Health systems around the world were recently brought into the spotlight due to COVID-19. The pandemic showed the strengths and weaknesses of different health systems and demonstrated the importance of efficient health systems in promoting and maintaining the health of a population. The long-term impact of the global outbreak remains to be seen, but it is clear the pandemic revealed flaws in health systems. Changes to funding, organization, and institutions may end up being a positive result of a terrible event.
Macroeconomic conditions have deteriorated compared to previous years, there has been a pause in major deal flow in medtech, generally an industry with high deal activity, the largest companies have the balance sheets to make moves if valuations remain low, But given that caution is the key word coming out of the C-suite of several companies, big-deals may be hard to come by.
Large biotech companies hold plenty of cash, and with valuations down across the sector, we could see greater activity in 2023. Biotech M&A tends to remain elevated even in times of economic uncertainty; several major biotech deals occurred in the depths of the financial crisis in 2008. With increasing interest in Alzheimer’s treatments.
* According to Pitchbook’s 2022 Global M&A Report
FCL Industry Coverage
- Devices & Supplies
- Technology Systems
- Pharmaceutical & Biotechnology
Volume decreased significantly from 5,026 deals closed in Q4 2022 to 3,081 deals closed in Q1 2023. With gains in terms of deals closed in Q2 2023 with 4,211, an increase of 36% compared to Q1 2023. This was mainly driven by an increase in venture capital deals. We can see a stable to increasing trend in median post valuation between 2021 and 2022, with the highest value being $39.2 million in Q1 2023, but returning to the mean in Q2 2023 with a median valuation of $31.9 million.