What began as a series of demand letters in July 2025 has evolved into something significantly more consequential. By February 2026, sixteen of the seventeen largest pharmaceutical manufacturers have signed Most-Favored-Nation (MFN) pricing agreements with the Trump administration, which commit them to Medicaid price parity, MFN pricing on new product launches, and participation in TrumpRx.gov in exchange for three-year tariff immunity and improved regulatory positioning. But as those voluntary deals settle, the Centers for Medicare & Medicaid Services (CMS) has moved to make MFN pricing mandatory for Medicare through two new models: GLOBE (Medicare Part B) and GUARD (Medicare Part D), both published in the Federal Register on December 23, 2025, with a public comment period that closed on February 23, 2026.
2026 Life Sciences Industry Outlook: Capital Markets
Welcome to Part 2 of our 2026 Life Sciences Industry Outlook series. Today, we are focusing on life sciences capital markets activity in 2025 and expectations for 2026.
The life sciences equity capital markets in 2025 were defined by a stark “tale of two halves,” beginning with intense volatility that effectively shuttered deal activity. The first half of the year was marred by significant market uncertainty, particularly following the “Liberation Day” tariff announcements. This event, combined with regulatory upheaval caused major indices like the XBI and Nasdaq to slide. During this period, the capital markets lay dormant—April saw zero priced biotech IPOs and only four priced follow-on deals, three of which were registered directs.
2026 Life Sciences Industry Outlook: Mergers and Acquisitions
Welcome to Part 1 of our 2026 Life Sciences Industry Outlook series. We are kicking off the week with a look at life sciences M&A activity in 2025 and what it may signal for 2026.
M&A activity in 2025 accelerated sharply, marking one of the busiest years on record. Aggregate deal value and the number of announced transactions rose meaningfully from 2024, buoyed by marginally improving financing conditions, greater boardroom confidence, and clearer regulatory expectations in the second half of the year. Mega-cap and upper‑mid‑market deals returned alongside a still‑healthy cadence of bolt‑on acquisitions and other smaller transactions by companies focused on incremental pipeline enhancements and portfolio gaps. Therapeutically, 2025 activity remained anchored beyond traditional oncology into cardio-metabolic (including obesity-adjacent assets) and neuroscience/CNS, while radiopharmaceuticals continued to command strategic interest and autoimmune/immunology remained a steady source of durable, de-risked, later-stage pipeline reinforcements.
Introducing Our 2026 Life Sciences Industry Outlook Series
As the life sciences industry kicks off the new year and convenes at the JP Morgan Healthcare Conference this week, we are launching a weeklong Biotech Briefings series highlighting key insights from our 2026 Life Sciences Industry Outlook. Following a pivotal year in which deal activity accelerated and capital markets reopened selectively, the industry enters 2026 with cautious optimism—and a sharper focus on execution.
Throughout the week, we will explore the trends shaping life sciences dealmaking and financing in the year ahead, with posts focused on mergers and acquisitions, capital markets, royalty finance, collaborations and licensing, and the evolving regulatory environment. Together, these perspectives reflect a market characterized by renewed strategic conviction, disciplined capital deployment, and increasing structural sophistication.
We look forward to sharing our views on what biotech executives, investors, and strategic partners should be watching as 2026 unfolds.
M&A Thirty Days into the Government Shutdown: First Transaction to Close That Launched During the Shutdown
Thirty days into the U.S. government shutdown, most federal agencies are operating with only “essential” personnel. The SEC and FTC are running with minimal staffing, authorized to take only limited actions. At the SEC, no registration statements have been declared effective since the shutdown began, and a backlog of more than 1,000 filings is expected to await review once operations resume.
Trump’s 100% Pharma Tariffs: Manageable for Large Pharma; Challenging for Biotechs
On September 25, 2025, President Trump announced 100% tariffs on imported branded or patented pharmaceuticals, effective October 1, 2025, unless the importing company is building U.S. manufacturing capacity (defined in President Trump’s announcement as “breaking ground and/or under construction”). The policy is being advanced under Section 232 “national security” authority.
