With the strategy set to be kick-started by £1 million of Scottish Government investment, alongside more regional initiatives such as Glasgow City Region’s £25 million Open Call, the Scottish life sciences sector is looking at a significant funding boost in 2026.
As funding and regional initiatives begin to emerge, many life science businesses will be wondering how to turn this momentum into sustainable growth. For some, that will mean investing in research and development or expanding headcount. Others might want to move faster – which is where mergers and acquisitions come into play.
But is M&A one of the routes life sciences businesses should be considering when it comes to scaling up?
On the one hand, M&A can be fruitful, particularly in the life sciences sector where organic growth is seldom fast. Development timelines are long, regulatory approvals often dictate pace, and progress depends on specialist expertise which can be difficult to scale quickly. Bringing a new product to market can take years, meaning that even well-funded businesses may be constrained by factors outside their immediate control. It is this reality that often leads companies to consider strategic acquisitions as a more direct way to access new technology or build capability, particularly where acquiring an established platform or team can significantly shorten development timelines.
Choosing the M&A route, however, may not be the silver bullet some business leaders hope for, as it brings a different set of pressures.
Once capital has been secured and a transaction is actively pursued, scrutiny intensifies and assumptions that once felt reasonable are tested in far greater detail. For instance, funders expect a clear and credible explanation of what is being acquired, why it matters, and how it supports the long-term growth of the business. At this point, acquisitions need to be driven by strategy rather than momentum, with businesses required to demonstrate not just intent, but a clear purpose behind each acquisition.
This challenge is heightened in life sciences because transactions are often valued based on future potential rather than current revenues. Value is typically dependent on milestones that have yet to be achieved, whether technical, clinical or regulatory, which means deal structures and pricing must account for this uncertainty. As negotiations progress, greater attention is paid to how risk is shared, how value will be unlocked over time, and what happens if progress does not follow the expected path.
As a result, thorough due diligence becomes critical, because buyers need clarity on what they are acquiring and on any factors that could affect deal structure or pricing once the transaction completes. Intellectual property is often a key focus, especially for companies that have grown out of universities or collaborative research projects. It only has real value if ownership is clear and the business has the right to use and commercialise it. Where licences are incomplete or unclear or if rights cannot be transferred as expected, uncertainty creeps in and deals can quickly lose momentum.
Contractual arrangements also need careful attention as businesses move towards a transaction. Agreements that were considered acceptable in a start-up phase can create uncertainty once due diligence begins, particularly if they are informal or no longer fit the company’s direction of travel. Early legal advice can help to identify and address these issues in advance, ensuring contracts support growth rather than becoming obstacles when acquisition discussions are underway.
For life sciences companies, growth is as much about readiness as it is about ambition. Strategic acquisitions can create momentum, but it is careful planning and informed decision-making that determine whether that momentum is sustained. Mergers and acquisitions can play an important role, but only when they are approached with a clear purpose and a realistic view of the work that follows.
Ultimately, the businesses that succeed are those that prepare early, understand the risks, and put themselves in a position to turn growth acquisitions into durable, long-term value.
