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Generic Drug Deals Are Getting Rarer
The patent cliff is boosting the volume and market share of generic pharmaceutical products. Generics account for 88% of all prescriptions filled annually in the United States, according to the latest IMS Report. For good reason, since generic drugs typically cost between 50% to 70% less than their branded equivalents. Governments and managed care companies have historically been proponents of generic drugs, which can lower the cost of healthcare across the entire continuum. 2015 was the year of the M&A boom in the generic drug segment, with 25 deals totaling $64.8 billion. The targets include the companies focused on generic pharmaceuticals as well as the... Read More »Health Care M&A Weekly Deals, The Week Ending May 19, 2017
Health Care M&A Weekly Deals, The Week Ending May 19,... Read More »Behavioral Health Care Market Is Healthy, Not Frothy
The Behavioral Health Care M&A market has enjoyed six years of strong growth, following passage of the Affordable Care Act in 2010. The market peaked at 41 deals announced in 2016, with $3.4 billion in combined spending. Despite the uncertainty surrounding the ACA’s replacement, merger and acquisition activity is still strong in the early months of 2017. Tailwinds are stronger than headwinds. Destigmatization of addictions, mental health issues and other disorders has brought attention to the care needed by millions. There is still significant, unmet need in many sub-sectors, such as acute care psychiatric beds. De novo building is easing some of that need, and could lead to more... Read More »Financial Buyers Announce 59 Deals in Q1:17
Financial buyers, which include real estate investment trusts and private equity firms, are not the dominant players in the health care M&A market. Their participation depends on many factors, with valuations being an important determinant, (see chart below). Middle-market private equity firms, in particular, have had a hard time getting into and then winning auctions for health care entities in the past few years, as strategic buyers have outspent or even pre-empted auctions. In the first quarter, financial buyers accounted for 15% of the deal volume, with 59 deals, which is slightly lower than the previous four quarters. The first quarter featured eight deals that topped the $1.0... Read More »Pharma Deals Slid in Q1:17
Deal making in the pharmaceutical sector slid further in the first quarter, down 12% to 29 deals, compared with the previous quarter, and down 28% compared with the same quarter a year ago. This quarter’s deal volume accounts for 20% of the 145 deals announced in the previous 12 months. President Trump has continued to malign this sector in social media tweets and in public speeches for the high price of some drugs, so it’s not surprising to see M&A slacking off, for the time being. Also, drug makers’ attention is directed toward their aging product pipelines, and most of the deal activity is going to acquire the rights to promising mid- and late-phase drug candidates. Source:... Read More »Patheon Bought, Again
There has been a lot of interest in contract research organizations (CROs), contract manufacturing organizations (CMOs) and contract development and manufacturing organizations (CDMOs), especially in the M&A market. Half-way through May 2017, 19 of these deals have been announced. With 14 deals and $14 billion spent this year, CROs have taken the spotlight. But CDMO deals are picking up pace, accounting for 21% of the 19 deals and $7.3 billion spent this year. Most of that total derives from one deal. On May 15, 2017, Thermo Fisher Scientific, Inc. (NYSE: TMO) acquired Patheon N.V. (NYSE: PTHN), a CDMO focused on active pharmaceutical ingredients (APIs) and finished drug product... Read More »Health Care M&A Weekly Deals, The Week Ending May 12, 2017
Health Care M&A Weekly Deals, The Week Ending May 12,... Read More »Medical Device Deals Stagnated in Q1:17
Deal volume in the Medical Device sector stagnated in early 2017, dropping 4% to 22 transactions in the first quarter. Deal volume was also down 29%, compared with Q1:16. This quarter accounted for 21% of the 104 deals announced in the previous 12 months. The excise tax that was introduced through the Affordable Care Act in January 2013 was suspended temporarily in December 2015. Now, medical device makers are hoping the tax will be rescinded completely with whatever bill Republicans pass to replace the ACA. The permanent repeal would brighten the outlook for startups and venture capitalists, and could lead to more innovation (and M&A) in the future. Source: HealthCareMandA.com, April... Read More »Spending on Health Care Deals Popped in April
April deal volume disappointed, with 103 deals and a decrease of 29% compared with March 2017 (145 deals). On the spending side, April’s preliminary spending total increased 931% compared with the previous month’s $4.8 billion. Here’s the breakdown. April’s combined spending hit $49.9 billion, which was 15% higher than the total in April 2016. This month’s high was the result of a single large deal, the $24 billion spent by Becton, Dickinson and Company (NYSE: BDX) for C.R. Bard (NYSE: CBR), in the Medical Device sector. Also worth noting is the more than $9.0 billion spent by Hellman & Friedman to buy out the majority stake owned partner, The Carlyle Group (NYSE:... Read More »Schedule a demo
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