Big Pharma's $300 Billion Patent Problem Fuels Biotech Deals

Big Pharma faces $300 billion in expiring drug patents through the decade.

Total biopharma deal value could top $250 billion in 2026, the busiest year since 2019.

SBIO’s June rebalance added 37 names ahead of a wave of trial and takeover news.

According to PwC's midyear deals outlook, more than $300 billion in branded pharmaceutical revenue will lose patent protection by the end of the decade. That loss, known as a loss of exclusivity, is pushing large drugmakers to buy new drug pipelines rather than build them in-house.

ALPS Advisors' July spotlight shows the ALPS Medical Breakthroughs ETF (SBIO) holds mid-size biotech developers in that same targeted stage. That focus put the fund in the middle of June's biggest headline.

AbbVie Inc. (ABBV) agreed to pay $10.9 billion in cash for Apogee Therapeutics, Inc. (APGE), then SBIO's largest holding.

PwC's report also found large pharmaceutical companies are avoiding blockbuster mergers that draw heavy regulatory scrutiny. Midcap biotech bolt-on deals have become the sweet spot for dealmaking this year instead.

That shift is already showing up in the numbers. Total biopharma deal value is on pace to top $250 billion in 2026, according to PitchBook data cited by ALPS Advisors. That would mark the industry's strongest year since 2019.

Regulatory news added another tailwind. On June 17, the FDA signaled a more flexible approval path for serious and rare diseases, according to ALPS Advisors. Days later, Definium Therapeutics Inc. (DFTX) raised an upsized $700 million in stock.