The life science exit market is stronger than it has been in years. But that doesn’t mean exits have become easier.
Global biopharma M&A and licensing rebounded to record levels in 2025, while the first half of 2026 has brought successful development-stage IPOs alongside continued deal activity.
We sat down with Innovestor Life Science partners Pekka Simula and Milla Koistinaho to discuss what is changing in the exit market – and what those changes mean for life science companies. The improving market is encouraging, but beneath the headline numbers, the exit landscape is changing in important ways.
“Strong M&A activity and US IPOs are great signals far beyond North America. They create confidence in the whole value chain,” says Milla Koistinaho. “Public investors are willing to fund biotech again and pharma companies are paying premiums for innovation, meaning that scientific and clinical development risk-taking is rewarded again. Inevitably this spirit reaches the Nordics with increased venture activity and greater willingness to finance ambitious companies.”
China has changed the global innovation map
Ask Pekka Simula about the biggest structural change of the past decade and his answer is immediate: China.
“We’ve seen a big leap from me-too drugs to first-in-class and best-in-class innovation,” Simula says. “In the first half of 2026, more than half of Big Pharma’s in-licensing deal value was in assets originating in China.”
China is also increasingly accepted as a clinical development market. Koistinaho points out that Western biotech companies can now strike deals with large strategic players based on China-only clinical data – something that would have been much less likely only a few years ago. The impact of the recently surfaced safety incidents in Chinese investigator initiated studies remains to be seen.
Big Pharma still needs innovation, but priorities are shifting
Some of the forces driving life science M&A haven’t changed. Big Pharma still faces patent expirations and needs new innovation to replenish its pipelines. Ageing populations and pressure on healthcare systems continue to create demand for treatments that can deliver meaningful clinical outcomes at sustainable cost.
“The fundamentals remain: Big Pharma’s growing patent cliff and hunger for innovation, ageing populations and the healthcare crisis, and the need for true innovation with favourable health economics,” Simula says.
What has changed is where buyers see opportunity.
Obesity has transformed into a major therapeutic market. Oncology’s increasingly competitive late-stage pipeline has pushed some exit opportunities towards Phase 3 and even post-approval. Immunology and women’s health are attracting growing interest, while neuroscience is returning to the agenda in areas ranging from Alzheimer’s and Parkinson’s to epilepsy, pain and depression, followed with enthusiasm by Koistinaho who is also Adjunct Professor in neurobiology.
Buyers want more than clinical promise
“Capital is more expensive and buyers are likely more disciplined. Vague platform stories do not sell,”Koistinaho says.
Strong biology and a promising clinical signal are no longer enough on their own. Buyers – and consequently investors – are asking a broader question.
“Even if the drug or healthcare product works, who will pay for it and how much? Companies need to think about reimbursement, pricing and overall healthcare impact much earlier than before,” she explains.
For European companies, the path to the US is particularly important. Even when clinical development starts in Europe, the US is often the largest potential market, making a credible US entry strategy critical.
There is also a new layer of uncertainty. Geopolitical developments can affect market access and regulatory processes, and Koistinaho points to increased unpredictability around the FDA as one example.
For European life science companies, the message is clear: the exit market may be stronger, but the route to an exit is more demanding. Great science remains the starting point, but companies now need to show how that science translates into clinical value and a credible path to approval, reimbursement and adoption.
Behind the insights
Milla Koistinaho (PhD in Biotechnology and Adjunct Professor in Neurobiology) has over 20 years of experience in commercializing ground-breaking biomedical inventions. After postgraduate training at Eli Lilly and Company in the USA, Milla has co-founded 3 venture backed biotechs and in executive roles managed fundraising, business development and licensing activities. She also has a strong track record in intellectual property rights -being an inventor in tens of patens herself, she has also been responsible for commercializing the wide IP portfolio of University of Helsinki and spinning out science based start-ups. Milla serves as a Board member in many Innovestor Life Science Fund’s therapeutics portfolio companies.
Pekka Simula has spent over 25 years with innovative startups in health and life sciences, including digitalization of data capture in clinical trials, cancer radiotherapy, and as founder and CEO in oncology and CNS drug development companies. Pekka has actively supported health & life science teams as mentor and board member and IPO’d two companies. He loves working with passionate founders who want to change the world for the better.