It may feel odd to talk about signs of spring while the leaves outside have turned rusty and fallen to the ground, but that’s exactly what we are seeing in the markets – early signs of life. This time it’s Stifel’s Tim Opler who has noted a shifting sentiment over the past six months. The phrase “cautiously optimistic” has been replaced by something far more upbeat: “enthusiastic.”
M&A and licensing deals are gaining momentum at a high pace and the fact is: if it continues like this, 2025 could be the third strongest M&A year in biotech so far - and that without us having seen any deals over 15 billion USD, yet.
The last thing not said about Metsera
The big question is where the bidding war over Metsera will ultimately land. It did not take long after Pfizer raised its offer for Novo to counter – almost as if the Danish pharma giant had set up an auto-bid, eBay-style. For now, the official top bid stands at around USD 10 billion.
Metsera’s clinical data has been highly encouraging, positioning the company as a strong contender to Eli Lilly, which is tightening its grip on the obesity throne. In the third quarter alone, tirzepatide generated over USD 10 billion in sales, overtaking Keytruda as the world’s best-selling drug.
But this battle is about more than just Pfizer versus Novo. It serves as a timely reminder that big pharma faces an urgent need to replenish its pipelines ahead of looming patent expirations. That means M&A activity is likely to remain strong – which, in turn, should continue to propel biotech forward.
The generalists have woken up
Investors appear to be catching on. The capital markets have improved significantly, a trend evident both in the Nordics and internationally. According to Opler, there is reason to believe this momentum will persist. It seems that generalist investors – who moved away from biotech during tougher times – are now stepping back in.
- We spoke to one aggregator of biotech capital last Friday who indicated that last week he was being offered investment money from ‘all sorts of places’ around the world and worried that there was no place to put it, Opler notes.
Biotech outpacing tech
A quick look at the indices tells the story: the XBI biotech index has outperformed the Nasdaq Composite over the past six months – event midst the ongoing AI frenzy. XBI has gained just over 40 per cent compared with Nasdaq’s roughly 30 per cent.
In other words, there’s a clear “risk-on” tone in the market – the kind of environment essential for capital to keep flowing into high-risk, high-reward sectors like biotech. And once that flow starts, it is hard to stop. Few forces are as powerful as an investor crowd gripped by FOMO – fear of missing out.
Kim Liedholm
Editor
