Though it’s not even halfway through 2018, the healthcare space has already seen numerous big-name deals. For instance, Allscripts acquired Practice Fusion and Roche scooped up Flatiron Health. In addition to the M&A action, investment dollars continue to flow in on a regular basis. Just earlier this week, Doctor on Demand secured a $74 million Series C round.
What will the rest of this year hold?
On day two of MedCity INVEST (May 1-2) in Chicago, a panel of experts will speak to the healthcare trends they’re seeing in the M&A and VC investing spaces. Prior to the conference, two of the panelists took time to voice their thoughts.
In the biotech M&A space, Q1 saw a total of 17 deals with a total dollar value of $38.2 billion, Greg Vlahos, a partner at PwC, said in a recent phone interview. About 86 percent of that total amount came from four of the 17 deals.
“The one overriding question is the biotech valuations,” Vlahos said. “We saw [2017] deal activity down because biotech valuations were high. And the question is, are they going to rightsize?”
As far as medical devices, there were 14 deals that added up to $3.5 billion, he added. Throughout 2017, there were 83 device deals with a total dollar amount of $58 billion.
Attend MedCity INVEST to hear from healthcare innovators like Greg Vlahos and Steven Collens. Use promo code MCN50 to save $50. Register now.
Shifting to the investment side, there was a total of $5.3 billion raised in healthcare in Q1, Vlahos noted. “There is a lot of money out there, but $5.3 billion is a big number for this industry,” he said.
Diving deeper, he said $740 million came in for medtech funding. And it was a record quarter for biotech, with $4.1 billion raised.
Steven Collens, CEO of Matter, noticed hefty investments going into health IT startups, too. Though there’s still lots of interest in the sector, the money seems to be going to later stage companies.
“It feels like it’s also getting harder for earlier stage companies to raise money,” he said in a phone interview. “A lot of the dollars are going into bigger rounds with bigger checks.”
Still, the funding continues to flow — sometimes surprisingly. “[I]f you look at the amount of capital that’s gone into health IT in particular, it’s a huge influx of capital, especially relative to the amount of value that’s been created so far,” Collens said.
It’s particularly challenging to raise money in other spaces like medical devices, Collens noted. However, a solid amount of money from China continues to go into device companies.
Photo: Nicol??s Mero??o, Getty Images
