Healthcare & Life Sciences Industry Overview

M&A Environment1

There have been a little over 180 M&A transactions in the healthcare & life sciences (HCLS) industry since the beginning of 2019, worth roughly $106.9 billion, compared to $241.7 billion for all of 2018. Forty seven of these deals were executed by private equity groups.

Notable transactions include the acquisition of Spark Therapeutics by Roche Holding AG, the acquisition of Pernix Therapeutics Holdings by Highbridge Capital Management and JP Morgan Asset Management, and the acquisition of Immune Design Corp. by Merck & Co.

Public Company Performance1

Stock prices declined for many HCLS companies during the past three months. In fact, the Harris Williams HCLS Composite Index declined 7.5%, while the S&P rose 1.5%. Notable exceptions to this trend include behavioral health / management (increased 21.6%), acute-care hospitals (increased 11.5%), durable medical equipment (increased 9.6%), medical devices and products (increased 8.4%), and diagnostic imaging (increased 7.1%).

Over the past 12 months industry-wide stock prices have remained relatively flat, with the HCLS Composite Index showing a mild increase of 0.2%. At the category level, provider-based services stock prices grew by 19.1% on average over the past 12 months, followed by products and devices at 11.2% and payor, provider and pharmacy support services at 7.9%. Specific stock price growth leaders over the past year include home care, hospice and home infusion (64.8%), long-term care (62.0%), specialty managed care (37.5%), and contract research organizations (25.4%).

Industry News

President Trump announced his 2020 fiscal spending budget which included a $12.5 billion cut in HHS funding and a $1.5 trillion cut to Medicaid spending. The budget, which is expected to be contested by a Democratic House, also proposes legislation to repeal the Affordable Care Act. In an effort to increase transparency, the Senate Finance Committee has invited five major pharmacy benefit managers, including CVS, Cigna, and Humana, to testify before Congress regarding high prescription drug costs across the U.S. The Committee previously heard from pharmaceutical executives who blame the PBMs of withholding discounts instead of passing them along to patients.  Read the article.

In addition, a merger between two Blue Cross Blue Shield insurance group members, Cambia and Blue Cross Blue Shield of North Carolina, marks the first major merger among Blue insurers in recent years. The combined entities will generate $16 billion in revenue and cover 6 million people. Read the article.

M&A Overview1

Announced Healthcare & Life Sciences M&A


Healthcare & Life Sciences M&A Trends


Announced Private Equity M&A Activity


Debt Markets Overview

Key Credit Statistics3


Select Healthcare & Life Sciences Debt Offerings4

(by deal amount)


Public Markets Overview1

Key Trading Statistics


Public Company Sector Performance

(12-month % change in stock price)


Equity Markets Overview

Healthcare & Life Sciences Industry Stock Performance1


Top Equity Offerings2

(by proceeds)


M&A Transactions

Announced U.S. Healthcare & Life Sciences M&A1



What We’ve Been Reading

Policy | White House Proposes Deep Cuts to HHS and Medicaid in New Budget

The White House’s proposed budget would cut HHS funding by 12% in fiscal 2020 and slash Medicaid spending by $1.5 trillion from 2020 through 2029. The budget would also give states the flexibility to alter Medicaid benefits, extend current reductions to Medicaid’s disproportionate-share hospital payments, and call for an improvement in the 340B drug discount program. Similar to the 2019 budget, the 2020 budget, which is expected to largely be contested by a Democratic controlled House of Representatives, endorses legislation to repeal the Affordable Care Act. Opponents to the budget believe it would have a devastating impact on care for seniors, reduce resources to care for low-income Americans, and inhibit efforts to deter the eventual physician shortage.  

Read the article.

Pharmacy | Senate Panel Asks CVS and Four Other Pharmacy Middlemen to Testify About Drug Prices

The Senate Finance Committee has invited five major pharmacy benefit managers, including CVS, Cigna, and Humana, to testify before congress about high prescription drug cost across the U.S. Chairman Chuck Grassley, R-Iowa., and Ron Wyden, D-Ore., have been critical of PBMs as have pharma executives who claim the PBMS, which negotiate drug benefits with manufacturers for insurance plans, pocket the discounts instead of passing them along to the patient. Spending on prescription drugs increased to $333.4 billion in 2017 according to the latest data from the Centers for Medicare and Medicaid Services. The Senate Committee previously heard from pharmaceutical executives and are now hoping they will have an opportunity to hear from PBMs in regards their role in the health care supply chain.

Read the article.

M&A | Major Blue Health Insurers to Combine

Cambia Health Solutions and Blue Cross and Blue Shield of North Carolina, both members of the Blue Cross Blue Shield group of insurers, will merge in a combined structure that will retain the Cambia name. The two not-for-profits combined represent $16 billion in revenue and cover 6 million people. The deal will be structured in a way to give both entities flexibility and allow them to combine resources to bolster investments and speed progress in developing new health-data approaches and consumer tools, amongst other initiatives. Moves to combine Blue insurers have been rare in recent years, and can prove to be challenging for reasons including local political sensitivities and legal structures of not-for-profits. Collectively, the Blue Cross Blue Shield group of insurers cover more than 100 million Americans and are a unique and powerful force in the industry, but have largely sidestepped the industry consolidation that has created some of the larger players like UnitedHealth Group and Aetna.

Read the article.

Public Comparables

Payor, Provider, & Pharmacy Support Services1




Products & Devices1



Provider-Based Services1



1. FactSet
2. Company Filings
3. S&P
4. PNC Debt Capital Markets


The information and views contained in this report were prepared by Harris Williams LLC (“Harris Williams”). It is not a research report, as such term is defined by applicable law and regulations, and is provided for informational purposes only. It is not to be construed as an offer to buy or sell or a solicitation of an offer to buy or sell any securities or financial instruments or to participate in any particular trading strategy. The information contained herein is believed by Harris Williams to be reliable but Harris Williams makes no representation as to the accuracy or completeness of such information. Harris Williams and/or its affiliates may be market makers or specialists in, act as advisers or lenders to, have positions in and effect transactions in securities of companies mentioned herein and also may provide, may have provided, or may seek to provide investment banking services for those companies. In addition, Harris Williams and/or its affiliates or their respective officers, directors and employees may hold long or short positions in the securities, options thereon or other related financial products of companies discussed herein. Opinions, estimates and projections in this report constitute Harris Williams’ judgment and are subject to change without notice. The securities and financial instruments discussed in this report may not be suitable for all investors and investors must make their own investment decisions using their own independent advisors as they believe necessary and based upon their specific financial situations and investment objectives. Also, past performance is not necessarily indicative of future results. No part of this material may be copied or duplicated in any form or by any means, or redistributed, without Harris Williams’ prior written consent.

Harris Williams LLC is a registered broker-dealer and member of FINRA and SIPC. Harris Williams & Co. Ltd is a private limited company incorporated under English law with its registered office at 5th Floor, 6 St. Andrew Street, London EC4A 3AE, UK, registered with the Registrar of Companies for England and Wales (registration number 07078852). Harris Williams & Co. Ltd is authorized and regulated by the Financial Conduct Authority. Harris Williams & Co. Corporate Finance Advisors GmbH is registered in the commercial register of the local court of Frankfurt am Main, Germany, under HRB 107540. The registered address is Bockenheimer Landstrasse 33-35, 60325 Frankfurt am Main, Germany (email address: Geschäftsführer/Directors: Jeffery H. Perkins, Paul Poggi. (VAT No. awaited). Harris Williams is a trade name under which Harris Williams LLC, Harris Williams & Co. Ltd and Harris Williams & Co. Corporate Finance Advisors GmbH conduct business.