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David Jasmund

E: djasmund@pcecompanies.com

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Industry Trends

Software Overload Fuels Surge in Digital Health M&A

The digital health industry is grappling with an abundance of specialized solutions, overwhelming healthcare buyers seeking comprehensive offerings. This trend is likely to drive increased merger and acquisition (M&A) activity in the sector as funding has cooled off since the pandemic peak. Many startups, particularly point solutions, may consider M&A deals to secure their future. Offering complete platform solutions becomes essential as buyers prefer streamlined relationships and fewer vendors to manage.1

NextGen Healthcare Goes Private in $1.8 Billion Deal

NextGen Healthcare, a major electronic health record vendor, will be acquired for $1.8 billion, transitioning to private ownership. This move aims to enhance NextGen's cloud-based EHR development and practice management solutions. The acquisition signifies a strategic shift for NextGen after operating for more than four decades as a publicly traded health IT company. The acquisition reflects the ongoing consolidation trend in the healthcare IT industry as established players seek to strengthen their capabilities and market presence.2

Weight-Loss Market Soars: Breakthroughs and Personalized Solutions Ahead

The sudden popularity of weight-loss drugs like Ozempic and Wegovy has sparked a multibillion-dollar market in the healthcare industry. As new therapies gain momentum, analysts predict the market could reach $54 billion by 2030, up from $2.4 billion in 2022,. Companies are developing diagnostic tests to match patients with the most suitable weight-loss drugs. These innovations can potentially transform how healthcare providers address weight management, offering personalized solutions based on genetics and biomarkers.3

Retail Pharmacies Redefine Primary Care

Retail pharmacies are transitioning into primary care providers, with a growing belief that most primary care services will soon be offered at these locations. Data from Definitive Healthcare reveals a significant increase in retail clinic claims (200% growth) and urgent care claims (70% growth) from 2017 to 2022. This shift opens opportunities for pharmacies, especially in underserved rural areas, to broaden their revenue streams and provides a pathway to enhance healthcare access.4

Largest Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Reata Pharmaceuticals, Inc.
  • Biogen Inc.
  • $7,698.53
  • Syneos Health, Inc.
  • Veritas Capital Fund Management, L.L.C; Elliott Investment Management L.P.; Patient Square Capital, LP
  • $7,493.41
  • IVERIC bio, Inc.
  • Astellas US Holding, Inc.
  • $6,024.03
  • Diversey Holdings, Ltd.
  • Solenis LLC
  • $4,721.15
  • NuVasive, Inc.Glous Medical, Inc.
  • $3,840.84
  • Chinook Therapeutics, Inc.
  • Novartis AG
  • $3,498.91
  • DICE Therapeutics, Inc.
  • Eli Lilly and Company
  • $2,444.71
  • Versanis Bio, Inc.
  • Eli Lilly and Company
  • $1,925.00
  • Spectrum Plastics Group, Inc.
  • DuPont de Nemours, Inc.
  • $1,750.00
  • worldwide commercial rights for Zyprexa
  • CHEPLAPHARM Arzneimittel GmbH
  • $1,405.00

Other Financial Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Nextech Systems, LLC
  • TPG Capital, L.P.
  • $1,400.00
  • Paratek Pharmaceuticals, Inc.
  • Novo Holdings A/S; Gurnet Point Capital Limited
  • $444.25
  • Greenlight Biosciences Holdings Pbc
  • Fall Line Capital, LLC
  • $119.49

Other Strategic Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Kerecis LLC
  • Coloplast A/S
  • $1,300.00
  • Assets of early-stage rare disease gene therapy portfolio of Pfizer Inc.
  • Alexion Pharmaceuticals, Inc.
  • $1,000.00
  • DTx Pharma, Inc.
  • Novartis AG
  • $1,000.00
  • CorEvitas, LLC
  • Thermo Fisher Scientific Inc.
  • $912.50
  • Surgical Instrumentation platform of Becton, Dickinson and Company
  • STERIS Corporation
  • $540.00
  • Bile Acid Product Portfolio
  • Mirum Pharmaceuticals, Inc.
  • $445.00

 

Source S&P Capital IQ as of 10/11/2023 and PCE Proprietary Data

PCE Transactions

Contacts

David Jasmund

Orlando Office

407-621-2111 |

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Jon Gogolak

Orlando Office

407-621-2136 |

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Data Assumptions

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.

Glossary

EBIT - Earnings Before Interest and Taxes
EBITDA - Earnings Before Interest, Taxes, Depreciation, Amortization
LTM - Last Twelve Months
TEV - Total Enterprise Value

Sources:

  1. 1. Olsen, E. “Software overload could boost digital health M&A.” Healthcare Dive, 29 August, 2023.
  2. 2. Fox, A. “NextGen to be acquired by Thoma Bravo for $1.8B.” Healthcare IT News, 07 September, 2023.
  3. 3. Hopkins, J. “Drugs Like Ozempic Created a Gold Rush. These Drugmakers Want In.” The Wall Street Journal, 16 July, 2023.
  4. 4. Sullivan, C. “What Payers Need to Know As Retail Pharmacies Move Into Primary Care.” Managed Healthcare Executive, 06 September, 2023.
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