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Recent Trends in Medtech Deal Activity

  • Writer: Fraol Galan
    Fraol Galan
  • 5 hours ago
  • 4 min read
A cluster of green spheres grouped together at the center, surrounded by scattered silver spheres — illustrating how capital in medtech is concentrating in fewer, high-conviction assets while broader deal participation remains fragmented

Medtech deal trends have evolved meaningfully since 2023, with changes in M&A volume, venture financing, licensing structures, and public market access reshaping how capital flows.


What Happened in Deal Activity


Since 2023, medtech deal activity has rebounded, with total announced values reaching ~$61B in 2025, up from ~$45B in 2024 and ~$26B in 2023 (1). This trend has carried into 2026, with Q1 generating ~$27B across 38 deals (Figure 1). 


A bar and line chart showing medtech M&A deal activity from 2023 through Q1 2026. Total deal value rose from $25.8B in 2023 to $60.8B in 2025, while deal count peaked at 196 in 2025 before dropping sharply to 38 in Q1 2026 — reflecting rising deal values concentrated across fewer transactions.
Figure 1. Medtech M&A Deal Activity, 2023 – Q1 2026

The observed recovery is not categorically widespread. While total value has increased, overall deal participation remains below past years (1), this suggests a more selective environment. The concentration in activity is in fewer, larger transactions. Capital is directed toward milestone-proven technologies that demonstrate clearer clinical and commercial validation


Where Has Capital Been Flowing?


The allocation of capital has skewed toward large-cap strategic acquisitions and later-stage venture financing. In Q1 2026, two transactions represented a substantial share (~94%) of total deal value: Boston Scientific’s ~$15B acquisition of Penumbra (3) and Danaher’s ~$10B acquisition of Masimo (4).


Venture funding trends reinforce this shift. In Q1 2026, ~$2.5B was invested across 79 rounds, with ~ $2B concentrated in Series B and later-stage financings (1). Annual venture deal count declined from 635 in 2021 to 354 in 2025 (1). With larger amounts of capital being invested in fewer companies it likely reflects appetite for assets that demonstrate stronger evidence of scalability and a proven lower risk profile.


Medtech Deal Structure Trends


Deal structuring has evolved alongside this increased selectivity. Licensing activity totaled ~$5B in Q1 2026 (1). Most of the value in these deals was tied to milestone-based payments rather than upfront cash.


The nature of deals has shifted to buyers paying less upfront and more overtime as companies hit key milestones.  These payments appear to be tied to clinical, regulatory, or commercial achievements rather than capital simply being committed at signing. As a result, emerging companies face a higher burden of proof to unlock full deal value.


Portfolio Changes


Companies have shown a willingness to increase their activity toward active portfolio reshaping. Spin-offs and divestitures accounted for ~34% of total deal value in 2025, up from a five-year average of 29% (2). This shift reflects a greater strategic focus, with companies using these mechanisms to narrow portfolios around core.


Several large players have executed or announced divestitures consistent with this trend. Becton Dickinson carved out its biosciences and diagnostics unit for ~$17.5B (5). Medtronic separated its diabetes business as a standalone entity (6). Also, Johnson & Johnson is exploring a potential sale of its orthopedics unit for $20B+ (7). Together, these actions suggest that diversification is being deprioritized in favor of increasing focus on core businesses.


Public Market Activity


Public market activity has partially recovered but remains below prior highs. In 2025, the medtech IPO market produced eight offerings raising ~$2B, the strongest total since 2021 when 35 IPOs raised ~$7B (1). The 2025 rebound suggests a partial reopening of public market access for established commercial-stage companies. Kestra Medical Technologies illustrates the type that can easily access public markets: scaled, operationally mature businesses with clear operating models (8). Raising ~$202M to expand its wearable cardiovascular platform, which is in use at over 550 U.S. Hospitals.


In Q1 2026, a single IPO, a Medtronic diabetes spinoff MiniMed Group, raised approximately $560M at a market cap of ~$5.6B (9). MiniMed carried different financial characteristics than Medtronic’s core portfolio, making IPO a viable mechanism for executing a portfolio separation rather than a signal of broader IPO market conditions. Nonetheless, the broader IPO viability trend seems increasingly tied to maturity and proven success rather than early-stage growth narratives.


The View from the Crow’s Nest


As M&A activity accelerates and portfolio reshaping becomes a central feature of medtech strategy, the decisions companies face around asset prioritization, partnership structuring, and growth strategy are becoming more analytically demanding. At Spinnaker, we work with life sciences companies on exactly these questions, from corporate and portfolio strategy to partnership economics and primary market research that informs each.


If you are interested in learning more, get in touch at strategy@spinnakerLS.com. 

Spinnaker offers true partnership and comprehensive guidance to help leaders navigate the complexities of the Life Sciences industry and chart a path to success. From early-stage market assessment through commercial execution and ongoing lifecycle management, we deliver tailored solutions to ensure optimized practicable results.

References

  1. J.P. Morgan. "Q1 2026 Medtech Licensing and Venture Report." J.P. Morgan Commercial Banking, April 2026. https://www.jpmorgan.com/content/dam/jpmorgan/documents/cb/insights/outlook/jpm-medtech-deck-q1-2026.pdf

  2. Bain & Company. "M&A in Medtech: The Boom in Portfolio Reshaping." Bain 2026 M&A Report, January 2026. https://www.bain.com/insights/medtech-m-and-a-report-2026/

  3. Boston Scientific Corporation. "Boston Scientific Announces Agreement to Acquire Penumbra, Inc." Press Release, January 15, 2026. https://news.bostonscientific.com/2026-01-15-Boston-Scientific-announces-agreement-to-acquire-Penumbra,-Inc

  4. Kelly, S. "Danaher to Buy Masimo for $9.9B to Boost Diagnostics Portfolio." MedTech Dive, February 2026. https://www.medtechdive.com/news/danaher-to-buy-masimo-for-99b-to-boost-diagnostics-portfolio/812320/

  5. Reuters. "Waters to Merge with Becton Dickinson’s Biosciences & Diagnostics Unit in $17.5 Billion Deal." Reuters, July 14, 2025. https://www.reuters.com/en/waters-merge-with-bectons-biosciences-diagnostics-arm-175-billion-deal-2025-07-14/

  6. Medtronic. "Medtronic Announces Intent to Separate Diabetes Business." Press Release, May 21, 2025. https://news.medtronic.com/2025-05-21-Medtronic-announces-intent-to-separate-Diabetes-business

  7. Reuters. "Johnson & Johnson Explores $20 Billion Sale of Orthopedics Unit." Reuters, February 19, 2026. https://www.reuters.com/legal/transactional/johnson-johnson-explores-20-billion-sale-an-orthopedics-unit-bloomberg-news-2026-02-19/

  8. MassDevice. "Wearable defibrillator maker Kestra Medical goes public with upsized $202M IPO." MassDevice, March 7, 2025. https://www.massdevice.com/kestra-medical-goes-public-upsized-ipo/

  9. MassDevice. "MiniMed Completes IPO as Medtronic Separation Continues." MassDevice, March 2026. https://www.massdevice.com/minimed-completes-ipo-medtronic-separation-continues/

 

 

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