Under the Microscope
Next week is the biggest week on the biotech calendar.
It is JP Morgan Healthcare week, the largest industry conference of the year.
This week has long served as a beacon for investment direction and a barometer of sentiment.
I spoke with the CEO of Chimeric (ASX: CHM) this morning, who is at JPM Healthcare, and let’s just say biotech sentiment is very strong.
25,000+ professions, 1,500+ companies, M&A deals, new data, and massive attention on biotechs.
Even before the conference started, there have been a number of M&A and licencing deals announced this year:
Amgen has partnered with Germany’s Disco Pharma to develop cancer therapeutics using Disco’s surface-mapping technology. US$618 million.
Amgen acquires UK-based cancer drug discovery platform Dark Blue Therapeutics for US$840 million.
Eli Lilly partners with InduPro on its AI-based discovery platform for next-gen cancer treatments. US$950 million.
Eli Lilly and Nimbus Therapeutics partner on preclinical oral obesity drug. US$55M upfront, US$1.3 billion in milestones.
Eli Lilly to acquire Ventyx Bioscience for US$1.2 billion all cash deal.
Pfizer and Cartography Biosciences partner on tumour-selective antigen discovery. US$65 million upfront, US$850 million in milestones.
U.K. biotech Ikarovec has partnered with VectorBuilder to develop an eye disease gene therapy. Deal worth up to US$1 billion.
AbbVie signs a licencing deal for the ex-China rights for a small cell lung cancer treatment from Zeglen Biopharmaceuticals. US$100 million upfront, US$1 billion in milestones.
AriBio, Fosun Pharma and Newcopharma partner for Alzheimer's treatment in US$436 million deal.
… and this is just 9 days into 2026.
The trickle-down effect is that earlier-stage US and European companies are finding it easier to raise large amounts of capital, as investors know the M&A window is wide open.
Australia generally lags the US by 6 months, and I think it is only a matter of time before big pharma takes a closer look at the promising developments on this side of the world.
A rising tide lifts all ships.
So if a few larger ASX-listed biotechs can get M&A and licencing deals done (key external validation of the company’s science and prospects)... investors will look to take bets on smaller, earlier-stage companies.
This is a very good thing and should spur a wave of capital inflows into the sector.
I’ve said it before, but I’ll say it again, and again and again…
2026 will be a big year for biotechs.
It’s no secret that Big Pharma is facing one of the largest patent cliffs of all time.
Over $170 billion in annual drug sales is set to come off exclusivity in the next few years.
When drugs lose exclusivity, it paves the way for the entry of cheaper generic alternatives, leading to an 80% reduction of market share just within the first year.
So all of those juice revenue dollars that drive shareholder returns for Big Pharma are about to evaporate…
Just, like, that.
It takes ~10 years to bring a drug from discovery to market, so the fastest way for big pharma to replenish its revenue pipeline is to acquire.
(Generally, companies at Phase 2 or Phase 3 of development).
That’s why 2025 was one of the biggest years for M&A in a long time, and why 2026 is set to be even bigger.
Last year, the biggest deal of 2025 was J&J’s $14.6 billion acquisition of Intra-Cellular.
… announced at the JPM Healthcare:
So what will happen this year? I’m looking forward to finding out.
Outside of M&A, there are a number of other thematics that I’m watching closely:
Obesity: The number 1 topic in big pharma right now. Novo Nordisk just had its oral obesity drug, and Eli Lilly’s Retatrutide tops the 2026 list of drugs to watch.
AI in Healthcare: AI for drug discovery, clinical trial optimisation, personalised treatment, and early disease diagnosis are rapidly spreading. Expect this to be a big talking point for the conference.
The China inflection point: China continues to emerge as a defining strategic priority for many drug companies, not just for manufacturing, but also for scientific innovation. Expect more M&A deals between US companies and Chinese drug developers.
… also, oncology, drug delivery mechanisms, rare diseases, and navigating the FDA should be key topics for the conference.
Are you ready? The biggest week of the year starts next Monday.
See you all next week.
The Armchair Analyst
The Daily Pulse Check
Yesterday after I published, Nyrada (ASX: NYR | MC: $333M) announced that it had secured human ethics approval for its Phase 2a study in patients with heart attacks. (NYR)
🪑 NYR was the best-performing stock of 2025 in the healthcare sector… will be interesting to see if it can back up this rise with phase 2 efficacy results.
Recruitment starts in March; the trial is expected to take 9 to 18 months.
Mesoblast (ASX: MSB | MC: $3.8B) announced gross sales for its Ryoncil stem cell drug for the December quarter: US$35 million. (MSB)
Neuroscientific Biopharmaceuticals (ASX: NSB | MC: $38M) went into a trading halt for results from its special access program clinical trial on its stem cell product. (NSB)
🪑 These results are a big catalyst for NSB, and it will be interesting to see what data they can produce.
Very quiet day today with all eyes on JPM next week, so here are a couple of things I’ve been reading that have piqued my interest:
History of Viagra’s Generic Cliff: Why It Wasn’t a Free-for-All (Drug Patent Watch)
🪑 Read through this when I was doing my research on LTP for my Investment Memo next week. Very interesting story.
We are entering into the era of the AI Doctor: (Second Opinion)
Clarivate published its “Drugs to Watch” in 2026: (Clarivate)
M&A, Big Pharma Wants a Wife
Eli Lilly partners with InduPro on its AI-based discovery platform for next-gen cancer treatments. US$950 million. (Fierce Pharma)
Amgen has partnered with Germany’s Disco Pharma to develop cancer therapeutics using Disco’s surface-mapping technology. US$618 million. (Fierce Biotech)
Eli Lilly to acquire Ventyx Bioscience for an oral small-molecule that has a focus on inflammatory and immune-mediated diseases. US$1.2 billion all-cash deal. (Eli Lilly)
