Healthcare & Life Sciences Industry Overview

Consumer Healthcare: The Platform Opportunity in Vision, Dental, and Veterinary Care

Well before the COVID-19 crisis, many healthcare, consumer, and retail investors recognized the value-creation potential at the intersection of these two essential industries. Now that consumer healthcare has shown its resilience, investor interest has only intensified.

Here, senior bankers from the Harris Williams Consumer and Healthcare & Life Sciences Groups discuss opportunities in three specific subsectors in which they have collaborated.

Read the article.

M&A Environment1

There have been more than 170 M&A transactions in the healthcare and life sciences (HCLS) industry since the beginning of 2021, worth
roughly $35 billion, compared with approximately $222 billion for all of 2020.

Notable recent transactions include the acquisition of Viela Bio, Inc. (NasdaqGS: VIE) by Horizon Therapeutics USA, Inc, Preventice Solutions, Inc. by Boston Scientific Corporation (NYSE:BSX) and Cantel Medical Corp. (NYSE:CMD) by Steris plc (NYSE:STE).

Public Company Performance1

Stock prices increased for many healthcare and life sciences companies during the past three months. In fact, the Harris Williams HCLS Composite Index increased 28.0%, while the S&P increased 13.6%. Notable sector increases include assisted living (increased 148.6%), physician practice management (increased 113.9%) and disease management (increased 64.0%).

Industry-wide stock prices have experienced increases as a whole; the HCLS Composite Index showed an increase over the past 12 months of 15.6%. At the category level, products and devices grew by 22.7% on average over the past 12 months, followed by provider-based services increasing 22.1% and payor, provider and pharmacy support stock prices increasing 20.3%. Specific stock price growth leaders over the past year include acute-care hospitals (49.4%), contract pharma manufacturing (46.0%), and life sciences tools (45.6%).

Industry News

Fed up with a lack of federal action to lower prescription drug costs, state legislators around the country are pushing bills to penalize drugmakers for unjustified price hikes and to cap payment at much-lower Canadian levels. These bills, sponsored by both Republicans and Democrats in a half-dozen states, are a response to consumers’ intensified demand for action on drug prices as prospects for solutions from Congress remain highly uncertain. Eighty-seven percent of Americans favor federal action to lower drug prices, making it the public’s second-highest policy priority, according to a survey released by Politico and Harvard University last month. That concern is propelled by the toll of out-of-pocket costs on Medicare beneficiaries, many of whom pay thousands of dollars a year. Studies show many patients don’t take needed drugs because of the cost.2

A group of major hospital systems is launching a company to pull together and sell access to anonymized data on their millions of patients for uses including research and drug development. Among the 14 backers of Truveta Inc. are hospital owners including Providence, CommonSpirit Health, Advocate Aurora Health, Trinity Health and Tenet Healthcare Corp. The data held by Truveta won’t contain information identifying individual patients, the company said. Demand from technology companies, insurers, drugmakers and others trying to develop new tools and treatments has created a gold rush in health data. Hospitals hold some of the richest repositories—detailed information on patients’ histories, care and conditions—and for years other companies have sought access. The new company’s data will reflect around 13% of the clinical care provided in the U.S., a spokeswoman said, representing records for many millions of patients across 40 states. Truveta will be jointly owned by the hospital operators.3

Several states passed recent laws that would require commercial insurance plans to cover more telehealth services on a permanent basis. More states now require health plans to pay the same amount for telehealth as in-person visits. As emergency measures have greatly expanded patients’ access to virtual care during the pandemic, states are passing laws to more permanently bolster telehealth coverage in the long-term. Several states took a closer look at regulations in the past two years, and all but seven now have some requirement on the books for how commercial insurers should cover and pay for telehealth.4

1. FactSet 

2. KHN

3. WSJ

4. MedCity News

M&A Overview1

Announced Healthcare & Life Sciences M&A

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Healthcare & Life Sciences M&A Trends

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Announced Private Equity M&A Activity

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Debt Markets Overview

Key Credit Statistics2

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Select Healthcare & Life Sciences Debt Offerings3

(by deal amount)

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Public Markets Overview1

Key Trading Statistics

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Public Company Sector Performance

(12-month % change in stock price)

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Equity Markets Overview

Healthcare & Life Sciences Industry Stock Performance1

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Top Equity Offerings4

(by proceeds)

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M&A Transactions

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

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What We’ve Been Reading

Pharma | As Drug Prices Keep Rising, State Lawmakers Propose Tough New Bills to Curb Them1

