2025 Q1 Healthcare Market Report

Healthcare Equities Outperform Amid Market Volatility as Strategic M&A Activity Accelerates

Strategic acquirers capitalized on attractive valuations with over $27 billion in flagship transactions, led by J&J's $14.6B acquisition of Intra-Cellular Therapies and Stryker's $4.9B purchase of Inari Medical. Despite macro headwinds including elevated tariff policies and policy uncertainty, venture funding rebounded to $14.6 billion - the highest quarterly total since Q2 2022 - driven by mega-rounds including Isomorphic Labs' $600M Series A.

Life sciences venture activity showed signs of selectivity, with deal count dropping 27% and funding declining 37.5% as investors increasingly align capital to development milestones through tranche-based structures.