2015 Sees Healthcare Investment Banking Rise Sharply
2015 has seen increased demand for products and services. All sub-sectors of healthcare, including life sciences, medical devices and IT, are benefiting from this and current levels of open equity. According to experts working within healthcare investment banking, markets are more robust now than they have been for three decades. It is predicted that life sciences, and in particular speciality pharmaceuticals and biotechnology, will continue to experience more investment – a pattern established in 2014, when these areas experienced the most interest in terms of IPOs since 1978.
It seems the boom can be attributed to a number of factors, but it is thought the most likely reason is the maturity and skills of those businesses operating within the industry. In recent years they have become better able to manage risk, money, regulatory obligations and clinical trials. As a result, more new drugs are reaching the approval stage and are doing so more quickly than ever.
‘Micro markets’ have also developed, driving the healthcare sector. Ups and downs appear more muted, with any downturns proving shorter-lived and with minimal impact.
If the worldwide economy continues through recovery and beyond, investment specialists such as Edgemont Capital can expect to facilitate a range of trends within healthcare investment, including the following.
While the number of mergers and acquisitions within the healthcare markets is likely to continue to increase, a new trend seems to be emerging – that of affiliations. The majority of these have so far been between healthcare systems, independent hospitals and, most recently, providers of post-acute care.
Increasingly, hospitals are looking to build larger facilities which effectively expand the services they can provide. The aim is to offer patients both diagnosis and treatment under one roof while also reducing the need for inpatient care.
Transparency on Price
As patients become responsible for an increasing number of expenses, there is need for a more transparent and accessible service. Investment in this area is set to increase as a result.
Investment in patient engagement increased significantly in 2014 and 2015 – a trend which will continue as physicians take on greater risks and accountability for patient care. In addition, establishing better, more cost-effective care and post-care procedures is considered essential, so investment into both of these areas is extremely valuable in the long term.