Welcome to the Q2 2017 edition of the HealthTech Heartbeat – Results International’s quarterly market update of the HealthTech segment covering both Biopharma and Healthcare IT.
Maintaining momentum from Q1, HealthTech stocks have continued to rise over the last three months with all but one of the stocks tracked in the Results International Global Healthtech index trading up over the quarter. Once again, Veeva and Medidata, trading at 12.0 and 8.2x CY17 revenue respectively, were some of the strongest performers in the quarter. This continues to demonstrate the value being attributed to leading providers of software to the pharmaceutical and life sciences industry. Significant services deals in the sector over the last quarter also underline the attractiveness of the space as an end market for all solutions, not just technology products. Results International advised INC Research on its $4.6bn merger with inVentiv Health (which also sold Medidata eConsent and clinical trial software provider, Mytrus) and medical education provider, Lucid Group Communications, on its minority investment from UK PE house, LDC.
The crossover between technology and services was also demonstrated in the healthcare IT space specifically, with Telehealth provider Teladoc’s $440m acquisition of Best Doctors, a healthcare database and tech-enabled clinical consultation services provider, topping deal values in another strong quarter for HealthTech M&A. We tracked a total of 67 transactions, up from 51 in Q1 2017.
Teladoc, whose share price increased 37.7% in the last quarter and over 100% in the past year, is leading the growth of Telehealth which also attracted the biggest funding rounds in Europe over the last quarter. Most notably, UK-based Babylon Healthcare received c.$60m in series B funding for development of its AI doctor application, while similar offerings received over $50m in a watershed quarter for healthcare technology funding in Europe.
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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We hope that you enjoy the document and look forward to discussing the data and underlying themes with you. We have also produced our view on the previous quarter’s proceedings in a series of other market reviews on: