Pharmaceutical M&A in UK at standstill, biotech industry flourishes in 2025

In 2025, the UK’s healthcare mergers and acquisitions landscape saw a significant shift, with pharma and life sciences accounting for 21% of transactions, down from 27% in the previous year. An analysis by Heligan Healthcare reveals that the year was marked by a sense of caution rather than rapid expansion, especially for British assets seeking overseas buyers.

Describing the year as one of resilience, Ramesh Jassal, Partner of Corporate Finance at Heligan Group, pointed out several factors contributing to this trend. These included a wary investment environment, selective private equity sentiment, and uncertainty surrounding US policy. Despite these challenges, the healthcare sector displayed remarkable strength, holding steady with 280 transactions while overall UK dealmaking saw a decline of 10–15%. Healthcare outperformed other industries like technology, consumer goods, and industrials, which experienced a drop in deal activity in the low double digits.

One interesting driver of UK healthcare deals was found in the biopharma and biotechnology sectors, which collectively made up 35% of all transactions. Acquirers were keen on acquiring access to cutting-edge drug pipelines encompassing cell and gene therapies, advanced biologics, and other specialized technologies. Some notable acquisitions in this area included AstraZeneca’s £774.2m purchase of EsoBiotec, an in vivo cell therapy technology firm, in May, and Sanofi’s £1.2bn takeover of Vicebio, a respiratory vaccine biotech company, in July.

Looking ahead to 2026, Heligan predicts that buyers will prioritize assets with high technical complexity, capabilities in high-spec manufacturing, gene therapies, and advanced analytics. Businesses with recurring revenues from service-based platforms are also expected to garner interest as investors seek more predictable returns. In the UK, a supportive fiscal environment could further bolster results, especially within the biotech sector. Commitments like the £520m Life Sciences Innovative Manufacturing Fund, £86bn in R&D funding, and ongoing access to Horizon Europe are anticipated to sustain activity, making companies more resilient to cost pressures and desirable targets in a competitive investment landscape.