2024全球医疗健康行业私募股权报告.pdf

Global Healthcare Private Equity Report 2024 1Global Healthcare Private Equity Report 2024ContentsHealthcare Private Equity Market 2023:Year in Review and Outlook .2Generative AI Will Transform Healthcare .12Healthcare IT Hits a Speed Bump.17Life Sciences:Navigating Shifts in the Innovation,Regulatory,and Operational Terrains .24Indias Healthcare Industry Comes of Age .312By Nirad Jain,Kara Murphy,Dmitry Podpolny,Franz-Robert Klingan,Vikram Kapur,and Alex BoultonMacroeconomic challenges have exacted a toll on healthcare buyouts,but green shoots in deal activity reflect the industrys strong fundamentals.Healthcare Private Equity Market 2023:Year in Review and OutlookAt a Glance Investors continue trying to unlock liquidity and raise capital for healthcare deals,in a challenging fund-raising environment.Biopharma deals represent the biggest share of healthcare buyouts,while new modalities and innovative therapies such as GLP-1s transform the investment landscape.As investors look to diversify their Asia-Pacific buyout activity,India is viewed as a place to deploy healthcare capital at scale.Private equity investors continue to pursue healthcare IT deals,with rising competition from tech specialists and corporate investors.The healthcare sector continued to be a hub of private equity(PE)deal activity in 2023,relative to all PE deals across the world,despite higher global interest rates,inflationary pressures,and broader geopolitical uncertainty(see Figure 1).3Global Healthcare Private Equity Report 2024Figure 1:Healthcare held its own in a tepid overall deal marketNotes:Excludes spin-offs,add-ons,loan-to-own transactions,special purpose acquisitions,and acquisitions of bankrupt assets;based on announcement date;includes announced deals that are completed or pending,with data subject to change;deal value does not account for deals with undisclosed values;values updated based on Dealogic 2020 sponsor classifications;values include net debt where relevant;2023E annualized assuming the average ratio of JanuaryNovember to December from 2019 to 2022,based on data through November 30,2023Sources:Dealogic;AVCJ;Bain analysisGlobal buyout deal value,$billions(excluding add-on deals)2010$22211230122191329514300153721633917430184841948020501211,0122265423E4449%1521201515891089111315Healthcareas percentageof totaldeal countHealthcare buyoutsOther buyouts Dec 2023 forecastAcross all regions,a number of common themes emerged.To start,biopharma deals along with transactions involving related services,such as contract research organizations(CROs)and contract development and manufacturing organizations(CDMOs),made up the largest share of global deal value at 48%(see Figure 2).Meanwhile,in the healthcare information technology(HCIT)space,deals for electronic medical and health record providers underscored the importance of next-generation IT in healthcare.We also tracked the continued rise of glucagon-like peptide-1 agonists(GLP-1s),which will have implications across the sector,including supporting continued growth in the sterile fill finish market,where the leader,Baxter BioPharma Solutions(now Simtra),was acquired by Warburg Pincus and Advent International.4Global Healthcare Private Equity Report 2024Figure 2:Biopharma composed the largest share of healthcare dealsNotes:Excludes spin-offs,add-ons,loan-to-own transactions,special purpose acquisitions,and acquisitions of bankrupt assets;based on announcement date;includes announced deals that are completed or pending,with data subject to change;deal value does not account for deals with undisclosed values;values updated based on Dealogic 2020 sponsor classifications;values include net debt where relevant;2023E annualized assuming the average ratio of JanuaryNovember to December from 2019 to 2022,based on data through November 30,2023;2010 value includes$1 billion of uncategorized dealsSources:Dealogic;AVCJ;Bain analysisPercentage of global healthcare buyout deal value(excluding add-on deals)020406080100%2001 02030405060708091011121314151617181920212223EProvider and related servicesBiopharma and related servicesMedtech and related servicesPayer and related servicesLife sciences tools and related servicesThe year saw six deals in excess of$2 billionthe largest being the taking private of Syneos Health by Elliott Investment Management,Patient Square Capital,and Veritas Capitalcompared with 13 in 2022 and 14 in 2021,though with some large deals in flux.There have also been around 375 deals below the$2 billion mark,a testament to high levels of activity at the middle and small levels.Within North America,announced deal values came in around$29 billion,with biopharma accounting for 25%of deal activity and 54%of deal value(see Figure 3).Activity in provider businesses(historically a large share of US deals)slowed as those businesses experienced inflationary and labor market pressures.Nonetheless,a number of provider deals closed across specialties such as oncology,orthopedics,and