Innovation has always been the blood pumping through the body of the pharmaceutical industry, but in recent years the supply seemed to be getting poorer.

Yet now a slew of breakthroughs in treatment for diseases like Hepatitis C, Ebola, malaria and even Alzheimer's, the memory-destroying condition on which much time and effort has been spent to little avail so far, has prompted hope of an era of new ideas and treatments in the industry.

So is this a new start for big pharma, mired for years in a cycle of patent expiries and chasing new blockbuster drugs which disappointed, or a false dawn?

"The traditional blockbuster model doesn't work any more," Luca Raffellini, director of consulting, business & financial services at Frost & Sullivan, told CNBC.

"There's the opportunity to address and cure a much broader spread of diseases. The fundamental reason is that there's a long term fundamental move towards an older and older average age, so there are a lot more chronic diseases which are difficult to treat. If anything, there's even more innovation than before."

New advances in regenerative medicine and diagnostics also seem to be appearing to finally pay off commercially.

There is a new sense of optimism among investors and analysts. HSBC analysts recently produced a punchy, bullish note on the European pharma sector, which argued that "the sector's re-rating is set to continue", "companies are largely through the patent cliff period", and slapped Buy ratings onNovartis (Swiss Exchange: NOVN-CH), Sanofi (Euronext Paris: SAN-FR), Bayer and GSK (London Stock Exchange: GSK-GB).

Rather than internal advances, many of the most exciting new treatments at big pharma companies are as a result of buying in scientific breakthroughs made elsewhere rather than concentrating on in-house research and development - and this is set to continue. Global healthcare M&A volume stands at is at a year-to-date record high of $422.8 billion this year, after a torrent of deals motivated by both record cash piles and tax benefits, as well as innovation. The latest bid to rock the sector is Shire's $30 billion attempt to gain control of Baxalta, the rare diseases company spun out of Baxter in June.

"There's a huge flow of M&A that's driving the sector," Jo Pisani, UK pharma and life sciences consulting leader at PricewaterhouseCoopers, told CNBC.

"Many deals have been around strategic areas that people don't understand at the time - AstraZeneca and MedImmune, which got AZ into immuno-oncology, for example."