# The Biotech Patent Cliff & M&A - Week of June 1, 2026: Makary Out, ASCO Ignites a Pharma M&A Wave > Pharma and biotech newsletter for the week of May 28 to June 1, 2026. FDA Commissioner Marty Makary resigns and biotech loses its predictability anchor, while ASCO 2026 puts oncology back center stage and operators name the Inflation Reduction Act as the forcing function behind a roughly $75B pharma M&A wave. ## The Biotech Patent Cliff & M&A ### Week of June 1, 2026: Makary Out, ASCO Ignites a Pharma M&A Wave --- ```request-access variant: ghost heading: Want this kind of synthesis on your own coverage? buttonText: Request access ``` **TL;DR** - FDA Commissioner Marty Makary resigned after roughly a year, reportedly over White House pressure on flavored e-cigarette approvals. Biotech investors are "beside themselves," per [The Heart of Healthcare](http://url7324.matterfact.com/ls/click?upn=u001.idHmPrr2Geh7KYLAsTy7NkrIVb-2FgA4pmf2rMXQwGcOimV5mHZ9wHvHicS-2Bz3kjvb0jDSGcK3LSdeboWw1vfyoTYt8IxwOMBV38sDBYpXT0y1qI2iQb-2Flx3fZq-2BivRQaA7H-2Fc3-2F4mByS9-2Bp-2BgXpv8dw-3D-3Delc0_7mLGwmUci-2BLaXswv9WX1yTgqn3Wad-2FotHhzHgSNAZbUVbws46Nm2qWHknLVTMOuHbbw9I97hSJF4OFTT00-2FrFcl-2FcEvcAStobFqI0cn5IRjaFZbGzHDcxi0WCEZ2grZ9KvSQHEH1PbBvQAe48D5W9TLHLDKK5-2B20Q6I6oqSg0KWRpHWWbmppnL-2FsuIh3CTShiGSlp4-2B7SHaMhbAaL9PPeQ-3D-3D), the regulatory predictability anchor is gone. - ASCO 2026 kickoff put oncology back center stage. Roughly $75B of pharma M&A YTD 2026 cited on [CNBC Fast Money](http://url7324.matterfact.com/ls/click?upn=u001.idHmPrr2Geh7KYLAsTy7NkrIVb-2FgA4pmf2rMXQwGcOj2meFHxLyxbKf0-2BtTmUClGBXeF9xlWsvjpTUO5WUaY0DnrryKHCLhaazj6iQJ6Cj9GKAT8IBGUkgMTNF7zqeq5aDDx8T81es4Nn1lAuwyMgw-3D-3DMHiB_7mLGwmUci-2BLaXswv9WX1yTgqn3Wad-2FotHhzHgSNAZbUVbws46Nm2qWHknLVTMOuHbbw9I97hSJF4OFTT00-2FrFagpHRye70YpE-2FM6zQcDfHVbsf4aJbPFTmaYrqay5gVROY2hxg-2BLK1lh4T1IJHgmVlanHhGj68kHiC7VIqLl4giuB-2B9LGScP5ADOFwryaTmNTE9JQKG8f17NiviuQ4pjMw-3D-3D), with the Inflation Reduction Act explicitly named as the dealmaking catalyst: IRA is now the M&A narrative, not just the margin narrative. - Quiet week on the IRA Round 2 file itself. Zero podcast discussion of the 15-drug 2027 list, the Part B inclusion mechanism, the EPIC Act, MFN tariffs, or PBM reform. No GLP-1 negotiation commentary either. Plan accordingly into Q2 prints. ## What's New **FDA commissioner resigns; biotech loses its predictability anchor.** Hallie Tecco and Steve Krause spent most of "Digital Health Download" on FDA chaos. Makary lasted about a year; Krause, an operator-side digital-health investor, was blunt: *"I know my friends who invest in biotech, it's like they're just kind of almost besides themselves. They need to have some predictability in this agency."