cardiology with the opportunity to drive ancillary expansions relatively insulated from broader healthcare and macroeconomic pressures.Case in point:TPG and Cencoras(formerly known as AmerisourceBergen)acquisition of OneOncology from General Atlantic for$2.1 billion.In Europe,announced deal value fell approximately 44%year over year from$25 billion in 2022 to$14 billion in 2023.Excluding EQT/Luxinvas acquisition of Dechra Pharmaceuticals,the announced deal value would have declined by about 70%.Constrained credit markets and continued disruption from labor and cost inflation dampened activity in the retail health and provider sectors.Europe also saw several announced processes that did not result in a transaction,as buyers and sellers failed to align on valuations.5Global Healthcare Private Equity Report 2024Figure 3:North America still hosts the highest value of healthcare dealsNotes:Excludes spin-offs,loan-to-own transactions,special purpose acquisitions,and acquisitions of bankrupt assets;based on announcement date;includes announced deals that are completed or pending,with data subject to change;deal value does not account for deals with undisclosed values;values updated basedon Dealogic 2020 sponsor classifications;values include net debt where relevant;2023E annualized assuming the average ratio of JanuaryNovember to December from 2019 to 2022,based on data through November 30,2023Sources:Dealogic;AVCJ;Bain analysisHealthcare buyout deal value,201822,$billions(excluding add-on deals)Healthcare buyout deal value,2023E,$billions(excluding add-on deals)North AmericaEuropeAsia-PacificRest of worldNorth AmericaEuropeAsia-PacificRest of worldProvider and related servicesBiopharma and related servicesMedtech and related servicesPayer and related servicesLife sciences tools and related services$263103791$2914142Diversification of investments in the Asia-Pacific regionIn the Asia-Pacific region,deal activity was slightly lower than 201822 levels,with announced deal value at around$14 billion(see Figure 4).China remains very relevant for investment,while India represented the largest share of announced deal value.That said,investors seeking to manage geopolitical risk began to broaden their horizons to other Asia-Pacific countries.India,in particular,has seen a long-term rise in biopharma-related activity(for example,in generics and active pharmaceutical ingredient manufacturing),albeit with a slowdown year over year,while also seeing growth in domestic demand driven by an expanding middle class and government insurance programs(see Figure 5).These macroeconomic dynamics,coupled with a number of successful exits from early investors in Indiasuch as TPGs sale of a controlling stake in Care Hospitals to Blackstonehave propelled private equity sponsors to regard India as a place to deploy healthcare capital at scale.6Global Healthcare Private Equity Report 2024Figure 4:Deal activity has proved to be more resilient in Asia-Pacific relative to other regionsNotes:Excludes spin-offs,add-ons,loan-to-own transactions,special purpose acquisitions,and acquisitions of bankrupt assets;based on announcement date;includes announced deals that are completed or pending,with data subject to change;deal value does not account for deals with undisclosed values;values updated based on Dealogic 2020 sponsor classifications;values include net debt where relevant;2023E annualized assuming the average ratio of JanuaryNovember to December from 2019 to 2022,based on data through November 30,2023Sources:Dealogic;AVCJ;Bain analysisGlobal healthcare buyout disclosed deal value,$billions(excluding add-on deals)North AmericaEuropeAsia-PacificRest of worldDec 2023 forecast2010$15113012211316143015231636174318631979206621151228723E60Figure 5:India has taken an increasingly important role in Asia-Pacifics healthcare marketNotes:Excludes spin-offs,loan-to-own transactions,special purpose acquisitions,and acquisitions of bankrupt assets;based on announcement date;includes announced deals that are completed or pending,with data subject to change;deal value does not account for deals with undisclosed values;values updated basedon Dealogic 2020 sponsor classifications;values include net debt where relevant;2023E annualized assuming the average ratio of JanuaryNovember to Decemberfrom 2019 to 2022,based on data through November 30,2023Sources:Dealogic;AVCJ;Bain analysisHealthcare buyout deal value,$billions(excluding add-on deals)Healthcare buyout deal count(excluding add-on deals)IndiaChinaRest of Asia020406080100%2015$51631771816191120172118221723E14020406080100%20152316521761188819682015621179229223E128Responses to liquidity challenges:value creation and secondary transactionsSponsors faced a challenging fund-raising environment in 2023,at a time when overall exit volume was decreasing and competition for fresh capital was increasing.In line with the overall PE markets,sponsor exits in healthcare declined in 2023,setting up PE funds for a conflict