Healthcare & Life Sciences Industry Overview

Our Latest Insights | Healthcare IT: Five Segments Attracting Buyers

Software solutions designed to improve clinical and administrative processes have been widely adopted by healthcare services providers. Yet there’s still plenty of innovation happening around these technologies, with several specific sectors standing out as interesting investment opportunities

In this article, Harris Williams professionals Sam Hendler, Dan Linsalata, and Nick Owens share their insights on the current landscape of healthcare technology solutions and vendors, as well as the opportunities this market presents for strategic buyers and private equity investors.

 Read the article.

M&A Environment1

There have been a little over 340 M&A transactions in the healthcare & life sciences (HCLS) industry since the beginning of 2019, worth roughly $129.1 billion, compared to $241.7 billion for all of 2018. 90 of these deals were executed by private equity groups.

Notable transactions include the acquisition of IFM Tre, Inc. by Novartis AG, the acquisition of Paragon Bioservices, Inc. by Catalent, Inc., and the acquisition of Advanced Medical Personnel Services, Inc. by AMN Healthcare Services, Inc.

Public Company Performance1

Stock prices declined for many HCLS companies during the past three months. In fact, the Harris Williams HCLS Composite Index decreased 4.2%, while the S&P rose 9.9%. Notable sector increases include Information Services (increased 15.0%), Clinical Laboratories (increased 13.2%), durable medical equipment (increased 10.8%), dental products (increased 9.0%), and Long-Term Care (increased 8.1%).

Over the past 12 months industry-wide stock prices have experienced slight declines, with the HCLS Composite Index showing a mild decrease of 4.2%. At the category level, provider-based services stock prices grew by 14.4% on average over the past 12 months, followed by products and devices at 13.6% and payor, provider and pharmacy support services at 0.3%. Specific stock price growth leaders over the past year include long-term care (54.0%), home care, hospice and home infusion (43.5%), contract research organizations (20.5%), and life sciences tools (19.4%).

Industry News

According to recent articles from the Wall Street Journal and Modern Healthcare, the healthcare industry continues to experience increased consolidation in an effort by firms to reduce costs and improve outcomes. While the common rationale amongst healthcare executives at large hospital systems is that consolidation reduces costs though economies of scale and increased bargaining power, thus allowing for improved quality of care and increased patient satisfaction, some experts are skeptical of the outcomes. Berkley Research Group and Prism Healthcare Partners, two similar healthcare consulting firms, expect to benefit from scale and synergies in an increasingly competitive healthcare consulting environment with the announcement of BRG’s acquisition of Prism.

Recent allegations made against generic drug companies suggest multiple individuals and companies conspired to fix prices of more than 100 generic drugs. While generic drug manufacturer stocks declined in the wake of the announcement, all healthcare stocks may be at risk. Benefits from increased prices of drugs are not only experienced by the manufacturers, but also by the whole supply chain, including distributors, pharmacies and benefits managers. With incentives so aligned, inflation in healthcare spending comes to no surprise.

M&A Overview1

Announced Healthcare & Life Sciences M&A


Note: Transactions based on publicly available information

Healthcare & Life Sciences M&A Trends


Announced Private Equity M&A Activity


Debt Markets Overview

Key Credit Statistics2


Select Healthcare & Life Sciences Debt Offerings3

(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 Offerings4

(by proceeds)


M&A Transactions

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



What We’ve Been Reading

Hospital Systems | Health Systems Are Working to Live up to Their Name

Experts suggest that the trend in hospital consolidation does not necessarily create a more organized system of care. Hospitals across the country have been rapidly consolidating into larger, non-profit and for-profit companies consisting of a number of smaller clinics and care centers across multiple states. While executives argue that standardizing processes and outcomes across multiple care sites increases quality of care and produces better patient outcomes, experts are skeptical that these systems are using the best scientific information to spread best practices as was intended. Industry rationale for consolidation is that larger entities have greater ability to reduce costs through economies of scale which allows them to invest in improving quality of care. According to a Modern Healthcare Metrics database, 27% of the 4,660 acute-care hospitals are owned by 20 hospital companies, while 19% are owned by 10 hospital companies.

Read the article.

Markets | Generics Lawsuit is a Problem for All Health-Care Stocks

Generic drug companies are under fire for allegedly conspiring to fix prices of more than 100 generic drugs. An amended civil antitrust complaint filed by more than 40 state attorneys general claim that 15 individuals and 20 corporate defendants were involved in the matter. While pharma stocks such as Teva Pharmaceutical Industries and Mylan declined significantly after the announcement, healthcare investors may be able to look past the news considering total generic drug spending is a fraction of overall drug costs in context of total U.S. healthcare spending. However, all companies involved in the supply chain benefit when prices increase, further highlighting the bad incentives that characterize the U.S. healthcare system. Distributors, pharmacies and benefits managers are paid as a percentage of a drug’s list price while health insurers are incentivized by higher overall spending due to fixed profit margins introduced by the Affordable Care Act. Inflation in healthcare spending is no surprise considering the incentives involved.

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M&A | Berkley Research Group Buying Prism Healthcare Partners

Berkeley Research Group is buying Chicago-based consultancy Prism Healthcare Partners, further solidifying its competitive position in the world of healthcare consulting. Those leading the merger expect to benefit from scale and synergies between the two similar firms, a common theme seen in healthcare mergers. The combined entity, BRG/Prism, will have revenue of over $225 million and over 350 healthcare consultants with their core work being performance improvement through margin expansion and improved quality metrics. Along with the three main services offered by competitive firms including, reductions in labor and supply chain costs, and revenue cycle improvement, BRG/Prism will be in a position to provide value-based transformation and ensuring successful integration of mergers and acquisitions. Healthcare consulting, much like the trend seen throughout the healthcare industry, continues to experience increasing consolidation.

Read the article.

Public Comparables

Payor, Provider, & Pharmacy Support Services1




Products & Devices1



Provider-Based Services1



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


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