Healthcare & Life Sciences Industry Overview

M&A Environment

There have been approximately 250 M&A transactions in the healthcare & life sciences (HCLS) industry since the beginning of 2018, worth roughly $125 billion, compared to $239.8 billion for all of 2017. Eighty-seven of these deals were executed by private equity groups.

Notable transactions include the sale of GE Healthcare’s Value Based Care Division to Veritas Capital Fund Management LLC, the acquisition of the Center for Autism and Related Disorders, Inc. by Blackstone Corporate Private Equity, and the acquisition of Summit Behavioral Health LLC by The Halifax Group LLC and Delphi Behavioral Health Group LLC.

Public Company Performance

Stock prices fell for many HCLS companies during the past three months, mirroring the declining value of the S&P 500 over the same period.  In fact, the Harris Williams & Co. HCLS Composite Index shrank by 5.6%, slightly less than the 6.2% decline of the S&P. Exceptions to this trend include home care, hospice and home infusion (18.3%); surgicenters/rehabilitation (10.5%); diagnostic imaging (10.2%) and healthcare staffing (9.8%).

Over the past 12 months industry-wide growth looks much stronger, with the HCLS Composite Index achieving an 8% increase. At the category level, payor, provider and pharmacy support services stock prices grew by 19.1% over the past 12 months, followed by provider-based services at 10.5% and products and devices at 8.2%. Specific stock price growth leaders over the past year include diagnostic imaging (73.2%); home care, hospice and home infusion (43.6%); specialty pharmacy (39.7%) and HMO – Medical (32.8%).

Industry News

President Trump’s plan to cut drug prices was less aggressive than he originally promised, leading to relief and surging stock prices in the pharmaceutical industry. And the Centers for Medicare and Medicaid Services (CMS) released a new rural health strategy focused on improving care in these areas.

M&A Overview

M&A Overview1

Announced Healthcare & Life Sciences M&A

untitled_108.png

Healthcare & Life Sciences M&A Trends

untitled_56.png

Announced Private Equity M&A Activity

untitled_57.png

Debt Markets Overview

 Key Credit Statistics(3)

untitled_58.png

Select Healthcare & Life Sciences Debt Offerings(4)

untitled_59.png

Public Markets Overview1

Key Trading Statistics

untitled_60.png

Public Company Sector Performance

untitled_61.png

Equity Markets Overview

Healthcare & Life Sciences Industry Stock Performance(1)

untitled_62.png

Top Equity Offerings(2)

untitled_63.png

M&A Transactions

Announced U.S. Healthcare & Life Sciences M&A(1)

untitled_64.png

untitled_65.png

What We’ve Been Reading

Pharma| Trump’s Plan To Cut Drug Prices Leaves Industry Relieved

The Wall Street Journal 

Earlier this month, President Donald Trump unveiled dozens of initiatives aimed at curbing high drug prices – a raft of modest moves that left the pharmaceutical industry relieved and buoyed their stocks. Among other things, the blueprint includes changes to government rules that the administration contends have allowed drugmakers and pharmacy-benefit managers to game the system; moves to increase rebates and discounts for Medicare enrollees; and other incentives to get drugmakers to reduce their prices.

Read the article.

Government | CMS Unveils New Rural Health Strategy

Modern Healthcare

The CMS has made a commitment to keep rural communities in mind when developing regulations. The federal agency recently  released an eight page rural health strategy, which outlined its promises to reduce regulatory barriers to telehealth, improve outreach to providers in these communities to make sure they understand CMS programs, and identify practical solutions that will help better care in these areas.

Read the article.

Public Comparables

Payor, Provider, & Pharmacy Support Services(1)

untitled_66.png

untitled_67.png

untitled_68.png

Products & Devices(1)

untitled_69.png

untitled_70.png

Provider-Based Services(1)

untitled_71.png

untitled_72.png

1.FactSet

2.Company Filings

3.S&P

4.PNC Debt Capital Markets