Big Pharma race to snap up biotech assets as $170 billion patent cliff

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…