2025 Summary and 2026 Outlook

Life Sciences

By Cavendish

In 2025 healthcare remained an attractive sector due to significant capital inflows globally and the sector’s defensive, counter-cyclical profile appeals in a macro environment of uncertainty and late-cycle economic risks. Long-term demand drivers remain (ageing population, long term conditions, NHS pressures) and whilst there was a subdued level of activity in public markets, UK healthcare experienced robust transaction values and strong deal activity in 2025.

2025 Life Sciences Highlights

1- IPO 2- Growth capital transaction 2- Debt advisory transactions 4- new public client wins 6- ECM fundraises 8 MA transactions 41 public market clients 7 - Cavendish

Please see our 2025 Life Sciences Highlights here

#1 ranked adviser and broker to Life Sciences companies trading on the London Stock Exchange
Advising 1 in 4 of all UK public healthcare companies, including 2 of the largest life science companies on AIM

2026 Perspectives

We look forward to 2026 with much enthusiasm due to both macro and sector tailwinds. We expect equity markets to benefit from easing monetary policy and robust earnings growth, whilst structural themes such as AI adoption and digital transformation are cross-sectoral drivers that also support healthcare companies boosting productivity, diagnostics, and data capabilities. Healthcare equities and UK stocks are often viewed as balanced plays: offering structural growth with relative defensiveness in volatile markets.

The key sector drivers for 2026 are:

Demographics and Demand
Long-term demographic trends (ageing populations, chronic disease prevalence) underpin structural demand for healthcare services and care-related investments – a key reason investors allocate into healthcare infrastructure and specialist care.

M&A & Private Capital Deployment
Rising deal momentum – in 2025 UK healthcare saw significant increases in deal value, including strong private equity participation – even when overall deal volumes were soft. PE targets range from specialist services to biotech and MedTech.

Consolidation & platform strategies
We can expect to see more Buy & Build activity – particularly in HealthTech, MedTech services, and fragmented sub-sectors like revenue cycle management or regional care providers, as investors roll up smaller players to create scalable platforms.

NHS capacity constraints will remain a driver
Pressure on the NHS (backlogs and resource limits) is arguably fuelling outsourcing and private sector growth, which in turn attracts strategic and financial buyers into UK healthcare service providers.

HealthTech, MedTech & AI adoption
The maturation of surgical robotics, digital therapeutics, and AI in diagnosis and workflow tools is a real driver of investment interest – with potential liquidity events (IPO or strategic acquisitions) in innovative UK companies in 2026.

Digital health & predictive care
Digital platforms and AI tools are increasingly seen as value drivers for operational and clinical efficiency – galvanising both strategic acquisitions and capital markets activity.

Favourable governmental conditions
Many of the early stage life sciences business fit squarely within the Government’s agenda to help high growth, IP rich companies and we have seen a number of changes such as the increase in the allowances for Venture Capital Trust and Enterprise Investment Schemes that are likely to materially benefit these companies.

Cavendish remains the number one adviser to public healthcare companies and is committed to supporting clients as the sector continues to evolve. Please contact the Cavendish team to discuss market developments, strategic opportunities and insights for the year ahead.