Life science and healthcare business movement has more than doubled compared to this same time last year. In fact, the first quarter of 2021 produced more healthcare merger and acquisition activity than any other quarter in history. While several catalysts have prompted this perfect storm in healthcare competition, the resulting changes will impact the future of global healthcare.
Volume and Trends
Positive trends are pointing toward a swift and clear economic recovery. In March 2021, analysts pointed to nearly 300 industry deals. This number, largely made up of acquisitions and mergers, represents the highest total in a single month. The unsurpassed opportunities and recognized revenue have encouraged new investors to enter the healthcare industry in search of the next lucrative deal.
Life science and pharmaceutical, physician services, and healthcare technology were the top three sectors for Q1 activity. Medical device and supply distribution and behavioral health services also appeared in the top grossing healthcare sectors in early 2021.
In a recent press release, Jazz Pharmaceuticals PLC announced their acquisition of GW Pharmaceuticals PLC, a deal valued at around $7.27 billion. These statistics are not surprising, considering the rapid changes in both healthcare and technology due to the pandemic.
Rise of Telehealth Services
The most noticeable and complex healthcare activity comes in the form of telehealth services. Due to the COVID-19 virus, physicians had to quickly pivot and embrace viable new ways to serve their patients. The resulting explosion in telehealth services created new and varied investment opportunities. Physicians were able to offer flexible hours, service features, and more payment options. Patients were ensured safe and comprehensive care with no loss of vital services or prescription coverage.
Walmart has made an unexpected play to get ahead of Amazon in the telehealth arena by acquiring MeMD. The strategic investment in omnichannel healthcare will catapult the retail giant into a new field of service. While Amazon Care will develop their niche in the telehealth industry with a focus on uninsured individuals, Walmart will likely take a different approach.
Experts predict that the superstore will leverage their brick and mortar presence to fully develop telehealth services. This simple case study stands to highlight the magnitude of increased activity in healthcare mergers and acquisitions. Telehealth services offer economical options and a mutually convenient business model for healthcare providers and patients.
The pandemic created countless shutdowns, closures, and inconveniences that lasted well over one year. However, response to the virus also sparked ingenious remedies and allowed innovative leaders to pivot into viable new business lines within broad industries. The telehealth subset is the perfect example of how investors connected within the pandemic to seek out new opportunities and solutions.
Future Investment Opportunities
Competition within the telehealth space will continue over the next several years. Fierce competitors and industry leaders vying for segment control will outperform, outpace, and outthink the marketplace standards.