Getting Ready for Your Q2 Quarterly Reports: Trends in Biopharmaceutical Disclosures from Q1 Quarterly Reports
Earlier this year, the new Presidential Administration introduced a series of policies, legislative proposals and regulatory actions that have impacted the business and regulatory environment and contributed to a climate of uncertainty—particularly in the biopharmaceutical sector. These developments gave companies much to address in their first quarter 10-Q filings. To shed light on how biopharmaceutical companies addressed these developments, we conducted a survey of the Q1 Quarterly Reports of the top 100 biopharmaceutical companies. Our analysis revealed that most companies are actively assessing the potential impact of these changes, with more than two-thirds (68%) of companies updating their risk factors and more than half (53%) updating their Management’s Discussion & Analysis (MD&A) accordingly. Below is a summary of the key disclosure changes, with a focus on topics of heightened relevance to the industry—including tariffs, changes in laws related to Medicaid or Medicare, federal workforce disruptions and other issues such as the Section 232 investigation and the Section 340B Drug Pricing Program.
Q2 2025: Life Sciences Capital Markets Recap
Despite positive momentum in the life sciences capital markets throughout 2024 and expectations for increased favorability in both public and private investment avenues in 2025, the second quarter of 2025 continued a trend of subdued activity for the sector. As of mid-2025, life sciences companies continue to navigate a challenging financing environment, as evidenced by the statistics below and against a backdrop of the XBI and BBC both suffering moderate declines while the broader market is up 8% for the year. In the public markets, public equity capital remains scarce and issuers are heavily favoring confidential offerings to mitigate market and execution risk following key clinical read-outs. In the private markets, venture capital investors remain selective and are favoring de-risked, later-stage assets, while smaller, early-stage companies are continuing to weather an extended “biotech winter”.
Is There a Duty to Disclose FDA Feedback?
The Trustees of Welfare & Pension Funds of Local 464A – Pension Fund v. Medtronic PLC, 726 F. Supp. 3d 938 (D. Minn. 2024).
Case Highlights
On March 28, 2024, a federal district court held that positive statements about the prospect of U.S. Food and Drug Administration (FDA) approval of a company’s latest product were not sufficiently alleged to be false or misleading even though the company did not disclose that it had received a Form 483—a form issued by the FDA following an inspection that lists objectionable conditions an investigator believes violate the Food, Drug, and Cosmetic Act and other related acts.
National Venture Capital Association Addresses “Shadow Trading” Concerns Summer Updates to Form of CDA and Model PIPE Documents
The National Venture Capital Association (NVCA) has continued its commitment to standardizing venture financing documents by incorporating new language into its form confidential disclosure agreement (CDA) aimed at addressing the emerging “shadow trading” issue in light of the SEC v. Panuwat case. This update should help to standardize shadow trading carveouts in CDAs, which have initially varied in their adoption and have sometimes been met with resistance by counterparties based on a misunderstanding of the Panuwat holding.
Potential Impacts of Most-Favored-Nation Executive Order on Ex-US License Agreements
Introduction
On May 12, 2025, President Donald Trump signed an Executive Order titled “Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients”. This order aims to address the perceived imbalance where the United States funds a significant portion of global pharmaceutical profits and pays high prices, while drug manufacturers offer deep discounts to access foreign markets, subsidizing those lower prices through higher prices in the United States. The stated purpose of the Executive Order is to ensure that Americans are not forced to pay almost three times more for the same medicines and have access to the most-favored-nation (MFN) price.
“Deal Lawyers Download” Podcast: Shell Companies and Reverse Mergers
Listen to Ryan Murr, Branden Berns, and James Moloney discuss reverse mergers and how recent actions by the SEC have influenced the ways that reverse mergers are structured and the implications of those actions for those companies considering a reverse merger on the “Deal Lawyers Download” podcast produced by DealLawyers.com.
Listen here (subscription required).
