Gary W. Herschman and Anjana D. Patel, Members of the Firm in the Health Care & Life Sciences practice, in the firm’s Newark office, co-authored an article in Bloomberg Health Law & Business News, titled “Health-Care M&A Deals in Q3 Impacted by Covid-19; Election Could Shape Q4.” The piece was also co-authored by Hector M. Torres, Managing Director at FocalPoint LLC, and Larry Kocot, Principal at KPMG LLP, and Carole Streicher, Partner at KPMG LLP. Zachary Taylor, Associate in the Health Care & Life Sciences practice, also contributed to the article.
Following is an excerpt:
The volume of announced and closed merger and acquisition deals in the health-care sector in September (201) accelerated to end Q3, up from 166 in August and just shy of the year-to-date high in January (213). The surge over the past month suggests that investment activity may be on the upswing following a few months of slowed activity resulting from the pandemic.
In total, announced/closed deals in Q3 totaled 497, up from 354 in Q2 and a record-setting deal volume in Q1 (476).
Life Science & Pharmaceuticals
The life science and pharmaceutical (49) sectors had the highest volume of announced or closed deals in September and the highest monthly volume year-to-date. Despite recent setbacks in clinical trials for Covid-19 vaccines and therapeutics, investor interest is expected to continue to be strong for the remainder of the year as we generate more evidence on efficacy and plan for distribution of potential vaccine candidates, potentially before the end of the year. Q3 deals in the sector (103) are up approximately 22% from Q1 (84) and Q2 (84).
Medical Devices & Supplies
Medical devices and services deals, announced and closed, were strong for the second month in a row (39) to make it the highest month for the sector year-to-date. The sector has 165 announced or closed deals year-to-date, on pace to have the second highest deal volume for the year, behind life science and pharmaceuticals. Q3 (85) strongly outpaced Q1 and Q2 deals, which totaled 80.
Recent data suggests that health-care demand may be recovering, creating increasing investor interest in innovative care delivery in new or alternative settings, which must rely heavily on services in this sector.