It’s been a busy year for healthcare deal makers, and it’s not over yet. With slightly more than 1,700 deals announced as we went to press, this year’s deal volume has already surpassed 2017’s 1,607 total. Dollar volume is on par with last year’s total of $316.3 billion. At the moment, 2018’s spend stands at $316.9 billion.
We will likely see a few more big deals in the remaining weeks of December, just as in December 2017. That was the month that CVS Health (NYSE: CVS) and Aetna (NYSE: AET) announced their $77 billion tie-up, Catholic Health Initiatives and Dignity Health made their mega-merger public, Optum (NYSE: UNH) announced its $4.9 billion acquisition of DaVita Medical Group (NYSE: DVA), and a consortium of companies, led by Humana (NYSE: HUM), paid $4.1 billion for Kindred Healthcare (NYSE: KND). So more big deals aren’t out of the question.
This far into 2018, there are 42 deals priced at $1 billion or higher, with a combined value of $272.5 billion. Last year ended with 44 billion-dollar-plus transactions with a combined total of nearly $263 billion.
The list of top-10 deals in 2018 is crowded with the usual big targets. At the top, in first place, is Takeda Pharmaceutical’s (TSE: 4502) acquisition of Shire plc (NASDAQ: SHPG) for $81.5 billion (including assumed debt).
We would say that it’s the largest deal ever announced, but that would be Pfizer’s (NYSE: PFE) ill-fated hostile takeover of AstraZeneca (NYSE: AZN) for $118 billion in May 2014.
Takeda’s plans were made public in May 2018, but the deal hasn’t closed. In the first week of December, a major hurdle was jumped as Takeda shareholders approved the deal. If everything does go as planned, this transaction would be the largest healthcare deal ever to be consummated. Picky, yes, but we know our stuff.
The targets on this year’s top-10 list show that the biotechnology sector made a comeback in 2018. Five biotechnology deals made this year’s list, compared with only two in 2017. Only one pharmaceutical deal made the list each year.
In 2017, the Managed Care sector led the list with the CVS/Aetna deal, but there were four mega-deals for contract or clinical research organizations, including Pharmaceutical Product Development, Patheon NV and PAREXEL International.
This year, only three service sectors made the list, with targets Express Scripts (NYSE: ESRX), Envision Healthcare (NYSE: EVHC) and LifePoint Health (NASDAQ: LPNT). But 2018 isn’t over yet, and there could be a lot more where these deals came from. See you in 2019 to hash it all out.
