The first day of the JP Morgan Healthcare Conference held in San Francisco, California from 13 January to 15 January 2025 began with Johnson & Johnson, Eli Lilly and GSK announcing mergers and acquisitions (M&A) deals each exceeding $1 billion, signalling a return in deal-making confidence following subdued activity in 2024.

According to GlobalData’s Pharma Intelligence Center Deals Database, biopharmaceutical M&A witnessed a 47% decrease in total deal value in 2024 compared to 2023, with more than 80% of M&A transactions valued at under $1 billion. However, falling interest rates and potential reduced M&A regulatory stringency following the departure of Federal Trade Commission (FTC) chair Lina Khan under the incoming Trump administration could alleviate challenges hindering biopharmaceutical companies from signing larger deals, potentially spurring larger M&A deals in 2025. GlobalData’s recent State of the Biopharmaceutical Industry 2025 report revealed that 11% of surveyed healthcare industry professionals viewed “mega M&A” as the trend having the most positive impact on the biopharmaceutical industry.

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Johnson & Johnson sparked optimism for a potential biopharmaceutical M&A recovery with the announcement of its acquisition of Intra-Cellular Therapies valued at $14.6 billion, representing the largest biotech M&A since Pfizer’s $43 billion acquisition of Seagen completed in December 2023. Through the acquisition, Johnson & Johnson will gain access to Intra-Cellular Therapies’ extensive neurology portfolio, including Caplyta (lumateperone), which is marketed in the US for the treatment of bipolar disorders and schizophrenia and is currently under Food and Drugs Administration (FDA) review for major depressive disorder. Caplyta is projected to achieve global sales of $3.1 billion in 2030, according to GlobalData’s Pharma Intelligence Center Drugs Database.

Joaquin Duato, CEO of Johnson & Johnson, commented during a fireside chat at the JP Morgan Healthcare Conference 2025 that Intra-Cellular Therapies aligns with the type of criteria that “guides our M&A efforts” due to the company’s focus on neuroscience, highlighted as one of Johnson & Johnson’s core areas.

Meanwhile, Lilly announced plans to acquire Scorpion Therapeutics’ PI3Kα inhibitor STX-478 for $2.5 billion, with its non-PI3Kα drugs spun off into a new company. STX-478 is currently in Phase I trials for breast cancer and other advanced solid tumours. This transaction marks Lilly’s entry into the PI3K inhibitor space, currently dominated by Novartis’ Piqray and recently joined by Roche’s Itovebi, which was approved in October 2024. Improved selectivity of STX-478 compared to Piqray and Itovebi may position the STX-478 as a best-in-class treatment.

GSK also announced its $1.15 billion acquisition of US-based precision medicine company IDRx, expanding its oncology pipeline with IDRx’s oral KIT inhibitor IDRX-42, currently in Phase I trials for the treatment of gastrointestinal stromal tumours.

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The flurry of M&A deals amid the JP Morgan Healthcare Conference signals a trend towards an M&A uptick in 2025, although investors remain skeptical as to whether this is indicative of a recovery of the biopharmaceutical industry, especially given uncertainty over the impact of the incoming Trump administration on healthcare policy and FDA approvals. Nonetheless, potential antitrust deregulation following the departure of FTC chair Lina Khan could foster a more favourable environment for larger M&A deals in 2025, conducive to the need to refuel pipelines and drive innovation ahead of upcoming patent expiries faced by large biopharmaceutical companies.