in 2024 between prolonging holding periods and the desire among limited partners for liquidity.Fund sponsors have been strategizing about how to offset the impact on the internal rate of return from longer holding periods via two mechanisms:first,by investing in incremental value-creation opportunities,with an emphasis on commercial excellence,pricing,and margin expansion,and second,by exploring alternative avenues for liquidity,both for the funds and their limited partners.The latter approach has triggered a rise in the exploration of secondary transactions(partial/early exits)including continuation vehicles.In 2023,many buyout funds initiated secondary-dedicated funds;notably,Blackstone raised$24.9 billion,$2.7 billion of which is earmarked to its inaugural GP-led continuation fund strategy.In addition,Ardian,Lexington Partners,and Goldman Sachs collectively fund-raised more than$50 billion for their secondary vehicles.Several factors make these instruments attractive:secondaries provide GPs an early,often partial exit opportunity,allowing them to secure liquidity to finance growth ambitions or return capital to investors,and boosting a funds distributions to paid-in capital.Continuation funds,another form of secondary transaction,buy time until the market appropriately prices a holdings potential.Moreover,bid-ask spreads for secondary market continuation funds,where the seller is often a partial buyer,tend to be narrower than the bid-ask spreads in primary markets.PE firms have also sought to navigate the current environment by joining with other firms to tackle larger targets,in addition to seeking partnerships with and capital from sovereign wealth funds(as in the acquisition of Dechra Pharmaceuticals).PE firms are not immune to broader fund-raising challenges:Preqin estimates that in 2023 there has been$3.3 trillion of global private capital targeted by funds,but only$1 trillion raised.Large funds are capturing a greater share of allocations,benefiting from strong fund strategies,commercial motions,differentiated pitches,and sector-specialized investment teams.7Global Healthcare Private Equity Report 20248Global Healthcare Private Equity Report 2024Corporate M&A:Strategics access to lower-cost capital enabled sustained biopharma deal activityHealthcare corporate M&A value was up from 2022,bucking headwinds on biopharma from the Inflation Reduction Act(IRA)in the US.Pfizer announced its acquisition of Seagen for just under$45 billion in the largest acquisition in biopharma since Abbvies acquisition of Allergan for$63 billion in 2019.Strategics,especially large-cap biopharmas,have retained access to lower-cost capital,which has fueled higher levels of activity compared with buyout funds.This level of activity occurred despite intensified scrutiny from the Federal Trade Commission(FTC),as seen in suits over Amgens acquisition of Horizon,a deal announced in 2022 and closed recently.In reaction to heightened FTC scrutiny,strategics appear to be prioritizing more modest acquisitions that advance specific strategic goals and are less likely to arouse antitrust scrutiny for example,Mercks acquisition of Prometheus Biosciences(see Figure 6).That said,corporate healthcare M&A has seen 19 deals in excess of$2 billion in the first three quarters of 2023.Figure 6:The value of deals by strategic buyers edged up in 2023,as strategics access to financing allowed them to do deals large enough to move the needleNotes:Q4 2023 deal value is a straight-line extrapolation using Q1Q3 data;strategic M&A includes corporate M&A deals(which include PE exits)and add-ons,excludes special purpose acquisition companies/blank check companies defined by deal technique(SPAC acquisition),excludes venture capital/corporate venturecapital defined by deal technique(funding round)or acquirer business description(venture capital),excludes other strategic PE buyers deals classified as strategicbut having the acquirers specific industry group as defined by Dealogic:finance-acquisitions/restructurings,finance-capital pool companies,or finance-governmentsponsored entities/credit agenciesSource:DealogicGlobal healthcare and life sciences strategic deal value,$billionsTotal activityQ4 2023 forecast2010$20311198121481327514417154461625317315184181954320305213932227223E2749Global Healthcare Private Equity Report 2024Macroeconomic headwinds buffet healthcareHealthcare PE has outperformed other sectors across multiple market cycles and recessionary periods;however,the reasons for this resilience have varied from cycle to cycle.Over the past decade,deal returns were driven by revenue growth and multiple expansionthe latter a byproduct of low interest rates and abundant credit.By contrast,the current inflationary climate has taken a heavy toll on labor-intensive businesses,as labor shortages challenge many healthcare sectors.Still,we see positive momentum generated from innovation triggered by the pandemic,which has led to a range of new healthcare deliver