Pharma deal fever boosts flurry of highly complex mergers
Concerns over competition and patents add to legal challenges
Deal fever has returned to the pharmaceutical industry as big drugmakers snap up smaller rivals to stave off a looming “patent cliff”, prompting a demand for high-level legal support.
Robert Darwin, partner at law firm Sidley Austin, notes that lawyers perform key functions in M&A deals such as: verifying the condition of assets; helping clients assess, understand and manage regulatory and litigation risks; negotiating and solving problems. The role of an M&A lawyer, he argues, is like an aircraft engineer’s. “It’s just that they ensure deals land smoothly, instead of aircraft.”
Large drugmakers have been spurred on to the acquisition trail by forthcoming patent expiries, a recurring feature in the pharmaceutical industry that allows generic manufacturers to swoop in and produce cheaper versions of top-selling products.
US investment firm Stifel, for instance, estimates that the number of biotechs acquired for at least $1bn in 2026 so far has already surpassed 2025’s record of 35 deals for the whole year.
BioNTech’s acquisition of its smaller rival CureVac was among 2025’s crop of significant deals. The two biotech companies had spent several years duelling in public.
First, it was over which of the German companies would win the race to develop the first mRNA vaccine during the Covid-19 pandemic. BioNTech decisively won that contest in December 2020 as part of a partnership with US giant Pfizer that raked in billions of dollars and helped curb the spread of the virus.
CureVac’s Covid-19 vaccine trial, meanwhile, ended in disappointment, halving the company’s share price on news that its jab failed to reach the cut-off efficacy level needed to secure regulatory approval.
The competition went up a gear two years later when CureVac launched a lawsuit accusing its rival of infringing on its patent in the development of the successful Covid-19 vaccine with Pfizer. CureVac said at the time that it was seeking “fair compensation” for what it said was copyright infringement by BioNTech.
So it marked a dramatic shift in their relationship in 2025 when BioNTech and CureVac announced they were joining forces. BioNTech acquired its rival for $1.25bn in an all-stock deal, part of a change in strategy to focus primarily on the development of mRNA therapies for cancer treatment after the threat of the Covid virus receded. CureVac had sold its influenza and Covid-19 vaccine programme to Britain’s GSK in 2024.
The BioNTech-CureVac deal, which took about 12 months to close, was complex. Sibel Yilmaz, a Brussels-based partner at law firm Covington, which advised BioNTech, says her team worked on assessing the feasibility of the deal. Questions included whether there were overlaps between the two companies’ development programmes or technologies that were complementary, either of which could raise competition concerns among regulators.
Both companies had similar mRNA technology and cancer vaccines in development, Yilmaz explains, adding that regulators want to promote competition in a sector and do not like deals that concentrate market power in the hands of a single entity.
Regulators also questioned whether BioNTech was looking to gobble up its competitor because of the lawsuit for copyright infringement.
BioNTech agreed to pay $370mn to CureVac to settle the patent litigation in the US. Yilmaz says GSK’s licensing agreement with CureVac may have helped authorities to become more comfortable with the settlement of the litigation. “Having GSK involved also helped,” Yilmaz says. “[GSK is] not a small company [that] couldn’t say no if they didn’t like it.”
BioNTech was also able to prove, using internal documents, that this was not a deal to pick off a competitor, Yilmaz says, but adds that the process “was very complicated”.
Lawyers were similarly challenged by Merck’s acquisition of US biotech SpringWorks Therapeutics for an equity value of $3.9bn last year. German drugmaker Merck said at the time that the acquisition would help it establish a “leadership position in rare tumours” and help its US expansion goals.
Florian Späth, a Germany-based partner at US firm Sullivan & Cromwell, worked on the deal on behalf of German drugmaker Merck. Early media reports on the deal prompted a sharp increase in the share price of SpringWorks that was beyond the price Merck was offering. As a result of the leaks, Sullivan & Cromwell teams across Germany and the US quickly had to navigate capital market disclosure laws in both countries to comply with transparency requirements for listed companies, Späth explains. The cross-border nature of the transaction also made it more complex.
Legal teams on pharma deals also need to acquire in-depth knowledge of the companies’ drugs and drug pipelines. For example, had Merck’s due diligence team discovered any problems with Nirogacestat, that could have put a spanner in the works. The tumour-treating drug had been approved in the US at the time of the acquisition but not in the EU.
Sullivan & Cromwell had to advise on how to structure the transaction to accommodate the lack of EU approval, and do so in a way that would comply with antitrust regulations. Nirogacestat has since been approved in the EU. “The pharma side of due diligence is mission critical for these kinds of exercises,” Späth says.