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Hospital Deals Rebound in May 2017

by | May 26, 2017 5:24 pm | Hospitals, Private Equity

Hospital merger and acquisition activity was fairly quiet in the first four months of the year, totaling 24 deals that made to a definitive agreement or beyond. Then came May, with a combined total of 13 transactions announced in the first four weeks (through May 26). Deal volume in the hospital sector through May 26 now totals 37 transactions, targeting 79 hospitals with 13,854 beds. The nearly $2.3 billion combined spending includes the $1.4 billion just announced by Medical Properties Trust (NYSE: MPW), which acquired the real estate assets of 10 acute care hospitals and one behavioral health facility (approximately 2,400 beds) belonging to IASIS Healthcare, a TPG portfolio company.... Read More »
Follow the Funding, May 2017

Follow the Funding, May 2017

by | May 26, 2017 2:46 pm | Private Equity

Introducing a new monthly feature focused on various tranches and rounds of funding for healthcare ventures, startups and funds. Links indicate target companies and lead investors. TargetInvestorsAmountDate Catalia HealthKhosla Ventures$2.5 million seed extension roundMay 1, 2017 ReThink MedicalEmergent Medical Partners, Norwich Ventures and Launch Capital$3 million Series AMay 1, 2017 Teewinot Life Sciences CorporationTuatara Capital$12.3 million Series BMay 1, 2017 TetraGeneticsJDRF T1 FundNot disclosedMay 2, 2017 Lantern PharmaBios Partners, GPG Ventures and others$3.7 million Series AMay 2, 2017 ExoCoBio Inc. SBI InvestmentSBI Investment, Atinum Investment, ID Ventures and... Read More »

Generic Drug Deals Are Getting Rarer

by | May 24, 2017 8:33 pm | Pharmaceuticals

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 »

Behavioral Health Care Market Is Healthy, Not Frothy

by | May 17, 2017 6:08 pm | Behavioral Health Care, Private Equity

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

by | May 17, 2017 1:46 pm | Behavioral Health Care, eHealth, Home Health & Hospice, Hospitals, Private Equity

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

by | May 15, 2017 8:55 pm | Pharmaceuticals

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

by | May 15, 2017 8:28 pm | CRO, Laboratories, MRI & Dialysis, Other Services, Private Equity

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 »