A new report from JP Morgan, in partnership with Dealforma, has proven that medtech mergers and IPOs are alive and well in 2025.
The Q3 ‘25 Biopharma & Medtech Licensing and Venture
Report
, published at the beginning of October, highlights the latest activity in medtech, from funding rounds to capital raised.
Medtech IPO and M&A activity in Q3 handily surpassed full-year numbers in 2024, according to the report, signaling a high amount of interest in the space.
“The IPO market has had a challenging year broadly across healthcare. Medtech has been the bright spot in life sciences, certainly over biotech, for IPOs,” Kathryn McDonough, Head of Life Sciences of J.P. Morgan’s Innovation Economy business and a key contributor to the report, told
MD+DI.
“It's a combination of broader macro and investment thesis considerations, and if you look at medtech IPOs that have been done, they are closer to going EBITDA positive than the cohort before them, they are coming in with strong syndicates, which shows public investors that they have that backing, they have that support of capital.”
There were 67 medtech venture rounds in Q3, totaling $2.9 billion and bringing the 2025 year-to-date total to $9.5 billion across 259 rounds. In addition, four medtech IPOs raised $568 million on NASDAQ and NYSE in Q3 2025, bringing the 2025 year-to-date IPO volume to $1.5 billion across seven offerings of $15 million+ on U.S. exchanges.
This is a considerable number, especially considering that there were no medtech IPOs in 2023, and just four in all of 2024.
“If you think about public investors and what they are looking for for their funds and how they operate, medtech provides revenue opportunities and is soon to be cash flow positive. It's an easier, more palatable investment thesis for a public investor. Biotech has a longer runway to commercialization to break even or become EBITDA positive,” McDonough said.
“I think people are still scrutinizing the fundamentals of a business so they are going to be picking investments accordingly. Strong syndicate, near cashflow positive as medtech usually have revenues, and a faster trajectory to more of a cash flow generative business.”
Medtech M&A activity saw a huge uptick in Q3, with 65 transactions, the most active quarter since 2022. Those transactions totaled $21.7 billion in upfront cash and equity, the second-highest quarterly value over the same period. Median M&A upfront payments rose to $177 million.
Some notable Q3 M&A includes Waters Corp's merger with Becton Dickinson's Biosciences & Diagnostic Solutions business for approximately $17.5 billion,Terumo Corp’s acquisition of OrganOx for $1.5 billion, and ArchiMed Group’s acquisition of ZimVie Inc. for $730 million.
McDonough told
MD+DI
that she’s hopeful this trend will continue in 2026. “I'm hoping it's going to continue on the current trajectory. We have a lot of larger medtech companies that are looking at opportunities. These larger companies are always looking to develop their pipelines and products through acquisitions, and I hope that will continue” she said.
“It's also a lot to do with what private companies are looking at in terms of how founders are seeing an exit strategy for themselves. Are they looking to go public, or are they looking to build and sell? I think it'll be healthy. All of the micro factors you want in place exist, and it's the macro uncertainty that is plaguing everyone in any sector right now. You have high interest rates, tariff concerns, supply chain concerns. Within the micro segment, things are ready to go.”
While some investments boomed, medtech licensing partnerships and venture funding struggled to surpass previous years in Q3. A total of 21 medtech licensing partnership deals were announced, totaling $7.9 billion, with over $126 million in upfront payments. The 2025 year-to-date total reached $10.1 billion, with $376 million committed upfront. That represents
4% of total deal value, tied for the second-smallest upfront share in nearly a decade. Analysts blame risk aversion for the drop.
Though medtech venture funding was up quarter-over-quarter in Q3, it has seen a decline year-over-year. The sector has still attracted some meaningful interest from venture investors, with $9.5 billion raised across 259 rounds year-to-date.
Another change highlighted by this year’s report shows a potential shift in life science and medtech hotspots geographically. Two markets attracted the majority of medtech venture investment in the U.S. in the last year– $4.4B across 89 rounds in the Bay Area in 2024-25 and $2.6B across 53 rounds in the same timeframe in Boston. San Francisco is now outpacing Boston in what is known as an ongoing rivalry between the two life science-focused hubs.
“I think it's no secret that you have a lot of AI concentration in San Francisco. It is an ongoing healthy rivalry in the life sciences space, but I have to believe the concentration of AI and tech in the Bay Area is contributing to the change,” McDonough told
MD+DI.
Medtech is a continuously changing beast, as new developments come onto the market rapidly and investors fight to keep up. While rapid change is possible across all industries, this report signals a strong 2025 for medtech financially, and sets the industry up for more growth and development in 2026.
“Within medtech it’s the general trend of, things are happening faster and innovation is continuing to improve efficiencies and processes that exist within the medtech space,” McDonough said.
“We are seeing the convergence of health tech and tech in the medtech and the tools and diagnostic spaces. It's a really interesting time to be in this space, whether you are doing cash management or you are a founder or scientist. The innovation taking place is really cool, and it is great to be a part of and seeing what companies are doing. It's great to be along for the ride.”