Healthcare deal value in the second quarter totaled $138.7 billion, a slight 7% decrease from the first quarter’s $149.0 billion. Both quarters in 2019 featured a single, mega-billion-dollar deal—the $74 billion Bristol-Myers Squibb/Celgene deal in Q1 and the $87 billion AbbVie/Allergan hook-up in Q2—while the second quarter of 2018 included Takeda’s $81.5 billion deal for Shire plc.
The graph below seems to indicate something terribly wrong happened in the second half of 2018, but the spending totals of those two quarters are more typical than the $100-billion-plus quarters that began in Q4:17. Economic uncertainty is still very present in mid-2019 and could grow into a recession at some point in the not-to-distant future. Those lower-spending quarters may return, if that happens.
The technology sectors, which include Biotechnology, eHealth, Medical Devices and Pharmaceuticals, typically dominate the services sectors in spending. The second quarter results show that pattern continues. The technology side accounted for 89% of the quarter’s spending and services deals accounted for only 11%, its lowest share in the past five quarters.
In Q1:19, the median price per deal was $23.0 million, lower than the previous quarter’s median price of $38.0 million. The average price of a transaction in Q2:19 was $895.2 million, based on the 156 transactions that disclosed financial terms.
Source: HealthCareMandA.com, July 2019