Major pharmaceuticals firms like Pfizer Inc. (NYSE: PFE) and Novo Nordisk A/S (NYSE: NVO) have been fighting to spend large sums on smaller companies in the space in recent months (the former of these companies completed an acquisition of weight loss drug maker Metsera in November 2025). But while M&A activity is sometimes a sign of aggressive expansion, in this case, it may signal a response to a threat: a patent cliff that could see the loss of exclusivity of many of the top-selling drugs globally in the years to come.
Major drugs with collective annual sales of close to $175 billion will suffer this fate in the coming six years, and the figure gets much higher when considering smaller names too. Though this is a dangerous obstacle for many of the biggest pharma companies, it is also an opportunity for investors. The coming years are likely to bring an increasingly desperate flurry of M&A activity, which could lead to some new winners in the space. While it may be difficult for investors to predict which specific firms may come out on top, a pair of exchange-traded funds (ETFs) can position investors well to capitalize on volatility in the industry.
