platform to decode transplant rejection and drug response)
- MUR +1.5% (achieves appraisal success at Hai Su Vang Field; reaffirms 2026 CAPEX guidance)
- DRS +1.4% (names new COO)
- ABX +1.3% (launches asset-based finance strategy)
- RAPP +1.2% (accelerated initiation of RAP-219 Phase 3 program)
Big Pharma race to snap up biotech assets as $170 billion patent cliff looms
- 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.