JPM26: Biotech’s M&A lift, the ‘new’ Biogen and Merck’s $70B target

SAN FRANCISCO — Many biopharmaceutical industry deals begin in a meeting room during the annual J.P. Morgan Healthcare conference. Startups lean into networking events and one-on-one conversations, hoping to attract investor interest and pharma partners that can provide cash and needed help bringing their experimental drugs forward. Those conversations may be more fruitful for young biotechnology firms this year. A report published last week by HSBC Innovation Banking showed that biotech venture investments surged in the fourth quarter to their highest totals in three years. During that period, investors shifted from a “conversative” mindset to embracing the chance to invest in a downturn, HSBC managing director and report author Jonathan Norris said in a media briefing. Those investors believe “it’s time to start deploying the way we typically deploy in normal market times,” he said. Driving that change in mindset has been a surge in M&A deals and “renewed hope” for initial public offerings, which have slowed considerably since 2021, the report said. Acquisitions of venture-backed biotechs brought in $64 billion in total deal value in 2025 and involved large buyouts of publicly traded companies such as Metsera and Avidity Biosciences. “That’s the lift the industry needs,” said Norris. — Gwendolyn Wu

Big biotech: new and improved

After a few years of management changes, a research reorganization and uninspiring earnings, Biogen wants investors to believe it has finally entered a fresh, rosier era. Across the company’s 10-slide J.P. Morgan presentation , “New Biogen” comes up five times. The executive team “has been out meeting with investors and analysts on an almost weekly basis,” Chief Financial Officer Robin Kramer said in an interview. “My view is sentiment has improved, as [has their understanding of] why we have conviction in our pipeline.” Within that pipeline, Biogen has five experimental drugs in late-stage testing that it classifies as programs with “significant commercial potential.” The list includes two potential lupus therapies, named litifilimab and dapirolizumab pegol, as well as an immune system-regulating antibody that the company got ahold of through a $1.2 billion acquisition . That antibody, “felzartamab,” is being evaluated against several kidney illnesses. Much is riding on those programs. A recent slate of new Biogen product launches — Leqembi for Alzheimer’s disease, Zurzuvae for postpartum depression, Skyclarys for a rare neurological condition — haven’t delivered the kind of sales growth some on Wall Street hoped to see. Eric Schmidt, an analyst at Cantor Fitzgerald, described Biogen’s most recent earnings report as “fairly unremarkable,” and wrote that the narrative around the company “continues to suffer from lackluster investor appeal.” Kramer argues Biogen’s stock price doesn’t fully reflect the potential of the company’s revamped pipeline, which is set to produce five data readouts over the next 18 months. “2026 is going to be a really key year in our transformation,” she said. But Biogen isn’t the only one making such an argument. “We're going into 2026 with what I would say are unprecedented opportunities,” Daniel O’Day, CEO of Gilead Sciences, told reporters Tuesday morning. “We're in a new era of growth and impact.” Gilead, O’Day added, currently has “the most robust pipeline in the almost 40-year history of the company.” To that end, the California-based biotech estimates it could have up to 10 launches in new or additional indications between now and the end of 2027. Investors may not be holding their breath, though. Gilead and Biogen shares were down about 1% and 4%, respectively, in Tuesday afternoon trading. — Jacob Bell

Summit’s crowding competition

Summit Therapeutics and its partner Akeso are still leading the push to prove whether the drugs known as PD-1/VEGF inhibitors will be a major step forward in cancer care. But the competitive landscape has widened considerably over the last year or so, making Summit’s formerly-commanding position — and its standing with investors — appear shakier than it once was. The latest example came only hours before Summit began presenting at J.P. Morgan on Monday. AbbVie staked $650 million upfront , and possibly more than $5 billion overall, on rights to a rival PD-1/VEGF drug developed by a China-based biotech called RemeGen. That deal is one of many big drugmakers have struck for similar medicines over the last year or so. And it took “another large pharma off the board” as a possible suitor for Summit and its drug ivonescimab, wrote Leerink Partners’ Daina Graybosch in a note to clients. “We see few (if any) large-cap pharma companies with sufficient capital and interest to provide upfront consideration for ivo that supports [Summit’s] current valuation,” Graybosch wrote. Summit shares fell by double digits on the news. In Summit’s presentation, president and co-CEO Maky Zanganeh argued that the company is still ahead of the pack with a differentiated drug set to generate substantial value going forward. Ivonescimab has succeeded in multiple Phase 3 trials and is currently involved in several others . The drug is also approved in China and has been submitted to U.S. regulators , with a decision expected before the end of 2026. Summit has clinical trial collaborations in place with companies like Pfizer , Revolution Medicines and, most recently, GSK . And later this year, it’ll report findings from a study in first-line lung cancer that could unlock billions of dollars in market potential. Summit has a “significant lead” in lung and colorectal cancers, which are potentially the largest two markets across solid tumors, Zanganeh said. “We’re optimistic and pleased with everything we’ve seen,” added co-CEO Bob Duggan. “We’ve yet to see an indicator that this isn’t anything other than an outstanding drug.” — Ben Fidler

