New York – October 19, 2026 -- Global MedTech M&A value rose 160% in the first half of 2026 versus the same period of 2025, with total disclosed deal value reaching roughly US$130 billion, the highest level in more than a decade, according to the 20th edition of EY US's Pulse of the MedTech Industry report.
The recovery is narrow. EY found it was driven by a limited number of blockbuster transactions rather than broad-based dealmaking.
Industry revenue reached $325 billion in the first half of 2026, up 7.1%
MedTech generated approximately US$650 billion in revenue in 2025, growth of 11%. First-half 2026 revenue of US$325 billion was 7.1% above the prior-year period. Therapeutic devices led growth, followed by non-imaging diagnostics, imaging, and lab equipment and tools.
Growth was highly concentrated among commercial leaders, which widened the performance gap across the industry. The sector rebounded from year-to-date lows in June but has underperformed broader markets in 2026. Negative investor sentiment and persistent global trade and supply chain uncertainty continue to weigh on it.
Financing hit a record $63 billion, with IPOs and debt supplying about 80%
MedTech financing reached US$63 billion in the year ended June 30, 2026, up 87% year over year and the highest in the last decade. Initial public offerings and debt made up around 80% of capital raised. EY reads this as a recovery driven by the reopening of public markets and strategic balance sheet financing, not by broad-based funding strength.
Venture capital fundraising stayed resilient in 2026 and skewed toward earlier-stage innovation. EY cites continued investor conviction in technologies that address significant unmet clinical needs.
Companies pairing R&D productivity with margin expansion returned 13.8% to shareholders
Growth was largely driven by a small group of high-innovation strategic leaders. Companies that delivered both high R&D productivity and EBIT margin expansion generated an average total shareholder return of approximately 13.8%.
Deal activity targeted next-generation technologies, including AI-enabled diagnostics, robotics, structural heart, diabetes care and minimally invasive therapies.
John Babitt, EY Global MedTech Leader, said that "discipline is essential to convert innovation into profitable growth."
AI moves into devices as FDA authorizations of AI-enabled products hit a record
The number of FDA-authorized AI-enabled devices is at a record and still growing. EY says intelligence is increasingly embedded in devices and the care pathways around them. Hardware design, clinical evidence and manufacturing quality remain fundamental, but are now complemented by the quality of the algorithms, data and digital services around the product.
Ambulatory surgery centers and direct-to-consumer channels open new growth markets
MedTech is expanding beyond traditional care settings. EY points to the rapidly growing ambulatory surgery center market and direct-to-consumer and direct-to-patient models as growth areas.
Diana Hoff, EY Americas Life Sciences Sector Leader, said margin pressure, supply chain risk and trade uncertainty will favor companies that embrace AI, make deliberate portfolio choices and build resilient operating models.