Q&A: Biopharma Deal Strategy Shifts Toward Risk Management

Sebastian Andersen, CEO and founder of ClarityNorth Partners, sat with BioPharm International® to discuss the first half of 2026 biopharma dealmaking, including the size and focus of transactions, oncology’s share of deal value, and what companies can learn from Eli Lilly’s approach to M&A and licensing.

BioPharm: Are companies becoming more cautious about large biopharma transactions?

Sebastian Andersen: I wouldn't necessarily call $30 billion a deliberate ceiling. What we're seeing is probably greater precision when it comes to capital deployment. Buyers are willing to spend $5 billion to $10 billion or more when an asset addresses a clear pipeline or portfolio need without taking on the integration complexity and execution risks inherent in transformational mergers.

That emphasis on targeted capital deployment comes as the industry increasingly favors smaller, strategic transactions over large transformational mergers. Recent reporting has highlighted a shift toward more focused acquisitions as companies seek to limit integration risk while addressing specific pipeline gaps.¹

I don't think boards are necessarily gun-shy. I think they're more disciplined about what they need to own versus how they can otherwise structure their way out of risk.

How should biopharma companies interpret oncology’s strong share of H1 deal value?

Andersen: It's difficult to interpret six months of deal value data. A handful of large transactions can materially change the therapeutic rankings.

I wouldn't necessarily interpret the data as a fundamental retreat from cardiometabolic. What is meaningful is that oncology represented 41% of H1 value. That reinforces that oncology remains structurally important to pharma pipelines.

I would have a tough time saying that cardiometabolic disease areas don't remain strategically important, even if the transaction mix shifted somewhat during the first half of 2026.

What can mid-cap companies learn from Lilly’s dealmaking strategy?

Andersen: We're probably looking at the principles of what Lilly has been doing. The principle is definitely more transferable than the scale itself. Very few companies have that amount of scale.

A mid-cap can be much more selective about what it needs to own versus what it can access through licensing, partnerships, various options, or milestone-based structures.

Lilly's recent dealmaking illustrates that range of approaches. The company has continued to pursue targeted transactions alongside licensing and partnership arrangements, including its planned acquisition of Merida Biosciences for up to $2.88 billion.²

The lesson from Lilly isn't simply to spend more because you might have a little bit more. It's to use different transaction structures deliberately depending on the strategic importance, development risk, and capital available to the company.

How can deal structure help companies manage M&A risk?

Andersen: It also comes down to what you find during due diligence. From my own time as a dealmaker with Novo Nordisk, any risk we uncovered during due diligence that was material enough always meant that we'd switch the deal structure to our favor.

Recent biopharma deal analysis similarly points to greater use of flexible transaction structures as companies navigate development, regulatory, geopolitical, and valuation risks.³

So, in other words, structure really is risk management at the end of the day. That's something a lot of companies are already applying, but probably something everybody could get better at by applying those principles in real-life scenarios.

Watch Part 1 of the interview here.

This is the first segment of a two-part interview with Sebastian Andersen. Part 2 will examine additional considerations for biopharma dealmaking.

References

1. The Wall Street Journal. The key to pharma M&A: Never shopping hungry. Published August 2026. Accessed September 3, 2026.
2. Reuters. Lilly to buy Merida Biosciences for up to $2.88 billion in autoimmune drug push. Published August 31, 2026. Accessed September 3, 2026.
3. Jacobus N, Livne O, Mirasol F. Flexibility and AI-driven diligence are defining biopharma deal strategy in 2026, says Baker McKenzie's Oren Livne. BioPharm International. Published June 26, 2026. Accessed September 3, 2026.
4. Mirasol F. $739 million acquisition of XOMA strengthens Ligand's biopharma portfolio. BioPharm International. Published April 28, 2026. Accessed September 3, 2026.