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HealthTech Heartbeat – Q1 2018 Market Review

By Henry Barnes 10 Apr 2018

Welcome to the Q1 2018 edition of the HealthTech Heartbeat – Results International’s quarterly market update of the HealthTech segment covering both Biopharma and Healthcare IT.

 

Biopharma IT has helped engineer a strong quarter for the HealthTech public market with the index achieving a 21.2% quarterly increase. Veeva (+32.1%) and Instem (+71.4%) outperformed analyst revenue estimates in their respective full year earnings reports, with the former trading at a sector high 13x revenue and spearheading investor appetite in the sector. Instem’s significant increase can also be attributed to securing a contract with a top five global CRO to outsource all of its data set generation. Tabula Rasa was the quarter’s top performing stock over the LTM period (187.8%+) with an increase due to strong financial performance since IPO

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Total deal volume remains consistent with the previous quarter at a total of 55 transactions, outperforming the same quarter in 2017. There were two high-profile $1bn+ transactions in the quarter: healthcare analytics provider Inovalon, which has conducted one technology acquisition a year since going public in 2015, executed its biggest deal to date with the $1.2bn purchase of ABILITY Network from Summit Partners. However, it was Roche Holdings that led the way following its acquisition of the remaining 87.4% stake in Flatiron for $1.9bn, surpassing Blue Apron as New York’s top venture capital-backed exit, demonstrating the value healthcare conglomerates will pay for applied data-driven technology.

UK-based Healthcare IT company Medopad provided one of the larger UK-based fundraisings in recent years and has been tipped to reach “unicorn” status in research reports. Having received an initial $28m in Series A funding, Medopad, an AI patient monitoring platform, is targeting $120m in equity capital over the coming months after securing over $100m of commercial projects and partnerships in China following Theresa May’s meeting with China’s President Xi – most notably the partnership with Tencent, China’s largest technology business. Medopad is definitely one to watch in the upcoming HealthTech Heartbeat editions as a potential IPO candidate.

M&A activity in the sector remains healthy and fundraising appetite strong. As a result, now is a good time to be contemplating fundraising, exit or growth through acquisition in the HealthTech space – if you are, please do get in touch.

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Henry Barnes

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