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October 28, 2013 Issue:
Recent Health Care M&A Deals
Hospitals
Acquirer
Target
Price
OSF Healthcare System
Kewanee Hospital
N/A
Sabra Health Care REIT, Inc.
Forest Park Medical Center
$119.8 million
Laboratories, MRI and Dialysis
Acquirer
Target
Price
Trinity Biotech plc
Lab 21 Ltd
$7.5 million
Pharmaceuticals
Acquirer
Target
Price
PDL BioPharma
Rights to Diabetes Products
$240.5 million
Oxygen Biotherapeutics
Rights to Levosimendan
$4.8 million
Other
Acquirer
Target
Price
McKesson Corporation
Celesio Group
$8.3 billion
Technology Deal of the Week
The largest deal on the technology side of health care wasn’t for a drug, but the royalty rights to several drugs. Deopmed (NASDAQ: DEPO) sold the rights to its royalties and milestone payments on sales of its Type 2 diabetes products, all manufactured by other pharma companies. The new royalty recipient is PDL BioPharma, Inc. (NASDAQ: PDLI), formerly known as Protein Design Labs, Inc., which paid $240 million for a piece of the action on Glumetza, Janumet XR, Invokana and others. The rise in Type 2 diabetes diagnoses could pay off for PDL….Want to read more news? Click here for a free trial to The Health Care M&A Information Source and download the current issue today.
Charted Territory
Our third quarter M&A results are in—or out, actually. Deal making activity picked up in the third quarter of 2013, compared with the previous quarter. Deal volume was up nearly 16% versus the previous quarter, with 267 deals announced. This year’s third quarter also outperformed the same quarter a year ago, up almost 20%. However, deal value was down slightly compared with Q2:13. The preliminary total for M&A activity in the third quarter is $50.8 billion, down 4.2% compared with the $53.0 billion spent in Q2:13. Deal value actually grew by 35.1% compared with Q3:12, which was the pin that popped the 2012 M&A balloon. The full Health Care M&A Report, Third Quarter 2013 will be out shortly.
Deal Volume by Sector, Q3:13 vs. Q2:13 and Q3:12
Q3:13
Q2:13
Q3:12
Sector
Deals
Deals
Change
Deals
Change
Services
Behavioral Health Care
2
5
-60%
3
-33.3%
Home Health and Hospice
5
10
-50%
9
-44.4%
Hospitals
24
20
20%
18
33.3%
Laboratories, MRI and Dialysis
8
10
-20%
21
-61.9%
Long-Term Care
59
54
9.3%
50
18.0%
Managed Care
4
3
33%
7
-42.9%
Physician Medical Groups
16
17
-5.9%
6
166.7%
Rehabilitation
4
3
33.3%
3
33.3%
Other
38
29
31%
24
58.3%
Services Subtotal
160
151
6%
141
13.5%
Technology
Biotechnology
25
16
56.3%
20
25.0%
eHealth
16
8
100%
26
-38.5%
Medical Devices
23
25
-8.0%
19
21.1%
Pharmaceuticals
43
31
38.7%
17
152.9%
Technology Subtotal
107
80
33.8%
82
30.5%
Grand Total
267
231
15.6%
223
19.7%
Source: Health Care M&A News, October 2013
Want to read more news? Click here for a free trial to The Health Care M&A Information Source and download the current issue today
Services Deal of the Week
The largest deal in the health care services sector landed squarely in the “Other” category, since it involved wholesale and retail pharmacies. McKesson Corporation (NYSE: MCK) announced it would pay $8.3 billion for the German pharmacy retailer Celesio AG (XETRA: CLS1.DE), including assumption of debt. McKesson agreed to pay €23 per share for the 50.01% stake in Celesio owned by Franz Haniel & Cie. GmbH, as well as for all outstanding shares. The combined group expects to have annual revenues of more than $150 billion….Want to read more news? Click here for a free trial to The Health Care M&A Information Source and download the current issue today.
In the Pipeline
NextCODE Health of Cambridge, Massachusetts secured the exclusive license to a technology developed by deCODE genetics, which speeds up the process of diagnosing genetic diseases through the use of sequence data. NextCODE also secured $15 million in Series A financing from Polaris Partners and ARCH Venture Partners, which will go toward rapidly scaling its genomics services into clinical settings. The license grants five years of exclusivity, so NextCODE had better hurry. Want to read more news? Click here for a free trial to The Health Care M&A Information Source and download the current issue today.
mHealth Summit – Technology, Business, Research and Policy, December 8-11, 2013
Innovation and entrepreneurship will take center stage at the 2013 mHealth Summit, the largest global conference and expo focused on the intersection of mobile/wireless and healthcare delivery. The Venture+ Forum at the mHealth Summit, presented by HIMSS Media, is a must-attend event for VCs, investors, entrepreneurs and startups.
Taking place near Washington DC on December 8th, the Venture+ Forum will showcase transformative health information technology and explore investment opportunities to bring healthcare innovations to market. The event will spotlight new and emerging mobile health companies, showcase diverse funding sources and offer opportunities for networking with several hundred innovators and investors in mobile health and health IT. The hottest early stage and startup companies will be on hand to pitch and demo products, services, and solutions and exhibit within the Innovation Zone on the exhibit hall floor of the mHealth Summit.
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