Life Sciences And Healthcare M&A Forum

July 13, 2017 | 10 On The Park, New York

Welcome to Mergermarket's Annual Life Sciences and Healthcare M&A Forum

Within the life sciences industry, market observers are expecting biotechnology firms to be a standout performer in M&A over the next 12 months. The subsector accounted for 43% of life sciences activity in 2016, although the subsector jumped to 46% in 1H17. Wall St is anticipating investment and M&A to grow over the next several quarters driven by low interest rates, balance sheet cash and the need for larger firms to continue developing blockbuster drugs to fuel revenue growth.

There remains uncertainty around health insurance and hospital M&A, which the latter saw many regional and chain operators merge with one another or with physician groups, digital health firms and service providers. Similarly, health firms of all sizes have sought out acquisitions of digital health companies that provide a range of services from data and analytics to healthcare IT partly because of the move to value-based care over fee-for-a-service.

This event will feature esteemed panelists as they discuss the latest issues and trends that are impacting deal activity and financing in the healthcare and life sciences industries.

Agenda

Registration and Breakfast

Opening Remarks


Speakers
Peggy Cohen, Senior Vice President, Donnelley Financial Solutions

Corporate Boardroom Dynamics: Activism, Earn-Outs, Valuations and Compensation

Shareholder activism is always an issue for corporate governance and a large driver of M&A activity. The life sciences and healthcare industries are no exception. Of the USD 300bn in biopharma M&A activity in 2015, shareholder activism played a significant role with almost half (USD 112bn) driven by activists. Further, activist investor pressure and influence have been responsible for a number of market trends from asset divestitures to cost cutting and even the way CFOs record corporate performance.

What are the trends, challenges and values that activist shareholders bring to the boardroom and potential buyers?

  • What principal considerations are being addressed in earn-out provisions?
  • Structuring earn-out proposals – assessing recent trends of “biobucks,” milestones and other partnership concerns
  • Assess activist shareholders and CFOs emphasis on cost cutting vs. market share
  • How can corporates develop a defined growth strategy working with shareholder activists and changing economic conditions?

Speakers
M.K. Alisdairi, Managing Director, Head of Healthcare M&A, Perella Weinberg Partners
Amy Lissauer, Managing Director, Evercore
Ed Mullane, US Editor, Activistmonitor (moderator)

Coffee Networking Break

PE & VC Exit Conditions Outlook

When it comes to exits, especially in bio/health tech, sellers favor M&A over IPOs by a 20:1 ratio. Strategic buyers and PE/VC funds will fuel inorganic growth with cheap debt and balance sheet cash - both plentiful in the current environment. Over the last several years, sellers expected to get 8x-10x EBITDA on larger deals involving strategic sales. At the same time, 2016 has stood as the second best year for M&A of VC-backed tech firms. Conversely, only 38 IPOs in the pharmaceutical, medical and biotech sectors were listed last year raising about USD 3.2bn – down 57% from 2015, according to Mergermarket data. It appears 2017 is on pace to be equally disappointing for PMB IPOs as 1H17 data shows only 16 filings.

What is the outlook for these exit channels for buyout shop and venture capital investors?

  • Discuss exit opportunities for older fund vintages over the next 6 – 18 months
  • Forecast 2017/18 dry powder deployment, sector economics, and exit conditions
  • When does private placement financing make sense? Prior to IPO or strategic sale?
  • Challenges ahead in prepping portfolio companies for publicly traded life
  • Considering recent product development failures and a thin product pipeline among biotech companies, how are portfolio managers positioning these investments?

Speakers
Gabriel P. Cavazos, Director - Investment Banking, Leerink Partners
Eric Criscuolo, Lead - Healthcare/Technology, Global Listings, New York Stock Exchange
Jeremy W. Dickens, Partner, McDermott Will & Emery
Les Funtleyder, Healthcare Portfolio Manager, E Squared Capital
Daniel Perez, Director of Business Strategy, Venue Data Room, Donnelley Financial Solutions (moderator)

Value-Based Care Impact on Investment and M&A

The growth in value-based payment models continues to be seen as a key driver of healthcare M&A and investment. Private equity continues to source buyouts of primary care physician practices and other health firms in the managed-care environment, while the walls between health systems and insurers continue to break down. Population health management practices have also pushed various healthcare and life sciences companies to place a premium on size and scale – a factor for many of the 528 M&A deals in 2016.