Merck’s ambitious post-Keytruda target

Merck & Co. CEO Rob Davis says his company aspires “to grow through” the coming loss of market exclusivity for cancer immunotherapy blockbuster Keytruda. Several new drugs, some home-grown and some acquired, will help the company get to what it now believes will be $70 billion in sales by the mid-2030s, roughly double what Keytruda is expected to record in 2028 before going off-patent. Among those prospects is a “strain-agnostic” preventive influenza medicine it gained when it acquired Cidara Therapeutics for $9.2 billion in November. Now called MK-1406, the drug is in Phase 3 testing and the northern hemisphere portion of that study is complete, said Dean Li, president of Merck Research Laboratories, at the company’s J.P. Morgan presentation. Merck will likely conduct an interim check on the data collected so far, and at that point assess the program’s regulatory prospects, Li said. But the company is currently opening enrollment in the southern hemisphere for the flu season there as well. “We need those patients. We need a broad patient population to be able to have as robust of a label as possible,” he said. The company sees significant sales ahead not only as an additional boost to vaccinations for older adults and people with weak immune systems, but also as a potential substitute. “With the pressure on vaccination, I cannot foresee flu vaccinations increasing in this country over the next three years,” Li said. According to Davis, Merck might not be done with acquisitions if it sees innovative science and a commercial opportunity. With the loss of Keytruda revenue looming, later-stage and even already-approved assets are even more coveted, as was the case when it bought Verona Pharma for a marketed respiratory drug last year. Davis also didn’t clearly dispel rumors of a particularly large, imminent acquisition days after a published report indicated the company may pay up to $32 billion for cancer drug developer Revolution Medicines. “You know, if you look from a dollar perspective, we've been looking in that up to $15 billion dollar range,” he said. “We've been very clear that we're willing to go larger than that, but we only will do so following the exact same logic and discipline.” — Jonathan Gardner

Moderna’s ‘pivotal’ year

For Moderna, 2026 is shaping up to be a crucial year. Vaccines for influenza, as well as a combination of COVID and flu, could win regulatory approvals. Heavily anticipated data for a skin cancer vaccine could come. And along the way, revenue should grow by 10% while the effects of ongoing cost cuts continue to take shape. The early outlook Moderna provided Monday was, for a change, welcomed by investors and analysts that have been critical of its spending. According to the company, 2025 revenue is expected to hit $1.9 billion, meeting previous estimates . Operating costs will be reduced by another $200 million, compared to previous guidance. “We were impressed with the company’s cost-cutting cadences,” William Blair analyst Myles Minter wrote in a note to clients. Shares climbed by more than 15% on the news. Moderna’s stock has long been on a downward slope due to declining COVID vaccine sales, frequently missed financial targets and a disappointing launch for its only other approved product, a shot for respiratory syncytial virus. The company faced additional hurdles in 2025, too, amid escalating vaccine hesitancy in the U.S. and heavy criticism of the messenger RNA technology Moderna relies on. Ahead of J.P. Morgan, Moderna's co-founder and chairman Noubar Afeyan warned of the impact the environment is having on scientific research. “While we’re closer than ever to realizing biotechnology’s full potential to make miracles, we’re also closer than ever to throwing that potential away,” wrote Afeyan, the CEO of biotech creator Flagship Pioneering, in a letter published on the firm’s website. “We’re at risk of taking a sledgehammer to our miracle machine.” Moderna has been a victim of those attacks. The biotech lost a federal contract for mRNA vaccine research ; won a narrower approval for its COVID shot; and has seen public health leaders make false claims about its product’s safety and efficacy. “Some of the loudest voices are presenting their opinions as alternative scientific facts with no regard for mountains of data from rigorous experiments,” wrote Afeyan. Still, Moderna has a chance to bounce back. The company has mapped out a plan to break even financially by 2028, in part by growing sales of its coming standalone flu and COVID-flu shots. Moderna anticipates revenue from both in 2027 and 2028, respectively, and in a presentation, CEO Stéphane Bancel highlighted the importance of the combination shot, which could be the only COVID-flu vaccine on the market. Minter, however, views the progress of a cancer vaccine it’s co-developing with Merck as paramount for its future growth. Moderna could report late-stage data in adjuvant melanoma this year. “After a light 2025, 2026 sets up as a pivotal year to add shareholder value back into name,” Minter wrote. — Delilah Alvarado