written by Ken Dropiewski, McDermott & Bull Executive Search
Who and Why?
Looking back at M&A activity this year, I took notice of a few that stood out, irrespective of their size. One could argue that they saw some of these coming, and others were surprising – regardless it makes for interesting discussion heading into 2020. Before I get to the list, here are a few points worth mentioning:
- Private Equity deals in medical device are down significantly this year. At the close of the 3rd quarter of 2019, private equity deals were worth $2.2B, over a 75% decrease. (1) Last year, the purchase of the LifeScan diabetes business from J&J from Platinum Equity alone was $2.1B.
- Digital healthcare and preventative medicine continue to drive growth, paving the way consistent healthcare and wellness regardless of region.
- International money is flowing into the U.S. to pick up domestic targets. In the 3rd quarter alone, 5 of the 10 largest deals were U.S. targets and international buyers. (2)
- It doesn’t matter how big you are, you can be bought. See the list below, and stop me if you’re still hearing rumors about Johnson & Johnson buying Boston Scientific or Edwards.
It’s always fun to look back and see how this niche continues to evolve and the strategy at play. Technology continues to innovate, and money is available, but exits are still a challenge for small players trying to justify relevancy. If 2020 is anything like what we saw the last few years, it will be another year of interesting consolidation. With that being said, here are my top 5 mergers/acquisitions this year – in no particular order.
(My) Top 5 Mergers and Acquisitions in the MedTech/Biotech Industry for 2019
1. BMS Acquires Celgene for $74B
This news hit the first week of January getting 2019 off to a roaring start. The deal has since closed but almost took a year creating a premier innovative biopharma company (3). Complimentary portfolios with leading franchises make them a true force in healthcare.
2. WebMD Acquires Aptus Health
Last year I shared the CVS acquisition of Aetna. This purchase by WebMD continues to show how healthcare is changing. This isn’t a device or biotech company being bought or merging but deals like these are going to shape healthcare. The terms of this deal weren’t announced, however the goal here is to combine strengths and improve reach and engagement to healthcare professionals, companies, patients and consumers (4).
3. Abbott Purchases Cephea Valve Technologies
There isn’t a dollar value disclosed on this deal, but one that I find interesting nonetheless because we have been talking about heart valve technologies for so long, and it isn’t stopping anytime soon (5). Do you realize that Abbott acquired Evalve (MitraClip) 10 years ago! And they are still at it. There are many more companies tackling this technology, including other innovative startups and the familiar big names: Edwards Lifesciences, Medtronic and Boston Scientific.
4. Pfizer Acquires Array Biopharma for $11.4B
I included this on the list because it took place in my backyard and saw how hard Array and the investors worked for this. This nice pickup for Pfizer will help them accelerate their long-term growth and strengthen their oncology category leadership (6). Well done guys!
5. Robotics
Last year the Mazor Robotics/Medtronic acquisition made the list and we thought we’d be talking about robotics for some time to come. Congratulations to my friends at Corindus Vascular and their acquisition by Siemens Healthineers for $1.1B, as well as J&J’s purchase of Auris Health for $3.4B.
In Conclusion
The top companies in life sciences and healthcare are changing constantly. Consolidation is not always ideal for everyone, but in some instances, makes a lot of sense. Regardless, I’m hoping that this industry continues to bring innovative products, therapies, efficiencies, and technology to this space to improve patient care.
(4) https://www.webmd.com/corporate/press/20190930/webmd-to-acquire-aptus-health#1
(5) https://abbott.mediaroom.com/2019-01-16-Abbott-To-Acquire-Cephea-Valve-Technologies-Inc
(6) https://www.pfizer.com/news/press-release/press-release-detail/pfizer_to_acquire_array_biopharma
Ken Dropiewski is a Managing Director with McDermott & Bull’s Life Science and Healthcare practice and has been doing search for nearly two decades. His expertise serves the medical device, biotechnology, and healthcare industry. Ken is especially known for work done in the cardiac, vascular, interventional, and oncology segments and has been in the Med-Tech field for 30 years. Prior to his career in search, he spent time in various commercial roles at Johnson & Johnson and Boston Scientific.
The end of the year is the time to talk. If you are a C Level executive and need to address some needs for your team in 2020, or even want to evaluate your own career aspirations, contact me, and we’ll set-up a quick call.
