Biopharma Strategy in 2026: Lessons from 2025 on AI, M&A and the UPC

In short;

- use of artificial intelligence (AI) may lead to faster and more efficient drug development

- metabolic and obesity therapies are likely to continue to be a big driver of global pharmaceutical revenues, and mergers and acquisitions will be important for companies approaching a patent cliff; and

- as the Unified Patent Court (UPC) matures, its use by (bio)pharma companies is likely to become a more prominent part of their patent enforcement strategy in Europe.

AI

The path to developing a new drug is a long one, including initial compound screening, in vitro testing, lead identification/optimisation, clinical trials and regulatory approval. The use of AI for target identification, virtual screening, and predictive modelling has potential to fast-track the process compared with traditional drug development. Insilico Medicine claims impressive improvements using AI in lead candidate selection, with multiple AI-driven candidates in the pipeline. But AI’s utility extends far beyond drug development too. In clinical trials, patient recruitment, trial design and monitoring of adverse events are resource- and time-intensive. Pfizer purports to be using AI in more than half of its clinical trials to perform tasks such as quality-checks and to analyse patient data, claiming significant efficiency gains.

Compared with the above, patient-facing products, such as AI-based diagnostics and predictive models, have lagged behind due to regulatory scepticism. For now therefore, use of AI seems likely to be most prevalent in improving internal efficiencies within (bio)pharma companies rather than for patient-facing products. Will 2026 be the year that these patient-facing products start to gain traction? A product that has received both FDA and EMA approval is AIM-NASH, an AI-based tool for analysis of liver biopsy samples, developed by Path AI. The AI tool analyses images of the samples to generate various scores according to a scoring framework. A pathologist then reviews the scores, accepting or rejecting them. The clinician remains involved, and this was crucial to the grant of regulatory approval. Whilst AI can be used as a tool to improve efficiencies, where direct patient outcomes are concerned, AI will not yet be accepted as a total substitute for a clinician’s assessment.

Metabolic Disease and Obesity

The metabolic and obesity drug market exploded in 2025, with Novo Nordisk’s GLP-1R agonist Semaglutide (Wegovy/Ozempic) and Eli Lilly’s GLP-1R/GIPR dual agonist Terzepatide (Zepbound/Mounjaro) leading the charge. This explosion is illustrated by Terzepatide overtaking Merck’s leading cancer treatment Keytruda in sales to take the number 1 spot in best-selling drugs worldwide (based on Q3 2025 sales only). With Semaglutide approaching loss of exclusivity in several countries, and the lucrative nature of this relatively new market, the search for new drug candidates is fierce.  

Looking ahead, the search for new candidates is likely to expand beyond GLP-1R and GIPR to other receptor targets. Dual and triple agonism, and a move away from injectables, are both also of high interest. An oral pill form of Novo’s GLP-1 semaglutide has received FDA approval for obesity, with EMA approval (to cover the EU) expected in 2026. Lilly’s oral GLP-1 candidate orforglipron showed positive results in phase 3. Additionally, whilst remarkable weight loss is achieved by many users of the existing drugs, weight gain upon stopping treatment remains an issue. New products coming to the fore may look to tackle maintaining weight after desired weight loss has been achieved to tackle this issue.  

Addressing comorbidities may also receive increased focus. Novo has already expanded the indication of oral semaglutide (Rybelsus) from type 2 diabetes (T2D) to include cardiovascular disease and stroke, based on clinical trials showing reduced occurrence of cardiovascular death, heart attack and stroke in patients with T2D and at risk of these comorbidities.  

The public bidding war for Metsera between Novo and Pfizer in late 2025 highlights the desire of big pharma to have a stake in this market, with Pfizer ultimately coming out on top in the $10 billion deal. This secures them ownership of Metsera's portfolio which includes Phase 2 weekly and monthly injectable GLP-1R agonist (RA) MET-097i; a Phase 1 monthly amylin analogue MET-233i; and two oral GLP-1R agonists approaching clinical trials. Strategic acquisitions may therefore continue to prove important, in particular with Novo and Lilly looking to maintain their position, and for other big pharma looking to disrupt this lucrative market like Pfizer.

M&A and the Patent Cliff

Strategic mergers and acquisitions are crucial in the (bio)pharma sector, both for early-stage companies looking for an exit strategy and for big pharma looking to find their next blockbuster. Many big pharma companies face an impending patent cliff. Perhaps most notably, the world’s bestselling drug, Merck’s Keytruda, is set to lose exclusivity in 2028.  

