Beyond the Numbers: The Rebound and Current Financial State of the Biopharma and Med Tech Industries

 

COVID-19 rocked the world in most industries, but particularly for biopharma and pharmaceuticals, which were at the forefront. Tyler Ridley, Senior Manager of Valuation Services at Weaver, joined this episode of Weaver: Beyond The Numbers Podcast with Weaver hosts Howard Altshuler, Partner-In-Charge of Real Estate Services, and Rob Nowak, Tax Partner with Weaver, to discuss the rebound and current financial state of the biopharma and med tech industries.

Since the pandemic, the spike in healthcare initial public offerings (IPOs) and performance solidified the IPO pathway and exit strategy for life science investors. “I think it’s a shift in the narrative in biopharma and medical technology from profit-driven industries characterized by nefarious price gouging executives to more strategic industries that really came to the aid of the government and society more broadly in a time of crisis,” Ridley added.

While there were deal drop-offs in 2020 because of factors like the lack of elective surgeries, there was an increase in 2021 deals for digital therapeutics and delivery of care models. MedTech is just one example of this. “MedTech’s deal value has also exceeded 2020 totals so far and is on pace to be the highest value since 2017 despite a decline in total deal volume which indicates that the value per deal on average is increasing,” stated Ridley.

The M&A market has been muted this year, which is related to concerns with regulatory action to curb pricing power and lower drug prices. Risk tolerance to acquire other companies is not as favorable as it is to license their technology.

As for M&A activity for the rest of 2021, valuations are high, making it difficult for executives to gain acquisitions. The turbulent regulation environment combined with the lack of an FDA head is also hard to cope with. Additionally, the current supply chain issue may result in vertical acquisitions boosting M&A activity.

For more podcasts, whitepapers, and thought leadership on this topic, visit weaver.com.

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