* Chris Klomp is reportedly involved in selecting the next commissioner. Tecco's framing was bleaker still: *"Every single FDA decision has really come down to being something that's a political or cultural debate. We can't just look at the data and the science anymore"* ([The Heart of Healthcare, June 1, 2026](http://url7324.matterfact.com/ls/click?upn=u001.idHmPrr2Geh7KYLAsTy7NkrIVb-2FgA4pmf2rMXQwGcOimV5mHZ9wHvHicS-2Bz3kjvb0jDSGcK3LSdeboWw1vfyoTYt8IxwOMBV38sDBYpXT0y1qI2iQb-2Flx3fZq-2BivRQaA7H-2Fc3-2F4mByS9-2Bp-2BgXpv8dw-3D-3DmkEw_7mLGwmUci-2BLaXswv9WX1yTgqn3Wad-2FotHhzHgSNAZbUVbws46Nm2qWHknLVTMOuHbbw9I97hSJF4OFTT00-2FrFbMBuWERMn7pMTM9Ta2g5RqD25mIAnJ4RmcDWXfb-2B8RadKGwDS4A5swn4eeHva4r5PueacdB55squaZEqAzYxpwe7STQI7mrNF1-2FYNie6aMCwezW-2F1DegI-2Bv-2F-2Fjy3xySYg-3D-3D)). This is the week's single biggest catalyst: every clinical-stage and label-expansion thesis just got a wider error bar. **IRA explicitly named as the M&A catalyst.** On CNBC's Fast Money ASCO setup, biotech operator John Flavin (CEO, Portal Innovation) tied the deal flurry directly to the negotiation framework: *"the Inflation Reduction Act has driven a lot of pharma into making deals as well because that window for being able to monetize the huge investment is shortening."* He pegged YTD 2026 pharma M&A at roughly $75B with ~30% of licensing flowing through Chinese assets, predominantly oncology ([CNBC Fast Money, May 29, 2026](http://url7324.matterfact.com/ls/click?upn=u001.idHmPrr2Geh7KYLAsTy7NkrIVb-2FgA4pmf2rMXQwGcOj2meFHxLyxbKf0-2BtTmUClGBXeF9xlWsvjpTUO5WUaY0DnrryKHCLhaazj6iQJ6Cj9GKAT8IBGUkgMTNF7zqeq5aDDx8T81es4Nn1lAuwyMgw-3D-3DVipk_7mLGwmUci-2BLaXswv9WX1yTgqn3Wad-2FotHhzHgSNAZbUVbws46Nm2qWHknLVTMOuHbbw9I97hSJF4OFTT00-2FrFT118yKMkvFA29ly-2Bv0qwz7DxWdFngtaBe3Etju0srnf7Bp9HqU1-2F8lMUjNfANFDJQQlXoJif4pKGvhu1YySDJjDCDH8JSNW-2B8jyrVvFg2DtbBA42yXGp6DuwJ5ClXLXQw-3D-3D)). Numbers are unverified, but the *narrative attribution* matters: operators are now openly naming IRA as the forcing function. **Keytruda patent cliff back in retail tape chatter.** Steve Grasso on Fast Money: *"If you look at the patent cliff and you look at Merck in particular losing Keytruda…"* No new data on the subcutaneous Keytruda Qlex line extension, the small-molecule-vs-biologic Round 2 question that matters for the franchise. But cliff anxiety is now retail-tape material, which historically front-runs sell-side downgrades by a quarter ([CNBC Fast Money, May 29, 2026](http://url7324.matterfact.com/ls/click?upn=u001.idHmPrr2Geh7KYLAsTy7NkrIVb-2FgA4pmf2rMXQwGcOj2meFHxLyxbKf0-2BtTmUClGBXeF9xlWsvjpTUO5WUaY0DnrryKHCLhaazj6iQJ6Cj9GKAT8IBGUkgMTNF7zqeq5aDDx8T81es4Nn1lAuwyMgw-3D-3DE4GX_7mLGwmUci-2BLaXswv9WX1yTgqn3Wad-2FotHhzHgSNAZbUVbws46Nm2qWHknLVTMOuHbbw9I97hSJF4OFTT00-2FrFa1IzrBmYL24sZYxARd4bM10gG7g70p53qlkKoTSCIYVM8HwFe5QLir-2FIAgYrtQYrkr25tWnpMq4n4oiA-2BT-2F2nFuNo5P-2FTgrd9xUE4hksxYNN9-2B2gG-2B5RnPgMbUCd33ISA-3D-3D)). **CMS ACCESS model went live: UNH, CVS, CI, HUM, CNC all aligned by 2028.** The chronic-care payment model selected 150 providers/digital-health companies for recurring Medicare payments. The aligned payer list is the read-through; notably, Hinge Health CEO Dan Perez publicly opted out, calling it a risk to *"one of the most vulnerable patient populations."