Missed PDUFA Targets: Context, Concerns, and the Case of Stealth BioTherapeutics
The FDA’s commitment to timely drug approvals under the Prescription Drug User Fee Act (PDUFA) has been a cornerstone of its regulatory framework. Historically, the agency has maintained a high success rate in meeting its PDUFA goals; however, a handful of delays will typically occur each year for largely idiosyncratic reasons. Since 2021, when the FDA experienced delays due to challenges during the COVID-19 pandemic, the FDA has generally met or exceeded 90% of its review performance goals for new drug applications (NDAs) and biologics license applications (BLAs). However, recent regulatory upheaval at the FDA has prompted discussions of a potential decline in the previously reliable response rates and the implications for biotech companies and patients awaiting new therapies.
The Current Landscape of Reverse Mergers: An In-Depth Analysis and Q&A
Branden Berns and Ryan Murr are the authors of “The Current Landscape of Reverse Mergers: An In-Depth Analysis and Q&A” [PDF] published by DealLawyers.com on April 2, 2025.
Opening the Window for S-3 Effectiveness Post-10-K Filing
It’s a tale as old as time for many small- and mid-cap biotech companies…you file a new Form S-3 shelf registration statement in connection with your Form 10-K filing in late February or March and are eager to do a shelf takedown after some promising investor meetings. The SEC confirms that it is not reviewing the Form S-3 and you are able to go effective, but wait! As a non-WKSI, you must have your proxy information on file (either through Part III of your Form 10-K or by filing your proxy within 120 days of year end) in order to take your Form S-3 effective and begin using the shelf. Companies have historically had three choices to resolve this dilemma: (i) quickly pull together a Form 10-K/A to include Part III information in the Form 10-K filing, (ii) accelerate the proxy filing timing or (iii) wait until the proxy is on file. Options (i) and (ii) will put unwanted pressure on the legal and finance teams and under option (iii) each passing day could mean the difference between an equity raise and losing interested investors.
Life Sciences Securities Litigation Insights: Even Marketing Materials Can Subject Issuers to Securities Fraud Claim
Case Highlights:
On May 7, 2024, a federal district court dismissed securities fraud claims brought against a pharmaceutical company related to a marketing slogan used to promote the company’s drug. At issue in Sneed v. AcelRx Pharms., Inc. (“Sneed”)[1], was AcelRx Pharmaceuticals, Inc.’s (“AcelRx”) marketing slogan, “Tongue and Done,” used to promote its FDA-approved drug DSUVIA, an opioid painkiller. AcelRx had presented the “Tongue and Done” slogan on its website, among other places, to highlight the ease of administering DSUVIA (i.e., sublingually) compared to other opioid painkillers, which are administered either orally (which requires a patient’s ability to swallow) or via intravenous injection.
Key Takeaways: Life Sciences 2025 Outlook: Capital Markets Webcast (March 19)
Melanie Neary, Branden Berns, and Ryan Murr of Gibson Dunn, along with Bud O’Hara of Jefferies, hosted a Life Sciences 2025 Outlook: Capital Markets webcast on Wednesday, March 19, 2025, breaking down capital market trends, deal activity, and industry expectations for life sciences in 2025.
SEC Expands Confidential Submission for Form S-1 Filings: New Rules Enhance Fundraising Options for Life Sciences Companies
The Securities and Exchange Commission (SEC) has expanded confidential submission privileges for Form S-1 filings, benefiting many life sciences companies. As of March 3, 2025, public companies, including those that became public through reverse mergers and those subject to “baby shelf” limitations, can now submit draft registration statements for confidential review.
Join us: Life Sciences 2025 Outlook: Capital Markets Webcast (March 19)
You’re invited! Please join Ryan Murr, Branden Berns and Melanie Neary of Gibson Dunn and Bud O’Hara of Jefferies for a Life Sciences 2025 Outlook: Capital Markets webcast on Wednesday, March 19 from 1 – 1:45 pm ET / 10 – 10:45 am PT. We will provide an integrated outlook on capital markets in the life sciences industry, identifying trends and uncertainties that will shape the year ahead.
