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The Market for PBMs Slows in 2016

Magellan Health, Inc. (NASDAQ: MGLN), a healthcare management company specializing in special populations and pharmacy benefits management, has just acquired privately held Veridicus Holdings, LLC. The sellers are Gauge Capital, company management and other unnamed backers. Based in Salt Lake City, Veridicus is a pharmacy benefit management (PBM) company that uses proprietary software to integrate pharmacy, medical and lab data to drive targeted interventions for complex patient populations. The $74.5 million deal gives Magellan access to Veridicus’ 225,000 members. Veridicus also owns and operates a fully licensed insurance company which serves members enrolled in the Medicare Part D... Read More »

CROs Are Back, Many with Specialties

We’ve documented the increase in biotechnology acquisitions and license deals by pharmaceutical companies in previous posts. But the impact of pharma’s move away from in-house R&D has benefited other sectors of the healthcare industry, particularly clinical research organizations (CROs). For those outside the technology side of healthcare, CROs provide outsourced research services to the pharmaceutical, biotechnology, and medical device industries on a contract basis. Through mid-November, we’ve seen an increase of 325% in deal volume for CROs, compared with the year before. In 2015, just five deals for these targets were announced. So far this year, 17 are on the... Read More »

What U.S. Hospitals Are Acquiring in 2016

Hospital acquisitions have surged since the Affordable Care Act was passed in 2010. That year, 76 deals were announced, with a U.S. hospital or health system as a target. By 2012, 107 transactions were recorded for hospital targets, and that still stands as the highest number of deals per year. Only 2015 came close, with 102 hospital transactions. Through mid-November, there have been 79 deals announced with U.S. hospitals or health systems as the target. But what are U.S. hospitals acquiring for their own financial health? Other hospitals or health systems make up the majority of targets every year, of course.  So far this year, through mid November, 66 transactions... Read More »

October M and A Settles into Second Place

What’s a synonym for “slowdown?” We’re as tired of writing about monthly deal volume dropping off as you probably are of reading about it. But M&A activity in October 2016 can only be summed up as slackening, declining, decelerating. Preliminary deal volume is now at the second-lowest level of the year, just 112 transactions. Only January’s deal volume was lower, at 104 transactions. We may have a few additions to October’s total as the fourth quarter grinds on, but it’s not typical to find another 15 deals. Deal value also dropped off. At $12.8 billion, it ranks as the second-lowest level of spending for the year. July 2016 still holds the honor of being the slowest month for... Read More »

Medical Staffing Companies Attract Private Investors

Labor shortages in the healthcare industry aren’t a new topic. Earlier this year, the Association of American Medical Colleges warned that the United States could lose as many as 100,000 doctors by 2025, up to one-third of those being primary care physicians. A shortage of registered nurses has been discussed since 1965, by one account. That makes the market for medical staffing companies of particular interest to investors. M&A activity in this subsector has grown in recent years, from a single deal in 2013 to eight deals in 2015. Through the end of October 2016, six deals targeting medical staffing companies are on the books. The majority of acquirers have been another staffing... Read More »

Q3:16 Health Care M&A Results: Context Is Everything

Brace yourself. The third quarter results for health care mergers and acquisitions  signal a hard tap on the brakes, both in deal volume and value. That’s compared with the robust second quarter, and the same quarter a year ago. Before we go any further, though, we must note that, compared with all previous third quarters stretching back to 2000, the third quarter of 2016 doesn’t look that bad. Some 369 transactions are now on the books for Q3:16, which ranks this quarter as the second-highest in deal volume for any previous third quarter. The top-ranked third quarter, coincidently, came a year ago, when Q3:15 racked up 411 transactions. So Q3:16’s deal volume slid 10% compared with the... Read More »