The biopharma industry is at an inflection point as it enters 2026. Discoveries from the past year will be applied and scaled, particularly across AI-enabled drug development, advanced modalities and cardiometabolic disease treatment. These advancements will occur against a backdrop of evolving regulatory expectations and newly developed digital tools that will reshape how therapies are developed, delivered, and experienced.
Drug discovery and development will continue to benefit from AI
Companies are moving beyond exploratory AI pilots and beginning to embed AI across the entire drug development value chain, enabling shorter timelines, lower costs, and more personalised therapies.
AI will reshape target identification by rapidly analysing large biological and genomic datasets to uncover novel disease pathways and rank targets by probability of success, which is work that previously required years of manual effort. In molecule design, generative models will accelerate the creation and refinement of candidates with desired properties, reducing synthesis cycles and experimental failures. Within clinical development, AI will enhance patient selection, forecast enrolment risks, support adaptive trial design, and interpret interim data to enable faster decision-making. Collectively, these applications show AI shifting from a supportive capability to a core driver of R&D productivity.
As regulators start offering clearer guidance on the use of AI-generated evidence, adoption is expected to increase, and measurable productivity gains will start to emerge. Regulatory clarity will reduce perceived risk and increase confidence in AI-enabled tools, paving the way for broader deployment and meaningful productivity gains across the sector.
Regulatory expectations will continue to increase
Speaking of regulation, this will play a bigger role in shaping development decisions, especially in Europe, where efforts to update rules on evidence requirements, unmet needs, and incentives are still underway. Examples include the rollout of EU joint HTA assessments, ongoing reforms to EU pharmaceutical legislation, including the Critical Medicines Act and EU Pharma Package, and MHRA plans to install sovereign marketing authorisation and point-of-care manufacturing frameworks in the UK.
This regulation is largely driven by how quickly new therapies and technologies are advancing, which is forcing regulators to adjust their frameworks so they can keep pace with innovation.
As a result, companies will place greater emphasis on trial design, endpoint selection, and real-world evidence to meet payer and health technology assessment (HTA) requirements. Access considerations will increasingly drive portfolio choices, as companies require a closer assessment of whether patients can actually obtain therapy, dependent on reimbursement, pricing, and coverage decisions by health systems.
Advanced modalities will be put to the commercial test
Investment in advanced modalities such as cell therapy, mRNA and protein degraders is expected to rise. If 2025 marked a breakthrough year for these modalities, driven by advances in artificial intelligence, gene editing and new therapeutic platforms, 2026 will test whether they can be manufactured reliably, at scale and at sustainable cost.
Investors and regulators will expect clearer proof points that these therapies deliver durable clinical benefit and commercially viable uptake. Programmes with strong biology but no scalable delivery model will struggle to attract funding. Those that combine breakthrough science with credible plans for manufacturing, supply chain, regulatory strategy and pricing will stand out.
At the same time, capital allocation across the broader biopharma pipeline is becoming more disciplined. R&D budgets are shifting toward scalable, multi-asset platforms and technologies capable of generating repeatable returns, rather than single, high-risk bets. Leadership teams and investors are placing greater emphasis on risk-adjusted ROI, assessing probability of success, development timelines, capital intensity and long-term pricing sustainability more rigorously than in previous cycles.
As a result, programmes across all modalities will increasingly be judged not only on scientific promise, but on capital efficiency and their ability to generate durable, attractive returns at scale.
Digital will continue to be a priority
Digital tools will increasingly support evidence and patient experience rather than sitting alongside therapies as standalone offerings. Remote monitoring and digital biomarkers will play a bigger role, enabling more continuous and real-world insights for therapies across clinical development and commercial usage. Adherence solutions will also expand to help patients manage complex therapies and give developers data on dosing, persistence, and patterns that can influence pricing and access negotiations.
Cardiometabolic disease will remain a major area of focus
Demand for next-generation incretin-based therapies, like GLP-1 Receptor Agonists (e.g. Ozempic) and DPP-4 Inhibitors, will continue to increase as their effectiveness across obesity, diabetes, and cardiovascular risk reduction is evidenced. The global GLP-1 drug market’s size grew by approximately 18% in 2025, with market values reaching over $60 billion USD, according to a Towards Healthcare Report.
As these therapies reshape treatment pathways, companies will increasingly reposition adjacent assets to demonstrate clear, complementary value. Large-scale outcomes trials are expected to clarify benefits in areas such as heart failure, kidney disease, fatty liver disease and even sleep apnoea. If successful, these trials will further expand both the clinical relevance and commercial potential of incretin-based therapies.
The mainstream adoption of these medicines is also influencing broader healthcare delivery. Treatment guidelines are evolving, and clinicians are rethinking chronic disease management models. Accessibility will remain front of mind as companies seek to capture delayed adopters, evidenced by the development of oral GLP-1 formulations alongside injectable options.
The success of GLP-1 therapies is also reshaping capital allocation across large pharmaceutical companies. With many global pharmas operating from revenue bases exceeding $50 billion, only assets capable of generating multibillion-dollar peak sales can materially influence growth and shareholder returns. GLP-1s have demonstrated that highly prevalent chronic diseases can support franchises of this scale when companies invest early, fund extensive outcomes programmes and build manufacturing capacity ahead of demand.
As a result, leadership teams are rebalancing portfolios toward mass-market opportunities while applying greater scrutiny to specialty and niche programmes that, although innovative, may lack the scale to drive meaningful long-term shareholder value.
Deals will stay active but remain selective
There were a number of high-profile mergers and acquisitions that occurred in 2025, including Johnson & Johnson’s $14.6 billion USD acquisition of Intra-Cellular Therapies to boost its neurological portfolio. From these deals, we can see investors are prioritising therapy solutions that generate repeatable pipelines rather than one-off products to improve risk diversification and long-term value creation.
As partnering and M&A continue to concentrate on differentiated late-stage assets and scalable platform technologies, companies with multi-asset potential are positioned to attract a disproportionate share of capital and strategic interest. As mentioned above, teams across the board are increasingly looking for platform assets, and are pushing portfolios toward areas with greater ROI potential.
Simon Middleton, Partner
Simon Middleton is a Partner at L.E.K. Consulting. He is a member of the Life Sciences practice and has worked for both clients and investors in the pharmaceutical, biotech and medtech industries. Simon has extensive experience across a range of therapeutic areas including cardiovascular diseases, metabolic diseases, pain and oncology.
