• MedWorld Advisors

A look back at 2018

2018 was another good year for M&A in Healthcare. Find below a summary of the main trends and numbers published to date:

The Main Trends of 2018 :

  • Spurred on by tax relief, US companies used newly retained profits for acquisitions

  • The US/ China Trade War slowed M&A transactions between the two countries

  • This means that China is more than ever focused on “in-country” Innovations

  • It also meant more China M&A activity in Europe and the Middle East

  • Come Strategic Companies created venture funds to invest in startups

  • New partnerships between MedTech and “traditional” Tech were formed to keep an eye on Innovation – especially in Digital Health solutions

  • Strategy drives both acquisitions and divestitures for Portfolio Optimization

  • PE Firms continue to look for the “right” acquisitions more than ever (there is significant dry powder available) and expand outside of the US

  • Regulatory requirements in the EU are being implemented which is shifting the focus to the US market first as point of entry for commercialization

  • Digital Health continues to be a driving force for future change; implementation continues to be a challenge

  • Low Tech MedTech is not to be forgotten for success in everyday solutions

  • Diabetes and Oncology are top of conversations for acquisitions

  • Personalized Medicine is continuing to move forward

  • Unexpected M&A Transactions are still happening (CVS and Aetna for examples)

  • Amazon made it clear that it is now in the healthcare business by announcing that it was acquiring PillPack in June

  • In 2018, Amazon also formed a healthcare venture with Berkshire Hathaway and JPMorgan

  • Apple launches the first “healthcare” FDA approved watch furthering its move into Digital Health

2018 By the Numbers :

  • For the first time, venture-backed device M&A Exits total upfront payments eclipsed all other sectors, reaching $3.5B.

  • Boston Scientific bought seven venture-backed companies, propelling device sector upfront payments to a six-year high median of $190M.

  • Seven transactions announced in 2018 involved sellers with net revenue over $1 Billion in the US

  • At $190M, 2018 had the largest median upfront device payment since 2013 and a healthy 4.3x multiple on capital invested.

  • Device IPOs doubled over 2017, marking a five-year high for median pre-money valuation and dollars raised.

  • Device De Novo 510(k) pathway deals had very successful exits with median upfront and total deal values far exceeding those of traditional 510(k) and PMA deals.

  • 2018 Healthcare Investments surpass 2017 by 50%

  • 2018 was a banner year for biopharma IPO and M&A exits, hitting a record total deal value of $49B.

  • Biopharma IPOs reached a five-year high in pre-money valuations and dollars raised, and private M&A posted a 5x median upfront multiple and a median time to exit of just over three years.

  • A record 18 $1B+ venture-backed biopharma IPOs and M&A deals were completed in 2018.

  • Oncology remains the Number one investment and exit segment in BioPharma M&A, acquiring seven venture-backed companies in 2018.

Source: Silicon Valley Bank - Trends in HealthCare M&A and Exits 2019

Source: EY Report: Pulse on the Industry 2018,Silicon Valley Bank: Trends in HealthCare Investments and exits, 2019 Biospace: Mergers and Acquisitions, Becker: Becker’s Healthcare and CIO Report