Navigating the Impact of Emergency Tariffs on Biotech Manufacturing with Chinese Counterparties
The recent imposition of emergency tariffs on products from China and Hong Kong has raised significant concerns for biotech companies, particularly those considering or currently engaged in manufacturing contracts with Chinese entities. This post aims to provide an overview of the recent emergency tariffs targeting China and their potential implications for the biotech industry.
Introducing Biotech Briefings
Dear friends and colleagues,
We are excited to introduce Biotech Briefings, providing Gibson Dunn’s commentary and perspectives on the legal, business, and regulatory issues shaping the life sciences industry.
From groundbreaking developments in biopharma, medical devices, and diagnostics to the evolving landscape of IP, FDA and SEC regulation, Biotech Briefings delivers timely insights for companies, investors, and industry stakeholders.
Stay tuned for expert analysis on:
- Key FDA, FTC & SEC developments
- M&A, financing & strategic partnerships
- Market dynamics shaping investment & innovation
We invite you to follow along for actionable insights at the crossroads of law, business, and science.
The Gibson Dunn Life Sciences Team
Life Sciences 2025 Outlook
The life sciences industry is entering 2025 with a largely favorable set of catalysts for the coming year, but also with some larger risks that will impact companies differently.
Executive Email Can Expose Public Companies to Securities Fraud Claim
Pizzuto v. Homology Meds., Inc., No. 1:23-CV-10858, 2024 WL 1436025
(D. Mass. Mar. 31, 2024)
Case Highlight
In a securities fraud action earlier this year, an executive’s statement made in an email to a single research analyst was alleged to be false or misleading. In Pizzuto v. Homology Meds (“Pizzuto”), plaintiffs brought a securities class action complaint against Homology Medicines Inc. (“Homology”), a biopharmaceutical company, alleging that the company’s statements regarding the safety and efficacy of its gene therapy treatment were false and misleading.
Webcast: M&A Insights: Earn-Outs, New HSR and Investment Rules, and Fraud Liability
Join us for a 45-minute briefing covering several M&A practice topics. The program is part of a series of quarterly webcasts designed to provide quick insights into emerging issues and practical advice on how to manage common M&A problems. Steve Glover, a partner in the firm’s Global M&A Practice Group, acts as moderator.
Behind The ‘CVR Spin’ Method Of Unlocking Assets In M&A
San Francisco partner Ryan Murr, Washington, D.C. partner Stephen Glover and San Francisco partner Branden Berns are the authors of “Behind The ‘CVR Spin’ Method Of Unlocking Assets In M&A” [PDF] published by Law360 on March 11, 2024.
Life Sciences Review and Outlook – 2024
This update provides a recap of 2023 highlights for capital markets, M&A activity, royalty finance transactions and clinical funding arrangements, along with expectations for 2024.
The past five years have been particularly tumultuous in the biopharma sector. Strong capital markets and M&A activity into early 2020 were whipsawed during the pandemic, with equity valuations climbing significantly through early 2021 before dropping dramatically through the fourth quarter of 2023.
OpEd: How to Get Value for Non-Core Assets With CVR Spinoffs
Ryan Murr, Stephen Glover and Branden Berns are the authors of “OpEd: How to Get Value for Non-Core Assets With CVR Spinoffs” published by The Deal on March 7, 2024.
Webcast: M&A Insights – How to Use CVRs to Bridge Valuation Gaps, DOJ Self-Disclosure Guidelines for M&A, and Shareholder Activism Update
Join us for a 30-minute briefing covering several M&A practice topics. The program is the fourth in a series of quarterly webcasts designed to provide quick insights into emerging issues and practical advice on how to manage common M&A problems. Stephen Glover, co-chair of the firm’s Global Mergers and Acquisitions Practice, acts as moderator.
Webcast: Raising Capital in the Current Environment V: ATM Programs and Rights Offerings
In the current equity capital markets environment, innovative offerings that avoid massive dilution can be advantageous. ATM offering programs provide public companies an efficient means of raising capital over time by allowing a company to tap into the existing trading market for its shares on an as-and-when-needed basis. Rights offerings allow public companies to raise capital while offering all current shareholders the opportunity to participate equally, thereby allowing each shareholder to avoid objectionable dilution when trading prices are relatively low.