Fed up with a lack of federal action to lower prescription drug costs, state legislators around the country are pushing bills to penalize drugmakers for unjustified price hikes and to cap payment at much-lower Canadian levels. These bills, sponsored by both Republicans and Democrats in a half-dozen states, are a response to consumers’ intensified demand for action on drug prices as prospects for solutions from Congress remain highly uncertain. Eighty-seven percent of Americans favor federal action to lower drug prices, making it the public’s second-highest policy priority, according to a survey released by Politico and Harvard University last month. That concern is propelled by the toll of out-of-pocket costs on Medicare beneficiaries, many of whom pay thousands of dollars a year. Studies show many patients don’t take needed drugs because of the cost. “States will keep a careful eye on Congress, but they can’t wait,” said Trish Riley, executive director of the National Academy for State Health Policy (NASHP), which has drafted two model bills on curbing prices that some state lawmakers are using. Several reports released last month heightened the pressure for action. The Rand Corp. said average list prices in the U.S. for prescription drugs in 2018 were 2.56 times higher than the prices in 32 other developed countries, while brand-name drug prices averaged 3.44 times higher. The Institute for Clinical and Economic Review found that drugmakers raised the list prices for seven widely used, expensive drugs in 2019 despite the lack of evidence of substantial clinical improvements. ICER, an independent drug research group, estimated that just those price increases cost U.S. consumers $1.2 billion a year more.

Read the article

Provider | Major Hospitals Form Company to Capitalize on Their Troves of Health Data2

A group of major hospital systems is launching a company to pull together and sell access to anonymized data on their millions of patients for uses including research and drug development. Among the 14 backers of Truveta Inc. are hospital owners including Providence, CommonSpirit Health, Advocate Aurora Health, Trinity Health and Tenet Healthcare Corp. The data held by Truveta won’t contain information identifying individual patients, the company said. Demand from technology companies, insurers, drugmakers and others trying to develop new tools and treatments has created a gold rush in health data. Hospitals hold some of the richest repositories—detailed information on patients’ histories, care and conditions—and for years other companies have sought access. The new company’s data will reflect around 13% of the clinical care provided in the U.S., a spokeswoman said, representing records for many millions of patients across 40 states. Truveta will be jointly owned by the hospital operators. Others will be invited to participate in the future, said Truveta’s chief executive, Terry Myerson, a former Microsoft Corp. executive. Mr. Myerson said the goal is to make the data available for “all ethical research,” and that the company is still developing its pricing plans. Potentially, fees will vary depending on the type of entity seeking access, he said. Pulling together in-depth data from so many hospital owners makes it even more powerful for research, and as a business opportunity, said Chas Roades, chief executive of Gist Healthcare, a consulting firm not involved in Truveta. “It’s a really valuable data asset,” he said. “These systems are moving to monetize that asset in a way that is going to be very beneficial for them.” Michael Slubowski, CEO of Trinity Health, said the new company would be able to play a role in real-time situations like the pandemic, which left hospitals scrambling to find the best treatments and approaches.  

Read the article

Tech | More States Require Telehealth Coverage Going into 20213

Several states passed recent laws that would require commercial insurance plans to cover more telehealth services on a permanent basis. More states now require health plans to pay the same amount for telehealth as in-person visits. As emergency measures have greatly expanded patients’ access to virtual care during the pandemic, states are passing laws to more permanently bolster telehealth coverage in the long-term. Several states took a closer look at regulations in the past two years, and all but seven now have some requirement on the books for how commercial insurers should cover and pay for telehealth. For example, West Virginia passed a bill last March mandating insurers to cover the same services over telehealth that they would cover in-person, starting in July. Before that, the state had no such requirements. Mercy, Anthem ink agreement to enhance care, drive down costs In Arizona, a new law mandates commercial insurers to cover more forms of care via telehealth, such as remote patient monitoring and asynchronous visits. Payers must also cover telemedicine visits from all specialties, according to legislation that was signed in 2019 and went into effect this year. In a new report, Foley and Lardner LLP detailed changes to telehealth commercial insurance laws for 2021. “In the time since our 2019 report, the legal landscape for telehealth reimbursement has significantly improved,” the authors of the report wrote. “Yet, the quality and efficacy of these laws varies significantly from state to state.”

Read the article

1. KHN

2. WSJ

3. MedCity News

Public Comparables

Payor, Provider, & Pharmacy Support Services1

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Products & Devices1

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Provider-Based Services1

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1. FactSet

2. S&P

3. PNC Debt Capital Markets

4. Company Filings