After several years of contraction, biopharma is heading into 2026 with measurable signs of recovery. The Nasdaq Biotechnology Index reached a record high in late 2025, large pharmaceutical companies committed more than $36 billion to biotech acquisitions in just two months, and late-stage clinical successes have begun translating into higher valuations.
Yet the rebound described in Evaluate Pharma and Evaluate Omnium’s 2026 Preview is narrow and uneven, shaped less by optimism than by proof. The data shows a sector that has grown far more selective. Capital is concentrating around assets that have already demonstrated clinical efficacy, target large markets, and offer credible differentiation.
For drug discovery teams, the message is clear. The industry is still willing to invest in innovation, but only when it comes with a clear translational and commercial rationale.
Discovery competition tightens
The clearest example of this selectivity is the metabolic space.
Evaluate Pharma forecasts that Eli Lilly’s incretin franchise will overtake Novo Nordisk’s GLP-1 portfolio in 2026, with Mounjaro and Zepbound driving Lilly’s prescription sales to $75.5 billion next year. Novo, which previously led the category, is expected to see Ozempic revenues peak in 2026, with billions shaved off long-term sales forecasts following slower growth and commercial missteps.
At the product level, Lilly’s tirzepatide-based therapies are projected to deliver the largest incremental sales gains in 2026, while Novo’s semaglutide faces mounting pressure from both competition and looming patent expirations in markets such as China, India, Brazil, Turkey, and Canada. Although those markets represent a smaller share of global revenue, Evaluate notes that the appearance of low-cost competitors will add further downward pressure on semaglutide’s growth trajectory.
For discovery, the implications extend beyond GLP-1s themselves. The most valuable late-stage metabolic assets are now those positioned as successors to first-generation incretin therapies, rather than incremental extensions. Novo Nordisk’s cagrisema, a fixed-dose amylin and GLP-1 combination, tops Evaluate’s list of biggest potential launches, with projected 2032 sales of $17.2 billion. Lilly’s oral GLP-1 candidate, orforglipron, follows closely at $11.8 billion in projected sales. Three amylin-based therapies appear among the ten most valuable R&D projects overall, reflecting growing belief that future metabolic leadership will come from differentiated biology rather than tweaks in formulation.
Late-stage assets pull capital back into biotech
The resurgence in mergers and acquisitions in 2025 reflects how tightly capital is now tied to late-stage validation.
Evaluate Pharma reports that $36 billion in biotech takeouts were announced in October and November 2025 alone, including Novartis’s $12 billion acquisition of RNA-focused Avidity and Merck’s $9.2 billion purchase of antiviral developer Cidara.
These deals share a common thread: buyers are paying premiums for assets with strong clinical data in defined indications. Deal bankers cited in the report note that large pharmaceutical companies are prepared to pay up for “de-risked” programs that address sizable markets, while earlier-stage platforms without human efficacy data continue to struggle for attention.
This is reshaping discovery incentives. Venture funding remains uneven, with Evaluate showing that 2025 venture investment tracked closely with 2024 levels, dominated by fewer and larger rounds. The result is a funding environment where discovery teams are expected to generate translational proof earlier, often before traditional value inflection points.
Immunology remains active
Immunology and inflammation continue to attract sustained R&D investment, supported by both clinical need and commercial precedent. Evaluate identifies multiple late-stage immunology assets approaching regulatory decisions or pivotal data in 2026, including Roivant’s brepocitinib, Vera Therapeutics’ atacicept, and Apogee’s APG777.
However, the data also highlight how competitive the space has become. While immunology blockbusters such as Skyrizi and Dupixent continue to post strong sales, new entrants face crowded indications and heightened expectations around efficacy and durability. Evaluate estimates brepocitinib’s 2032 sales potential at $2.3 billion, reflecting meaningful opportunity, but also a more restrained outlook compared to earlier cycles when immunology launches often carried loftier expectations.
For discovery teams, success in immunology increasingly depends on precision. Programs that integrate biomarker strategies, define clear patient subsets, and demonstrate mechanistic differentiation are better positioned to advance. Broad immunomodulatory approaches without clear clinical advantages are finding fewer backers.
Oncology shifts toward targeted and high-confidence biology
Oncology remains a central pillar of biopharma R&D, but its contours continue to narrow. Evaluate’s list of most valuable R&D projects includes multiple precision oncology assets, such as Revolution Medicines’ RAS(ON) inhibitor daraxonrasib, with an estimated net present value of $9.1 billion, contingent on upcoming Phase 3 pancreatic cancer data.
Cell therapies remain a focal point in hematologic malignancies. Gilead and Arcellx’s anito-cel appears among the largest projected launches, with expected 2032 sales of $2.5 billion. Competition in this space is intense, and benchmarks are well established, leaving limited room for marginal improvements.
In solid tumors, assets that tightly align molecular drivers with clinical response continue to attract interest. Evaluate notes that radiopharmaceuticals, multispecific antibodies, and mutation-directed therapies are among the oncology approaches most likely to drive value in 2026 and beyond.
Regulatory uncertainty adds friction to development
The regulatory environment introduces another variable into discovery planning. Evaluate Omnium projects 57 novel agents with a good chance of launching in the US in 2026, roughly in line with the decade average. Fifth-year sales for this cohort are projected at nearly $50 billion, suggesting that the industry’s R&D engine remains productive.
At the same time, staffing cuts and leadership turnover at the FDA have raised concerns about consistency. Although median filing-to-approval times did not show dramatic shifts in 2025, sponsors report increased difficulty obtaining early development guidance. For discovery teams, this places greater emphasis on internal decision-making and increases the cost of missteps.
Patent pressure reinforces the demand for credible innovation
Patent expirations beginning in 2026 add urgency to the push for external innovation. Evaluate identifies several major products facing generic or biosimilar competition next year, including Bristol Myers Squibb’s Eliquis and Novartis’s Entresto. While the most severe revenue losses are still a few years away, companies are already repositioning pipelines to compensate.
This pressure explains the renewed focus on assets capable of replacing, rather than supplementing, existing revenue streams. Discovery programs that can demonstrate potential to reset standards of care are commanding attention. Incremental improvements are advancing more cautiously.
A more disciplined recovery
Heading into 2026, we observe a biopharma sector that has become more exacting. Growth has returned, but it is conditional. Drug discovery remains central to long-term value creation, but the tolerance for uncertainty inevitably has narrowed.
Validated biology, late-stage execution, and commercial relevance now carry disproportionate weight. For discovery scientists and leaders, 2026 represents a year where credibility is quantifiable and where progress is measured less by promise than by performance.
