The obesity market is driving pharma’s return on investment (ROI) upward, with the projected return rising to 5.9% overall in 2024, but only reaching 3.8% if GLP-1 assets are excluded. At the same time, the average cost of developing a drug continues to rise and now stands at $2.23 billion, compared to $2.12 billion in 2023, according to Deloitte’s 15th annual analysis of the ROI from pharmaceutical innovation.

After finishing 2024 with a 15.25% decline, the BioWorld Drug Developers Index rebounded 6.93% in January, only to fall back to a modest 1.06% gain by the end of February. The Nasdaq Biotechnology Index and the Dow Jones Industrial Average followed a similar pattern, each rising about 5% by the end of January, before closing February at 3.13% and -2.48%, respectively.

The U.S. FDA approved 16 drugs in February, up from 12 in January but still falling short of the 2024 monthly average of 19 approvals. Just two of those were new molecular entities (NMEs), continuing a slower pace compared to the year’s average of slightly more than four NMEs per month.

Biopharma deal activity climbed in early 2025, reaching $37.38 billion in the first two months, up from $35.66 billion a year ago. February saw $8.76 billion in deals, down 69% from January’s $28.63 billion, which included 11 transactions valued at $1 billion or more. Early 2025 saw the second-highest biopharma deal total on record, trailing only the $42.19 billion logged in the first two months of 2022.