2026 Clinical Services Mid-Year Update and Outlook

Aggregate Outsourced Pharma Services Trends

Based on a preliminary review of The Braff Group’s proprietary transaction database through Q2 2026, the sector is on pace for nearly 40% more M&A activity than in 2025 and 18% more than in 2024, the previous banner year holder.

Moreover, Q2 2026 deal flow was just a tad below the record set in the second quarter of 2024.

2025 Deal Flow Declines

So, what happened in 2025?

As Pitchbook put it, 

“A lack of new capital flowing into early-stage biotech and flattening Big Pharma research & development (R&D) spending have slowed demand for outsourced services, with contract research organizations (CROs) and contract development and manufacturing organizations (CDMOs) being most exposed to the downturn. [At the same time, 2025 brought significant regulatory and trade uncertainty.] [Taken together,] weaker demand likely led sellers to hold out for an improved funding environment (which 2026 appears poised to deliver).”

In short, with both funding and R&D coming back, so has M&A activity in OPS.

Clinical Services Drilldown

While on an aggregate basis, 2024 was a record year for OPS, if we focus on deal activity related to Clinical Services—the arm of OPS that includes clinical trial sites (and SMOs), CROs, and FSPs—2023 was its banner year. Then came the biotech funding slowdown, which disproportionately impacted the segment. 

As a result, Clinical Services deal activity fell 34% in 2024 as buyers gravitated toward Commercialization and Supply Services businesses, which were generally viewed as less dependent on clinical trial activity and biotech funding.

But the tide has begun to turn. After stabilizing in 2025, Clinical Services M&A activity has picked up meaningfully in 2026, particularly among sites, niche CROs, and specialized FSPs. Through 2ndQ, transaction activity is trending roughly 25% ahead of 2025 levels.

Several factors appear to be fueling renewed momentum in Clinical Services.

• As previously mentioned, biotech funding conditions are helping fuel the recovery. Stronger venture funding, a reopening IPO market, and renewed biopharma M&A are giving sponsors more confidence to advance clinical trials, creating additional demand for outsourced clinical partners.

• Despite recent FDA disruption, industry stakeholders remain focused on streamlining clinical trial execution and accelerating the path from discovery to approval. Coupled with a healthy and expanding drug development pipeline, these efforts are expected to support continued growth in clinical activity and increase demand for the outsourced providers that help bring new therapies to market.

• As funding conditions improve and clinical activity accelerates, sponsors remain focused on cost, speed, and execution. This emphasis is creating meaningful opportunities for specialized sites, niche CROs, and high-performing FSPs, whose differentiated capabilities are helping them capture a growing share of outsourced clinical work.

Taken together, these trends are restoring investor confidence in the Clinical Services segment. Buyers remain selective, but high-quality clinical trial sites, niche CROs, and specialized FSPs with differentiated capabilities, strong customer relationships, and a track record of execution are once again attracting significant interest.

Outlook

While we are bullish about the entire OPS market, and in particular, clinical services, if 2025 has shown us anything, external market forces can easily disrupt a sector. So, if you’re growing (but are past the hyper-growth stage – greater than 20% – that many companies experience at some point in their growth trajectory), depending on your personal goals and objectives, you may want to contemplate an exit over the next 12-24 months.

Editor’s Note: Experience has shown that more value is lost getting the timing wrong in a transaction than any other variable.  Check out our Viewpoints publication – When is the Right Time to Sell – to begin to get a better sense of where you might be today. Self-serving as it may seem, helping prospective sellers pinpoint their optimal exit conditions is one of the most valuable services we offer – at no charge. It’s never too early to begin a discussion with an experienced M&A advisor like, you know, The Braff Group.

Is Now the Right Time for You to Sell? Talk to Our Managing Director in Your Area.