Health Care Deal News, February 23, 2015 - Where Private Equity Spent its Healthcare Dollars in 2014


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Week ending February 20, 2015: 


Recent Health Care M&A Deals


Target Price
Sanofi SA License to small-molecule therapies N/A
Intrexon Corporation ActoGeniX $60 million
Cerecor Rights to KOR antagonist N/A
UPMC Jameson Health System Merger
Medical Devices  
3M Company Ivera Medical Corp. N/A



ADCS Still Picking Off Dermatology Practices 

Last week, Maitland, Florida-based Advanced Dermatology and Cosmetic Surgery (ADCS) announced its third acquisition in 2015, of a solo dermatology practice in Livonia, Michigan. It follows the previous week’s announcement that Deland Dermatology & Surgery, in Deland, Florida, joined the company, and the January acquisition of Spencer Dermatology Skin Surgery Center in St. Petersburg. No financial terms were disclosed, of course. ADCS now operates a far-flung dermatological empire with more than 100 clinics in Arizona, Colorado, Florida, Georgia, Ohio, Nevada, Michigan, Pennsylvania, South Carolina and Wyoming. We expect some PE firms are ready to put some skin in this game.



Private Equity Targets in 2014

Much has been made over the big deals done in the Pharmaceutical sector in 2014. Not much was made of the $16.8 billion spent by private equity firms or their portfolio companies in the health care arena, perhaps because it only amounts to 4% of the $387 billion total. And the 144 deals announced by PE firms makes up just 11% of the year’s 1,305 total. The most popular targets were Long-Term Care (38), Other Services (28) and eHealth (21). Only 56 deals disclosed a price, so spending is actually much higher than $16.8 billion. We’ll keep digging.


Private Equity Acquisitions in 2014, by Sector



Behavioral Health Care 3 N/A
Home Health & Hospice 10 N/A
Hospitals 4 $545 million
Labs, MRI & Dialysis 3 $4.15 billion
Long-Term Care 38 $4.14 billion
Managed Care 3 N/A
Physician Medical Groups 3 N/A
Rehabilitaion 3 N/A
Other Services 28 $2.5 billion
Services subtotal 95 $11.3 billion
Biotechnology 4 $789.8 million
eHealth 21 $675.9 million
Medical Devices 17 $3.5 billion
Pharmaceuticals 7 $562 million
Technology subtotal 49 $5.5 billion
Grand total 144 $16.8 billion

Source: The Health Care M&A Information Source, February 20, 2015



Jameson Health System Joins UPMC

A year after signing a nonbinding letter of intent to merge, New Castle, Pennsylvania-based Jameson Health System signed a definitive agreement to merge with Pittsburgh-based UPMC. UPMC already operates more than 20 hospitals, 400 physician offices and outpatient sites, as well as a 2.5 million-member health insurance division. When the letter of intent was signed in September 2014, UPMC said it would invest $70 million to develop Jameson facilities and services over the next 10 years. Of that amount, at least $15 million will be spent on improvements in the next two years.



Cleveland Biotech Lands $30 Million and a New Home

Far from the biotech centers around Boston and San Francisco, ChanRx plugged away at developing a therapeutic drug candidate to treat atrial fibrillation and atrial flutter. Its efforts produced vanoxerine, which shows potential to become a leading pharmaceutical option to rapidly terminate AF in hospital and home settings. Enter investors with Series B financing of $30 million, and voila—ChanRx becomes Laguna Pharmaceuticals, moves its headquarters to La Jolla, California, and gets a new CEO, Bob Baltera, former CEO of Amira Pharmaceuticals. Versant Ventures and Frazier Healthcare led the round, joined by BioMed Ventures and Series A investor Sante Ventures..................Click here for a free trial to The Health Care M&A Information Source and download the current issue today.


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