Loss of exclusivity for key assets may lead to severe drops in revenue if the gaps in portfolios are not filled. M&A activity in 2025 saw a shift towards deals for later stage assets, with the number of deals and average deal size also increasing. This indicated a desire to acquire later stage assets with a higher likelihood of return on investment in the short term, and that companies may be willing to pay a premium for this. In addition to Pfizer’s acquisition of Metsera, 2025’s big deals also included Johnson & Johnson/Intra-Cellular Therapies (a neuroscience-focused biotech, blockbuster antipsychotic Caplyta/lumateperone) at $14.6 billion, Novartis/Avidity Biosciences (RNA-based therapies for neuromuscular diseases) at $12 billion and Sanofi/Blueprint Medicines (Ayvakit/avapritinib, a rare disease-focused oncology drug for advanced systemic mastocytosis) at $9.5 billion. The potential shift in the criteria of big pharma may lead to an increased pressure on smaller start-ups and scale-ups looking for an exit to prove a clearer route to market backed by more robust data, and potentially to make it further along in clinical trials before companies will commit to an acquisition.  

UPC

When the Agreement on a Unified Patent Court (UPCA) entered into force on 1 June 2023, the expectation was for cautiousness within big pharma. The lack of caselaw meant outcomes were unpredictable, and revocation would be effective across all 18 UPC member states, which would be costly for key assets. Many “opted-out” their European patents and applications such that they do not fall under the jurisdiction of the UPC. This opt out option is a transitional provision in place until 2030, with a possibility of extension until 2037. However, this option will not be available indefinitely, so (bio)pharma companies will need to come to terms with the inevitability of revocation actions via the UPC, and to learn to best exploit the potential benefits.  

On the flip side of this initial scepticism, the UPC offers fast turnaround times, and the possibility to obtain swift injunctions in its member states through a single application could be become a valuable tool for a patent proprietor if used effectively. The court’s so-called “long-arm jurisdiction” means that the UPC’s power can in some cases extend beyond the 18 member states that have ratified the UPCA, illustrating the unique power of the UPC.

It was expected that the court might be tested with stronger assets initially, where revocation was unlikely, or for less important assets where the implications of adverse decisions would not be so costly. On the other hand, it seemed that patents relating to lead assets (and in particular, composition-of-matter patents) would likely be kept out of the jurisdiction of the court via opt outs until the caselaw had developed. Initial cases suggest the UPC to be a quick and patentee-friendly forum, although this may be more of a reflection of the selectivity by rights holders towards enforcement of its stronger assets while the court is still in its (relative) infancy.  

2025 saw a number of cases in the life sciences sector. Life sciences companies led in preliminary injunction (PI) applications, filing 18 of the first 34 inter partes requests. PIs via the UPC are a valuable tool for originators in particular, allowing them to obtain a swift injunction and potentially delay generic entry into the market. PIs are intended to prevent imminent infringement, and the UPC will grant them where there is sufficient evidence to prove that imminent infringement is likely. In Boehringer v Zentiva, the UPC Court of Appeal (CoA) granted a PI against generics company Zentiva. The CoA clarified that obtaining a marketing authorisation was not enough to justify a PI. However, where preparations had advanced to national administrative processes such as obtaining government-approved pricing and reimbursement agreements (as was the case here), the potential infringer had “set the stage” for infringement to occur and thus a PI was justified. Interestingly, the Lisbon court of first instance initially did not grant this injunction, but the decision of the CoA indicates a more patentee-friendly stance.  

Looking further forward though, the implementation of the EU Pharma Package (becoming applicable in 2028) is likely to change this approach in favour of generic and biosimilar manufacturers (discussed further here).

Beyond PIs, Sanofi v Amgen and Meril v Edwards began to shape the way in which inventive step will be assessed by the court. This may provide reassurance on how validity will be tested. All in all, it will be interesting to see how companies continue to exploit the UPC into 2026.  

Summary

In the metabolic disease market, the extraordinary commercial success of GLP‑1‑based therapies has intensified competition, driving innovation into oral formulations, dual and triple agonists, and weight management beyond weight loss alone. Meanwhile, the looming patent cliff faced by many big pharma may be sharpening the focus on acquiring later‑stage, higher‑confidence assets. Early UPC decisions indicate a patentee‑friendly and procedurally efficient forum, albeit one that companies may still be testing cautiously.  

Beyond the topics discussed above, there are other factors that may increasingly influence (bio)pharma strategy as we move into 2026. The UK faces challenges from big‑pharma exits and ongoing uncertainty around drug pricing, with implications for domestic biotech, clinical trial access, and launch incentives. In contrast, jurisdictions such as Australia continue to gain traction as clinical trial hubs, benefiting from population diversity, cost advantages, favourable tax settings, and smoother access to APAC approvals. There is also continued uncertainty in the US around pricing reform, most favoured nation (MFN) benchmarking, and restrictions on Chinese partnerships. The latter seems particularly significant given the ongoing rise of China as a life sciences power. All of these topics are likely to shape decision-making well beyond 2026.