* On Medicaid, Krause warned the "one big beautiful bill" cuts *"hasn't really been even felt yet,"* provider rate cuts and eligibility redeterminations don't bite until 2027 ([The Heart of Healthcare, June 1, 2026](http://url7324.matterfact.com/ls/click?upn=u001.idHmPrr2Geh7KYLAsTy7NkrIVb-2FgA4pmf2rMXQwGcOimV5mHZ9wHvHicS-2Bz3kjvb0jDSGcK3LSdeboWw1vfyoTYt8IxwOMBV38sDBYpXT0y1qI2iQb-2Flx3fZq-2BivRQaA7H-2Fc3-2F4mByS9-2Bp-2BgXpv8dw-3D-3DBbbM_7mLGwmUci-2BLaXswv9WX1yTgqn3Wad-2FotHhzHgSNAZbUVbws46Nm2qWHknLVTMOuHbbw9I97hSJF4OFTT00-2FrFfyiLk5eNJgsormGmBHa0YZl0twKWf1oRqZ-2B2SnsCQyg6ehq9FoqJj6C9l6Of5YIMvPL4h3ePdCvGUtOgb-2BaLcRW2vP4d1f05hBlyOc-2BwKWebVmvROFtALYC-2FpngduGFvw-3D-3D)). **The dog that didn't bark.** Zero podcast discussion this week of the IRA Round 2 selected list, Part B inclusion (the 2028 mechanism), the EPIC Act, MFN executive orders, pharma tariffs, PBM reform, or biosimilar uptake. GLP-1 Medicare pricing also absent. This is a "no debate" week, not a "no signal" week: the policy file went quiet while the tape rotated into ASCO setups and FDA leadership. ```request-access variant: inline heading: Want this kind of synthesis on your own coverage? buttonText: Request access ``` ## The Debate **Steel-man bull: manageable modeled headwind.** Round 1 MFPs are already in 2026 plan formularies; the cash-flow hit is in the numbers and largely behind us. Round 2 adds 15 drugs effective 2028, a 2027 P&L event, fully discountable, and the buyside has had 18 months to model it. Flavin's framing actually argues IRA is *creating* shareholder value by forcing portfolio refresh and accelerating M&A. FDA chaos hurts clinical-stage biotech far more than large-cap branded pharma carrying fully approved, reimbursed franchises. **Steel-man bear: structural US margin compression.** A politicized FDA turns label expansions and lifecycle extensions, the bridge mechanism large pharma uses to defend post-LOE franchises, into coin flips. Layer on the still-live MFN executive orders and tariff threats (no fresh commentary this week, but the policy stack hasn't gone away) and US gross-to-net erosion compounds. Round 2's expansion to Part B physician-administered drugs widens the kill zone meaningfully: Keytruda IV is the obvious 2030 target, and the subcutaneous conversion strategy is now an FDA-political question, not just a regulatory one. The small-mol-vs-biologic R&D pullback is real even if no executive said so on tape this week. ## Stocks in Play - **LLY**: *Bull:* ASCO setup constructive; Crossbridge Bio ADC tuck-in and vaccine deal expand pipeline; Isomorphic Labs AI partnership cited as a real edge. Seymour and Flavin both bullish on tape. *Bear:* Trulicity already in MFP; Mounjaro/Zepbound Medicare exposure compounds annually. *Watch:* ASCO data flow over the next two weeks. - **NVO**: *Bull:* Feinerman: *"I just can't believe how cheap it is."* Seymour long. *Bear:* Seymour again: *"perennial disappointment at this point… They should do an acquisition. They've tried."* GLP-1 negotiation timing remains the overhang. *Watch:* M&A activity; Ozempic Medicare spend trajectory into Round 3. - **PFE**: *Bull:* Seymour: *"I'm hanging tough on Pfizer, who again has an interesting flag planted in the oncology space."