Healthcare Startups May Turn to Traditional Banks
Healthcare startups could start looking to traditional banks for funding after the collapse of Silicon Valley Bank (SVB) and Signature Bank. The fall of SVB created a gap in the life sciences startup sector, locking out funds for some companies temporarily and cutting off a source of short-term cash for healthcare startups. This comes as healthcare funding has declined and IPOs have stalled, prompting startups to conserve cash and seek ways to extend their runway.1
Pfizer to Acquire Seagen
Pfizer announced their $43 Billion planned acquisition of Seagen, Inc. to expand their reach into cancer treatment. The purchase will combine Seagen's technology with Pfizer's scale and capabilities to strengthen Pfizer's oncology division, which already includes prostate and breast cancer treatments, and bolster Pfizer's patent protection from cheaper competition in the coming years. The boards of both companies unanimously approved the deal, which is expected to close in late 2023 or early 2024.2
Private Equity Add-ons Expected to Drive M&A Activity in the Healthcare Industry
Focused on driving cost-efficiency in the healthcare system, private equity firms have increasingly focused investments in lower-cost, more convenient, and higher-quality care in outpatient service settings. While the trend is anticipated to continue in 2023, private equity investors are expected to focus on expanding existing healthcare platforms, with smaller add-ons to existing practices, over the next year, according to a report by Grant Thornton. Larger healthcare deals might stall until interest rates and valuation expectations decline.3
CVS Completes Acquisition of Signify
CVS completed its acquisition of Signify for $8 billion, expanding its presence in the home healthcare sector and value-based care strategy. The move adds 10,000 clinicians to CVS's network, providing quality care and engagement for Medicare Advantage clients. Signify's technology helps coordinate in-home care for providers, plans, and employers. The acquisition underwent regulatory scrutiny, including a second request from the Department of Justice. Signify will continue operating as a payer-agnostic business under CVS.4
Largest Transactions Closed
- City Practice Group of New York, LLC
- Village Practice Management Company, LLC
- Signify Health, Inc.
- CVS Pharmacy, Inc.
- LHC Group, Inc.
- OptumHealth, Inc.
- 1Life Healthcare, Inc.
- Amazon.com, Inc.
- Applied, Food and Enterprise Services Businesses of PerkinElmer, Inc.
- New Mountain Capital, L.L.C.
- Immucor, Inc.
- Werfen, S.A.
- CinCor Pharma, Inc.
- AstraZeneca Finance and Holdings Inc.
- Meridian Bioscience, Inc.
- SD Biosensor, Inc; SJL Partners
- Imago BioSciences, Inc.
- Merck Sharp & Dohme Corp.
- Albireo Pharma, Inc.
- Ipsen Biopharmaceuticals, Inc.
Other Financial Buyer Transactions Closed
- Innovia Medical LLC
- Inverness Graham
- InterMed Group, Inc.
- Health Enterprise Partners; Cressey & Company LP
- Alcami Corporation, Inc.
- The Vistria Group, LLC; GHO Capital Partners LLP
Other Strategic Buyer Transactions Closed
- Concert Pharmaceuticals, Inc.
- Sun Pharmaceutical Industries Limited
- AVEO Pharmaceuticals, Inc.
- LG Chem, Ltd.
- Oyster Point Pharma, Inc.
- Viatris Inc.
- SeaSpine Holdings Corporation
- Orthofix Medical Inc.
- Neogene Therapeutics, Inc.
- AstraZeneca PLC
This report represents transaction activity as mergers & acquisitions, consolidations, restructurings and spin-offs. Targets are defined as U.S. Based companies with either foreign or U.S. based buyers. Transaction information provided is based on closed dates only.
EBIT - Earnings Before Interest and Taxes