1. Patent cliff drives M&A urgency: With over $300 billion in branded drug sales at risk by 2030, pharma giants are racing to secure future revenue through targeted acquisitions and partnerships. The pace of dealmaking has accelerated, with 2025 already seeing multi-billion-dollar buys in mental health, oncology, and rare diseases. Companies are also divesting non-core assets and doubling down on high-potential therapy areas to weather the loss of exclusivity.
2. AI transforms drug discovery and development: AI is now central to pharma R&D, with an estimated 30% of new drugs in 2025 discovered using AI platforms. These technologies are slashing discovery costs, accelerating timelines, and enabling personalized medicine at scale. AI-driven platforms are projected to generate up to $410 billion in annual value for the sector by 2025, with applications spanning drug design, clinical trials, and supply chain optimization.
3. Portfolio evolution and novel modalities: Pharma pipelines are evolving rapidly, with companies prioritizing novel modalities, such as fusion proteins, multispecific antibodies, and RNA-based therapies to address high unmet needs. Firms are focusing beyond traditional strongholds like oncology and immunology, expanding into areas like Alzheimer’s, obesity, and cardiovascular disease. This shift is reflected in both R&D investment and acquisition targets.
4. China’s biotech boom and global partnerships: Chinese-origin assets are expected to account for nearly 40% of global licensing deals in 2025, underscoring China’s emergence as a biopharma innovation powerhouse. US and European firms are increasingly partnering with Chinese biotechs to access new science, diversify pipelines, and accelerate market entry.
5. GLP-1s and therapeutic blockbusters reshape the market: GLP-1 drugs, initially developed for diabetes and now used for obesity and other conditions, are projected to account for nearly 9% of global drug sales by 2030. Their broadening indications are disrupting adjacent markets, from medical devices to surgical procedures, and fueling intense competition for market share.
6. R&D productivity and regulatory headwinds: Declining R&D productivity and complex global regulations remain core challenges. Companies are rethinking development strategies, integrating generative AI and advanced analytics to boost innovation returns. Meanwhile, policy shifts, especially in the US are impacting pricing, exclusivity periods, and deal structures, compelling firms to adapt quickly.
7. Patient-centric innovation and digital health: Telehealth, wearables, and home care technologies are empowering patients and reducing environmental impact. Pharma companies are investing in digital health partnerships and data-driven engagement to improve outcomes, personalize care, and differentiate in a crowded market.
