Biotech sector rebounds sharply on merger activity and drug approvals

The biotech industry has made a strong comeback in 2026 after a difficult period when some indices fell by more than 50%. The XBI biotech fund rose about 25% in 2026 and nearly 80% over the past year, its best level since early 2021. Twenty biotech companies listed on the stock market in 2026, compared to just 11 the year before. Big pharmaceutical companies bought 80 biotech businesses in the first half of 2026 alone, worth $96 billion. The total value of all biotech deals reached $216 billion, almost double the $118 billion recorded in 2025. Large drug companies are buying biotechs because their own key medicines will soon lose patent protection, which means they need new products to replace lost income.