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HealthTech Heartbeat – Q1 2019 Market Review

By Henry Barnes 16 Apr 2019

The outlook for healthtech M&A remains positive in Q1 with M&A and fundraising activity very healthy. M&A activity from the publicly traded healthtech companies was impressive this quarter.

Welcome to the  Q1 2019 HealthTech Heartbeat review – Results International’s quarterly market update of the global healthtech sector covering both biopharma and healthcare IT.

Highlights in the quarter:

  • AI, machine learning and natural language processing (NLP) remain at the forefront of innovation in the healthtech market. UK-based Linguamatics, a provider of NLP SaaS to the life sciences and healthcare industries, was acquired by a Tier-1 CRO, further exemplifying the trend. Results International acted as exclusive financial advisor to Linguamatics.
  • Bruker’s acquisition of Arxspan, a cloud-based provider of electronic lab notebook and workflow solutions, is a testament to the healthcare sector continually seeking to digitally transform its proposition. Since inception, Arxspan has quickly penetrated the $2.5bn global lab informatics market becoming a prominent player uniquely positioned to take advantage of the migration to cloud-based, real-time research collaboration solutions and laboratory automation. Results International acted as exclusive financial advisor to Arxspan.
  • Veeva System’s impressive FY18 results, which surpassed analyst estimates, drove the biopharma IT indices 34% higher this quarter which led healthtech’s reversal of Q4-18’s downward trend (Results International’s Healthtech Indices were up 16.2% in Q1).

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  • Despite not seeing a meaningful healthtech IPO since Sep-16, the wait may soon be over. In Q1, Change Healthcare and Health Catalyst were each reported to have plans to list on the public markets this year. The former has already filed for a $100m IPO, and the latter has recently reached a $1bn valuation through a $100m Series F round, in addition to reportedly hiring advisors to initiate the IPO process.
  • M&A activity from the publicly traded healthtech companies was impressive this quarter. Tabula Rasa, on the back of its two acquisitions last quarter, made its largest acquisition to date – paying 5.2x revenue for PrescribeWellness, a pharmaceutical patient relationship management solution, gaining a number of pharmacy-centric capabilities and significant synergies. Healthstream made its first acquisition since 2016, adding Providigm to its suite in order to expand its marketplace of solutions for the healthcare workforce.
  • This quarter we also saw a lot of activity from the medtech community: Livongo, which has aspirations to float in 2019, acquired myStrength, a chronic condition behavioural healthcare platform; and ResMed both acquired the assets of Interactive Health Network (a clinical, financial, online learning and certification company) and invested in Xealth (a prescription analytics platform) alongside heavyweights Novartis and McKesson.

The outlook for 2019 remains positive with M&A and fundraising activity very healthy. As a result, now is an excellent time to be contemplating fundraising, exit or growth through acquisition in the space – if you are, please do get in touch.

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Henry Barnes

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