Pharma & biotech deals heat up with $5B+ in transactions

The week of August 11-15, 2025 witnessed a striking bifurcation in pharmaceutical and biotech dealmaking: while venture capital remained frozen in an unprecedented funding drought, strategic partnerships and public markets surged with over $5 billion in total transaction value. Major pharma companies deployed capital aggressively through licensing deals totaling $4.5 billion, with Bayer and Eli Lilly each committing $1.3 billion to secure next-generation oncology and obesity assets.

The absence of any significant venture funding rounds during the week—a stark departure from historical norms—reflects the industry's ongoing adjustment to higher interest rates and regulatory uncertainty, though Hong Kong's biotech IPO market bucked the trend with vaccine developer Ab&B Bio-Tech soaring 158% on its debut. This dichotomy between robust strategic activity and venture capital hesitancy suggests a fundamental shift in how innovation is being financed, with established pharma companies increasingly bypassing traditional VC rounds to directly acquire or license promising technologies.

Mega-licensing deals dominate as pharma giants target KRAS and obesity

Strategic licensing transactions commanded the week's headlines, with pharmaceutical giants committing unprecedented sums to secure pipeline assets in oncology and metabolic diseases. Bayer AG announced a blockbuster $1.3 billion agreement with San Diego-based Kumquat Biosciences on August 12 for exclusive global rights to their KRAS G12D inhibitor program. The asset, which just received FDA IND clearance in July and entered Phase 1a trials, targets a mutation found in 37% of pancreatic cancers, 13% of colorectal cancers, and 4% of non-small cell lung cancers. Kumquat retained a strategic option to negotiate profit-loss sharing in the US market, reflecting the asset's potential value.

Eli Lilly matched Bayer's commitment with its own $1.3 billion partnership with Boston-based Superluminal Medicines on August 14, acquiring an AI-driven platform targeting G protein-coupled receptors (GPCRs) for obesity and cardiometabolic diseases. The deal includes an upfront payment, equity investment, and substantial development milestones, positioning Lilly to strengthen its obesity pipeline following mixed results from orforglipron trials. Superluminal's lead MC4R program is expected to enter clinical trials in 2026, leveraging the company's proprietary AI platform to design novel GPCR modulators.

Amphastar Pharmaceuticals secured a portfolio of three peptide therapeutics from China's Nanjing Anji Biotechnology in a deal worth up to $453 million announced August 12. The transaction encompasses an endogenous peptide targeting hard-to-treat cancers, a peptide-docetaxel conjugate for enhanced chemotherapy selectivity, and an anti-VEGFR peptide eye drop for wet age-related macular degeneration. Amphastar will pay $6 million upfront plus up to $42 million in development milestones and $225 million in sales milestones, with a 5% royalty on net sales capped at $60 million per product.

Fosun Pharma partnered with Expedition Therapeutics in a $645 million global licensing deal announced August 11, securing rights to XH-S004, an oral DPP-1 inhibitor currently in Phase 2 trials for non-cystic fibrosis bronchiectasis and Phase 1b for COPD. The agreement includes $17 million upfront, $103 million in development milestones, and up to $525 million in sales milestones, marking the first major deal for Expedition Therapeutics since its founding in March 2024.

Hong Kong biotech IPOs surge while US venture funding vanishes

Public markets presented a paradoxical landscape during the week, with Asian exchanges demonstrating remarkable strength while US venture capital activity completely evaporated. Ab&B Bio-Tech's Hong Kong debut on August 8 generated extraordinary investor enthusiasm, with shares rocketing 169% on opening to HK$34.80 before closing at HK$33.28, still up 158%. The Chinese vaccine developer raised approximately $55 million at HK$12.90 per share—the low end of its range—but saw retail oversubscription exceed 4,000 times. The company's differentiated human diploid cell platform for vaccine development and its approved quadrivalent influenza vaccine drove investor interest.

Yinnuo Pharma completed its Hong Kong listing on August 15, raising $68.2 million at HK$18.68 per share through 36.6 million shares. The metabolic disease specialist, which launched its core diabetes drug commercially in China following NMPA approval in January 2025, reported RMB 38.14 million in revenue for the first five months of 2025. The company has FDA IND clearance to advance its pipeline into obesity and MASH indications.

In stark contrast to Asian markets, the US biotech venture capital ecosystem experienced an unprecedented freeze. Not a single major venture funding round was announced during the entire week—a dramatic departure from typical activity levels where 3-5 significant rounds would normally be expected. This absence reflects the broader challenging environment documented throughout 2025, with Q2 venture funding falling from $7.0 billion to $4.8 billion, the worst quarterly total in three years.

Compass Therapeutics capitalized on public market access with a $120 million follow-on offering announced August 12 and priced August 13. The Boston-based oncology company sold 33.29 million shares at $3.00 and 6.71 million pre-funded warrants at $2.9999, with proceeds earmarked for commercial readiness of its lead program tovecimig (CTX-009), a DLL4 x VEGF-A bispecific antibody in Phase 2/3 trials for biliary tract cancer.

Ocugen secured $20 million through a registered direct offering to Janus Henderson Investors, closing August 12. The gene therapy specialist issued 20 million shares at $1.00 with accompanying warrants exercisable at $1.50, extending its cash runway to Q2 2026 for advancing its modifier gene therapy platform addressing inherited blindness diseases.

Small-cap M&A fills the void as mega-mergers remain elusive

Merger and acquisition activity during the week reflected the industry's continued preference for targeted, technology-focused transactions over blockbuster deals. 10x Genomics announced its acquisition of Scale Biosciences for $30 million upfront plus undisclosed milestone payments, integrating Scale's quantum barcoding and combinatorial indexing technologies into its Chromium single-cell analysis platform. The transaction, disclosed during 10x's Q2 2025 earnings call on August 7, brings together complementary technologies for massively parallel cell analysis, with Scale's founders including Stanford's Garry Nolan and University of Washington's Jay Shendure and Cole Trapnell.

BridgeBio Oncology Therapeutics completed its SPAC merger with Helix Acquisition Corp. II on August 11, beginning trading on NASDAQ under ticker BBOT. The transaction valued the oncology-focused company at approximately $450-550 million, with $120 million from Helix's trust account (60% retention rate) and a $261 million PIPE led by Cormorant Asset Management. BridgeBio Oncology's differentiated pipeline includes BBO-8520, a KRAS G12C inhibitor that targets the oncogene in both "on" and "off" states, and BBO-10203, a RAS-PI3Kα interaction inhibitor, both in Phase 1 trials.

The week's M&A activity gained additional validation from the FDA's August 6 approval of dordaviprone (Modeyso), the first systemic therapy for H3 K27M-mutant diffuse midline glioma. The approval retroactively justified Jazz Pharmaceuticals' $935 million acquisition of Chimerix announced in March 2025, with the drug demonstrating a 22% overall response rate and 10.3-month median duration of response in this devastating pediatric brain tumor. Analysts project the drug could generate up to $385 million in global sales by 2030.

Government partnerships signal new models for drug development

Public-private partnerships emerged as a significant theme, with governments directly engaging pharmaceutical companies to address public health priorities. Eli Lilly announced an £85 million ($114 million) partnership with the UK government on August 12 to develop innovative obesity care models across the National Health Service. The collaboration will explore new approaches to obesity treatment delivery, leveraging Lilly's expertise in GLP-1 agonists while helping the NHS manage the surge in demand for weight-loss medications.

This government engagement reflects a broader shift in how nations view pharmaceutical innovation as critical infrastructure. The partnership model allows governments to shape development priorities while companies gain guaranteed market access and real-world evidence generation opportunities. Similar frameworks are emerging across Europe and Asia, with Singapore's S$28 billion RIE 2025 plan and South Korea's National Bio Committee launched in January 2025 demonstrating coordinated national strategies to capture biotech value chains.

Asia-Pacific emerges as the week's geographic winner

Regional dynamics revealed a clear winner in Asia-Pacific markets, which captured significant capital flows despite global headwinds. Hong Kong's biotech ecosystem demonstrated particular strength, with 73 companies listed under the exchange's Chapter 18A biotech regime by June 2025. The week's IPO activity—including Ab&B Bio-Tech's spectacular debut and Yinnuo Pharma's successful listing—validated the exchange's reforms including confidential filing frameworks launched in May 2025.

China's licensing momentum accelerated, with Chinese companies accounting for 32% of global biotech licensing deal value in Q1 2025 compared to 21% in 2023-2024. The Fosun-Expedition partnership exemplified the growing trend of China-to-US technology transfer, reversing traditional capital flows. South Korea's biotech sector showed remarkable growth with a 113% increase in licensing deal value to $7.86 billion year-to-date, driven by billion-dollar agreements with Eli Lilly and GSK. The country's strength in antibody-drug conjugates, with 39% growth in ADC licensing reaching $1.4 billion, positions it as a specialized technology hub.

Singapore continued leveraging its political neutrality and strong intellectual property protections to serve as a regional hub for international partnerships. The city-state's biotech market is growing at 12.70% CAGR through 2032, supported by the government's RIE2030 roadmap emphasizing AI integration in drug discovery.

In contrast, European deal activity remained surprisingly muted during the week, attributed partly to August vacation schedules affecting announcement timing. Despite hosting major biotech clusters in Basel, Cambridge, and Munich, no significant European-originated transactions were announced during August 11-15, though Swiss biotechs had raised over 2.5 billion Swiss francs ($3 billion) in 2024, demonstrating underlying ecosystem strength.

Therapeutic focus reveals industry's strategic priorities

Analysis of the week's transactions reveals clear therapeutic area priorities shaping industry investment. Oncology dominated with six of twelve major deals, reflecting both continued unmet medical need and recent technological advances in precision medicine. The Bayer-Kumquat KRAS G12D transaction and BridgeBio Oncology's SPAC completion underscore the industry's focus on previously undruggable targets now accessible through structure-based drug design.

Metabolic diseases, particularly obesity, attracted outsized investment with both the Lilly-Superluminal partnership and the UK government collaboration. The sector's momentum reflects the transformative success of GLP-1 agonists, with companies racing to develop next-generation therapies addressing limitations of current treatments. The global obesity drug market is projected to reach $100 billion by 2030, driving aggressive competition for differentiated assets.

Platform technologies garnered strategic interest, with the 10x Genomics-Scale Biosciences acquisition highlighting the value of enabling technologies that accelerate drug discovery. AI-driven platforms featured prominently, with Superluminal's GPCR design capabilities and partnerships between Rakovina Therapeutics-NanoPalm and HopeAI-Mayo Clinic demonstrating the technology's integration across the development continuum. The absence of traditional venture funding may accelerate this trend, as platform companies increasingly seek strategic partnerships over financial investors.

Rare diseases maintained steady investment despite their smaller markets, validated by dordaviprone's approval for diffuse midline glioma affecting fewer than 1,000 patients annually in the US. The regulatory pathway's success—accelerated approval based on overall response rate—encourages continued investment in precision medicines for genetically defined patient populations.

Conclusion

The week of August 11-15, 2025 marked an inflection point in pharmaceutical dealmaking, characterized by strategic buyers filling the vacuum left by retreating venture capitalists. The $4.5 billion deployed through licensing agreements demonstrates big pharma's willingness to pay premium prices for de-risked assets, particularly in oncology and metabolic diseases where recent scientific breakthroughs have opened new therapeutic possibilities. The complete absence of venture funding rounds—unprecedented in recent memory—suggests a fundamental recalibration of risk appetite that may persist through the remainder of 2025.

Hong Kong's emergence as a viable alternative to US capital markets offers biotechs new financing pathways, though the spectacular first-day gains for Ab&B Bio-Tech raise questions about pricing efficiency. The contrast between Asian market exuberance and Western caution reflects divergent regulatory environments and investor bases, with Chinese retail investors driving valuations that institutional investors in the US might view skeptically. As the industry enters the traditionally active fall conference season, the week's activity suggests dealmaking will increasingly concentrate among strategic buyers with the balance sheets to weather uncertain markets while venture-backed innovation faces an extended winter.