Two large strategic moves anchored the day: Isomorphic Labs closed a $2.1 billion Series B led by Thrive Capital to scale its AI drug-design engine, and Bristol Myers Squibb signed strategic agreements worth up to $15.2 billion with China's Hengrui Pharma covering 13 early-stage oncology, hematology, and immunology programs. On the clinical front, Alkermes' LUMRYZ hit its primary endpoint in the Phase 3 REVITALYZ trial in idiopathic hypersomnia, while Hims & Hers missed Q1 expectations as its pivot away from compounded semaglutide weighed on margins.
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Isomorphic Labs Closes $2.1B Series B to Scale AI Drug Design Engine
Alphabet-backed Isomorphic Labs closed a $2.1 billion Series B led by Thrive Capital — one of the largest private rounds ever for AI drug discovery — bringing total capital raised to about $2.6 billion, with participation from existing backers Alphabet and GV plus new investors MGX, Temasek, CapitalG, and the UK Sovereign AI Fund, according to Endpoints News and a company release. The Sir Demis Hassabis-led company will use the funds to advance its IsoDDE platform and pipeline toward first clinical trials by the end of 2026, building on partnerships with Eli Lilly and Novartis. pharmaphorum also reported the raise adds further validation to AI's role in pharma R&D. This signals that institutional investors are betting heavily on computational biology despite ongoing debate about AI's actual productivity gains in drug development.
Bristol Myers Squibb and Hengrui Pharma Sign Strategic Pact Worth Up to $15.2B Across 13 Programs
Bristol Myers Squibb and Hengrui Pharma entered strategic collaboration and license agreements covering 13 early-stage oncology, hematology, and immunology programs — four oncology/hematology assets from Hengrui, four immunology assets from BMS, and five jointly discovered programs — with BMS paying up to $950 million in committed payments ($600 million upfront, a $175 million first-anniversary payment, and a contingent $175 million 2028 payment) and the deal value reaching up to $15.2 billion including option exercises and milestones, PharmExec and STAT reported. The agreement is expected to close in Q3 2026. This move suggests BMS is accelerating its China strategy despite geopolitical headwinds, likely seeking access to Hengrui's discovery engine and platform technologies.
Bayer CEO Signals 'Careful but Aggressive' Return to Pharma M&A
Bayer is re-entering the pharma acquisition market after a five-year pause, CEO Bill Anderson announced on the company's Q1 earnings call, per Endpoints News. Anderson characterized the approach as "careful, but also aggressive," signaling Bayer's intent to rebuild its pharma portfolio following years of focus on agricultural business challenges and patent cliff pressures. Worth watching because Bayer's balance sheet capacity and therapeutic focus areas will shape mid-tier biotech valuations in oncology and rare disease.
Alkermes' LUMRYZ Hits Primary Endpoint in Phase 3 REVITALYZ Trial in Idiopathic Hypersomnia
Alkermes reported positive topline results from the REVITALYZ Phase 3 study evaluating LUMRYZ (sodium oxybate) extended-release oral suspension in adults with idiopathic hypersomnia, with statistically significant improvements in excessive daytime sleepiness versus placebo (p<0.0001), Fierce Pharma reported, with full data in an Alkermes press release. LUMRYZ — Alkermes' once-at-bedtime oxybate originally FDA-approved in May 2023 for narcolepsy and acquired through Alkermes' $2.1B purchase of Avadel — would compete with Jazz Pharmaceuticals' Xywav in IH if approved; Alkermes plans to file an sNDA with the FDA by the end of 2026. This signals Alkermes' ability to generate follow-on data that could support a meaningful label expansion against an entrenched competitor.
Hims & Hers Reports Q1 Sales Miss; Margins Hit by $33M Compounded Semaglutide Write-Down
Telehealth company Hims & Hers reported Q1 2026 revenue of approximately $608 million — below the high end of Street estimates — and a net loss of ~$92 million as gross margin compressed to ~65% from ~73% a year ago, with the company taking roughly $33 million in write-downs tied to compounded semaglutide ingredients and related expenses as it pivots to selling branded Novo Nordisk GLP-1s, STAT reported. The pivot away from compounded semaglutide access reflects regulatory and supply chain pressures as brand manufacturers ramp availability. The move suggests that telehealth's GLP-1 arbitrage window is closing faster than investors anticipated, with implications for Ro, Sesame, and other direct-to-consumer platforms.
EU Council and Parliament Reach Provisional Deal on Critical Medicines Act
On May 12, 2026, the EU Council and Parliament reached a provisional deal on the Critical Medicines Act covering roughly 270 medicines deemed critical to the region's health security — including antibiotics, insulin, and painkillers — to diversify supply chains, enable joint procurement among member states, embed resilience requirements in public procurement, and incentivize EU-based manufacturing of critical medicines and their active ingredients, pharmaphorum reported, with the formal text outlined in a European Council press release. The provisional agreement still requires Council and Parliament endorsement and legal-linguistic revision before formal adoption. This signals Brussels is moving toward a more interventionist stance on pharmaceutical supply security after 136 medicines were recorded in short supply between January 2022 and October 2024.
Boehringer Ingelheim Announces Antibody Platform Deal
Boehringer Ingelheim entered an antibody collaboration agreement, part of a broader set of partnership announcements that included deals from Vistagen, Enterprise Therapeutics, Cerevance, and Memento Medicines, according to a roundup from Endpoints. Details on financial terms and specific targets were not disclosed. Worth watching because Boehringer has historically been selective in external antibody partnerships, suggesting this platform may address a gap in its immunology or oncology pipeline.
Pharma Lobbying Surges 23% as TrumpRx Companies Spend Over $130M
The 17 pharmaceutical companies participating in the Trump administration's TrumpRx initiative spent more than $130 million on federal lobbying in 2025, a nearly 23% increase year-over-year, per STAT's Pharmalittle. The surge reflects industry efforts to shape drug pricing reforms, Medicare negotiations, and potential changes to the Inflation Reduction Act. This signals that despite public commitments to pricing discipline, large-cap pharma is aggressively defending margin-protecting policies at the federal level.
What to Watch
- Isomorphic's Pipeline Readouts — With $2.1B in new capital, watch for the first clinical candidate nominations from Isomorphic's AI platform and how they compare to traditional discovery timelines in partnership announcements with Lilly and Novartis.
- Bristol-Hengrui Collaboration Details — The $15.2B valuation suggests significant pipeline depth; monitor for asset-level disclosures, China regulatory filings, and potential political scrutiny given current U.S.-China biotech tensions.
- Bayer's M&A Targets — Anderson's "aggressive" posture suggests Bayer may pursue tuck-in oncology or rare disease acquisitions in the $2-5B range to offset Xarelto patent expiration impacts.
- EU Medicine Stockpiling Mandates — The provisional agreement could impose new obligations on manufacturers to maintain strategic reserves, potentially affecting generic producers and prompting supply chain restructuring across Europe.
Market Snapshot
- AI Drug Discovery Valuation: Isomorphic's $2.1B raise at what is likely a multi-billion-dollar post-money valuation sets a new benchmark for AI-native biotech companies, well above recent rounds for Recursion ($200M) and Insilico Medicine ($400M).
- China Pharma Partnerships: Bristol's Hengrui deal represents one of the largest Western-Chinese pharma collaborations since AstraZeneca's Gracell acquisition, reflecting continued appetite for China assets despite regulatory and geopolitical risks.
- Telehealth GLP-1 Exposure: Hims' $33M write-down on GLP-1 strategy underscores the sector's vulnerability to brand supply normalization, with similar exposure likely at Ro, Henry Meds, and other compounded semaglutide providers.