* Flavin cited an alleged "up to $10 billion" ADC BD deal, unverified. *Bear:* Eliquis already negotiated; Ibrance Round 3 risk; oncology pivot still unproven. *Watch:* confirmation (or refutation) of the Flavin ADC number. - **MRK**: *Bull:* Moderna/Merck melanoma vaccine progressing. *Bear:* Grasso explicitly flagged the Keytruda cliff; subcutaneous conversion now carries political dependency on the next FDA commissioner. *Watch:* Keytruda Qlex regulatory tone post-Makary. - **JNJ**: *Bull:* Justin Klein on [InvestTalk](http://url7324.matterfact.com/ls/click?upn=u001.idHmPrr2Geh7KYLAsTy7NkrIVb-2FgA4pmf2rMXQwGcOi5BBCQz9TEfFCRN3cRmCMhMDYKqzYL3-2BXOpTiJvtsRyTjdcIfFxvB3CKot-2Bs3CZ5ghis6tg5CyYX3O6GKeUm-2FcZy36RW81kW-2Bvkd3HLmfpgg-3D-3DC6VM_7mLGwmUci-2BLaXswv9WX1yTgqn3Wad-2FotHhzHgSNAZbUVbws46Nm2qWHknLVTMOuHbbw9I97hSJF4OFTT00-2FrFd7AGD65Ror1o3p512KOZonrBkCYAgy9PBZyUQ8P1PlZtGZsymU8-2FnSx1V5l-2FOVGrg6G7ouo7Qefa0yYBEoKPvptSXCrk5N-2BEAj7QVpORrrglwsQVe5cb8nIO4WGLRLjIw-3D-3D) framed it as *"a value stock. Good one to own over the long, long term,"* citing ~22x current / ~19x forward P/E, ~7%/10% EPS growth, ~26% ROE. Isomorphic Labs partner. *Bear:* Stelara biosimilar erosion accelerating; Imbruvica in MFP. *Watch:* Q2 print for MedTech vs Pharma divergence. - **AZN**: Named in the FDA real-time AI trial review pilot; the agency's chief AI officer suggested trials *"could compress overall trial duration… they think they can cut it in half potentially."* Bull-skewed for Tagrisso franchise defense. *Watch:* pilot scope updates. - **BMY, ABBV**: Not discussed on tape this week. No new datapoints. ```request-access variant: inline heading: Want this kind of synthesis on your own coverage? buttonText: Request access ``` ## Read-Throughs **PBMs / managed care (CVS, CI, UNH, HUM, CNC):** All aligned with the CMS ACCESS model by 2028, a soft positive for incumbent payers, but the bigger Medicaid story is the 2027 rate cuts and redeterminations no one has fully modeled. No PBM-reform-specific commentary this week ([The Heart of Healthcare, June 1, 2026](http://url7324.matterfact.com/ls/click?upn=u001.idHmPrr2Geh7KYLAsTy7NkrIVb-2FgA4pmf2rMXQwGcOimV5mHZ9wHvHicS-2Bz3kjvb0jDSGcK3LSdeboWw1vfyoTYt8IxwOMBV38sDBYpXT0y1qI2iQb-2Flx3fZq-2BivRQaA7H-2Fc3-2F4mByS9-2Bp-2BgXpv8dw-3D-3DaAgq_7mLGwmUci-2BLaXswv9WX1yTgqn3Wad-2FotHhzHgSNAZbUVbws46Nm2qWHknLVTMOuHbbw9I97hSJF4OFTT00-2FrFawJC6JdD41hAT9V8-2BMCOdf3Od7TZNW1LUsjKmmIBEcqhRCt1uZizxKLIk94YOOSlLMnze98zPBhOlfb2UfQ6M2KiRWppUtNvmEC5LeH2y-2BxLfmYhPqP-2BxuML-2BOZhWaJ5Q-3D-3D)). **Biosimilars / TEVA:** No coverage. Notable absence given live Stelara dynamics. **Small-mol vs biologic R&D mix:** Indirect read, the ADC/biologic skew in Flavin's M&A description is consistent with the pill-penalty thesis, but no executive said so on tape this week. **Ex-US strategy:** The single most striking ex-US datapoint was Flavin's claim that ~30% of licensing this year is from Chinese assets. Pharma is increasingly *sourcing* from China, not just selling there. ## What Changed vs Last Week This is the inaugural run of the newsletter. No prior baseline. ```request-access variant: banner heading: Run your own corpus. description: matterfact is deployed with select institutional partners. Request access to run it on your own coverage. buttonText: Request access ```