Interesting News in Healthcare Q1 2018

 

Healthcare Newsletter
Q1 2018

Deals, Investments                                                                                                                                    

As Q1 2018 began, businesses were studying the impact of the overhaul of the US tax system, enacted into law in late Q4 2017.  Executives wanted to see how the healthcare sector would be affected. The new tax laws could provide large U.S. drug makers with new-found cash that they may decide to deploy for acquisitions, further investment in drug discovery, and marketing.  As the quarter rolled out, deals were announced in many areas of healthcare services either by pharmaceutical, their subsidiaries, digital health, marketing services, and software service companies. Current M&A activity suggests that “big pharma” is willing to pay above average multiples for companies that offer innovative drug discoveries, to ensure they remain competitive in a highly dynamic healthcare market.  And those purchases could have a ripple effect throughout the industry. Q1 2018 M&A activity also signals a continuing consolidation and price decline in some aspects of the EHR field but probably a continuing increase in value for speciality EHRs. Other areas of interest suggested by the quarter: continuing interest in improving consumer health through digital like telehealth and patient point of care. Details below.


Pharma deals kicked off Q1 in big way
The new year’s healthcare deals began to snowball as Sanofi and Celgene Corp. scooped up assets that promise to offset pricing pressure for some of their top-selling drugs. The two drugmakers announced deals worth about $20 billion combined. French giant Sanofi agreed to buy U.S. biotech firm Bioverativ Inc. for $11.6 billion to gain treatments for hemophilia that still command high prices. And Celgene spent $9 billion on Juno Therapeutics Inc., getting into a breakthrough field of cancer therapies that cost more than half a million dollars. The announcement in January sent the deals volume in U.S. biotechnology to its highest level since the third quarter of 2010, according to data compiled by Bloomberg.

CompanyTEV ($mm)Revenue ($mm)EBITDA (mm)TEV/RevTEV/EBITDA
Bioverative11,6001,1694759.4x23.2x

LA Times

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