Covid-19 vaccines, tests and treatments spur healthcare M&A
The coronavirus pandemic has disrupted entire industries in 2020, but perhaps none so much as healthcare. Contained in one industry is the global competition to develop test, manufacture and distribute a Covid-19 vaccine in record time and the fight to save patients from a virus that has killed more than 900,000 people throughout the world, including 190,000 in the U.S. The healthcare industry is also developing Covid-19 treatments; producing, administering and interpreting tests; and adapting new technologies and better methods for healthcare delivery and interaction with patients.
In recent weeks, there has been a slew of new deal announcements. Leveraging high interest in all things healthcare-related during the Covid pandemic, former KKR executive Jim Momtazee has launched Patient Square Capital, a Menlo Park, California-based private equity firm focused on healthcare deals. Momtazee spent 21 years at KKR, where he helped form the firm’s healthcare group in 2001 and led it for more than a decade.
Private equity investors aren’t the only ones announcing healthcare deals. Strategic buyers are rapidly snatching up targets focused on developers targeting a wide range of diseases, including the coronavirus, but not limited to it. Johnson & Johnson agreed to buy Momenta Pharmaceuticals Inc. for about $6.5 billion to expand in treatments for autoimmune diseases. And Sanofi said it would buy biotech company Principia Biopharma Inc., which develops treatments for multiple sclerosis and a range of autoimmune disorders, for $3.4 billion, as the French drugmaker pivots toward innovative therapies to spur growth.
All these developments are playing out in the deal landscape, and here we report on the issues that are making the biggest impact, most especially efforts to create a vaccine: The world’s largest pharmaceutical companies, in partnership with universities and philanthropists, are competing to develop vaccines while they also turn to acquisitions to maintain their businesses. Nearly as important is the ramp-up for coronavirus treatments and testing, as companies up and down the supply chain immerse themselves in facing the challenges. The business impact on hospitals and physician practices, the evolution of digital healthcare, and the perspective of healthcare investors round out our list of the top five trends driving healthcare M&A.