What influence do value based care dynamics have on M&A and investment?

  • Dictates by US Centers for Medicare and Medicaid Services, i.e. "fee for value" vs. "fee for service"
  • Examine value-based care's macro trend of transferring risk and financial responsibility to providers from payers and to patients from providers
  • Discuss implications of ACA repeal on value-based care
  • Is there a shift in capital to assets that offer high reimbursement potential, such as medical groups and pain management? And why?

Speakers
Jon Krieger, Managing Director, Berkery Noyes
Matthew Margulies, Managing Director, Cain Brothers & Company,LLC
Victoria Poindexter, Principal, Hammond Hanlon Camp LLC
Dane Hamilton, Healthcare Editor, Mergermarket & Dealreporter (moderator)

Lunch

Digital Health Leads Industry Transformation

Firms in data analytics, connected health, digital therapeutics, consumer engagement, and others that comprise digital health continue to mature and thereby contribute to M&A activity. In 2016, 41 transactions closed, up 11% from 37 in 2015 and during 1Q17, there were close to 20 M&A deals of which, Apple's acquisition of sleep tracking startup Beddit was a highlight in early May. Investments in digital health are set to grow over the next 12 months due to a variety of factors, including many companies desire to be part of the growing US healthcare spend, which is estimated to reach 20% of GDP over the next several years.

Listen to panelists discuss how digital health firms are transforming the abilities and cost savings of traditional healthcare companies:

  • Assessing how providers are incorporating digital health into operations and patient engagement
  • Exploring how payers are increasingly using data analytics for preventive care measures and other areas
  • Which segments of digital health hold the biggest potential? A close examination of personalized care and outcome-based economics
  • How have previous deals faired in the past year?

Speakers
Gil Addo, CEO and Co-Founder, RubiconMD
Sarah T. Hogan, Partner, McDermott Will & Emery
Cynthia Nustad, Executive Vice President and Chief Strategy Officer, HMS, Inc.
Mark Tomaino, Operating Partner, Welsh, Carson, Anderson & Stowe
Dale C. Van Demark, Partner, McDermott Will & Emery (moderator)

Coffee Networking Break

The Science Behind Pharma Mergers

Globally, pharmaceuticals was the leading subsector in the first half of 2016 with 162 deals worth USD 83.2bn, but by the end of the year it had fallen behind Medical, with Pharmaceuticals seeing 348 deals worth USD 127bn compared to Medical with 926 deals worth USD 133.6bn. In 1H17, pharma saw 145 deals worth USD 36.7bn. That said, science, drug development, distribution, branding, and executive leadership/experience continue to drive these Pharma mergers. For instance, in the largest deal of 2016, Baxalta Inc and Shire Plc created a biotech company focusing on rare diseases and increased its presence in more than 100 countries. Another interesting contributor is the lion’s share of cash held abroad. If legislators are able to broker a deal in the new Congress to repatriate this cash, some observers are expecting companies to use it for more acquisitions along with dividends and share buybacks.

How are science and finance creating synergies among different life science companies?

  • Examine biotech and biopharma’s pursuit of financing and distribution to aid in commercialization of their products
  • Where along a firm's product life cycle are PE/VC firms and/or corporate partners adding value?
  • When do alliances and joint ventures make sense – co-developing drugs, royalty cash flows, and/or avoiding dilutive funding?
  • Discuss which drugs and devices have more pricing power than other segments in healthcare
  • Identify cross-border opportunities and challenges – from regulations to macroeconomic uncertainty
  • Will the slowing growth of drug prices impede or accelerate M&A activity?

Speakers
Matt Barnes, Principal, West Monroe Partners
Kristian Humer, Managing Director, Citi
Mihir Mantri, Managing Director, BMO Capital Markets
Jay Antenen, Senior Editor, Mergermarket Group (moderator)

Conclusion of Forum

*Agenda is subject to change

Contact Us

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Co-Sponsors

Venue


10 On The Park

60 Columbus Circle

10th Floor

New York, NY, 10019