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1、2Healthcare Industry ReportExecutive SummaryKey Report HighlightsMarket OverviewGenerative AI and Digital TransformationRegulatory LandscapeEmerging Healthcare Trends-Surge in Healthcare Consolidation-Increased Outsourcing and Offshoring to Tackle Labor Shortages-Increased Investment in Outpatient S

2、ervices-Rising Demand for Weight-loss Drugs-Transition from Fee-for-Service Model to Value-based ModelFunding and Investment Landscape-Funding Outlook-Healthcare Sector Market Performance-Healthcare Deals in 2024CONTENTS010203040506073Healthcare Industry ReportThe US healthcare industry is on the cu

3、sp of significant growth,driven by a burgeoning and aging population of over 340 million,alongside regulatory tailwinds and technological advancements.In 2023,the industry grappled with various challenges,including workforce shortages,inflationary pressures,tight profit margins,disruptions in supply

4、 chains,and diminishing consumer trust within the intricate web of relationships between providers,payers,and patients.However,as we look to 2024,optimism surrounds emerging trends and investor interest in the industrys future.Generative AI(GenAI)is poised to play a pivotal role in addressing evolvi

5、ng consumer demands and the global scarcity of healthcare professionals.Its widespread adoption in clinical settings necessitates substantial investments in infrastructure,which is in its nascent stages,presenting lucrative opportunities for investors.Amidst a financially challenging landscape,the h

6、ealthcare sector seeks strategies such as consolidation,outsourcing,and emphasizing outpatient care to enhance cost-effectiveness and operational efficiency a trend likely to persist in the coming years.Additionally,the market dynamics are influenced by the introduction of new weight-loss drugs and

7、a transition towards value-based care Medicare models.These shifts,along with the industrys resilience,sustained growth prospects,and avenues for innovation,have positioned healthcare as a focal point for PE and VC strategies.Executive SummaryWhat is driving the US healthcare industry?1.4X11.5%incre

8、ase in Americans aged 65 and above is projected from 2022 to 2050,per Population Reference Bureau of the US GDP will be social security and medicare expenditures in 2035,up from 9.1%in 2023014Healthcare Industry ReportKey Report HighlightsThe healthcare industry in the US is positioned for significa

9、nt expansion,driven by factors such as a growing and aging population,changes in disease prevalence,regulatory tailwinds,and the introduction of innovative and specialized technologies.Healthcare has taken center stage in regulatory agendas,focusing on critical areas such as accessibility,affordabil

10、ity,transparency,Medicare,and engagement of the private sector.Outpatient care,outsourcing,and offshoring have emerged as preferred strategies for cost reduction.Centers for Medicare and Medicaid Services(CMS)has set a goal to establish a value-based care relationship for every traditional Medicare

11、beneficiary by the year 2030.GenAI is primed to emerge as a transformative solution to bridge the gap between evolving consumer expectations and a global shortage of healthcare providers.Healthcare providers are increasingly considering consolidation,recognizing the operational advantages of unified

12、 management.The global weight-loss drug market achieved an annualized value of$6 billion in 2023 and is anticipated to expand over 16 times to reach$100 billion by 2030.Fundraising activity in healthcare specialist PE reached a record high in 2023,totaling$18.3 billion,and US VC funds focused on hea

13、lth raised$19 billion,marking the third-highest year.5Healthcare Industry ReportThe US has one of the most complex healthcare systems globally,marked by intricate relationships among providers,payers,and patients.This complexity is influenced by various factors,including consumer preferences,regulat

14、ory changes,and technological advancements.The US leads the world in healthcare spending,with 16.6%of its GDP allocated to healthcare in 2022,according to the OECD.Projections from the CMS suggest that healthcare spending will continue to rise at an average rate of 5.4%annually,surpassing GDP growth

15、 rates with healthcare likely to account for 19.6%of the GDP by 2031.This growth is driven by factors such as a growing and aging population,shifts in disease prevalence,and the adoption of innovative technologies.The healthcare landscape in the US is characterized by intricate interdependencies bet

16、ween providers,payers,and patients,making it one of the most complex systems in the world.The industry is driven by factors such as a growing and aging population,shifts in disease prevalence,and the adoption of innovative technologies.However,it also faces significant challenges,including labor sho

17、rtages,inflationary pressures,slim profit margins,supply chain disruptions,and dwindling consumer trust.Market Overview 02Chart 1:GDP per capita and health consumption spending per capita,U.S.dollars,2022(current prices and PPP adjusted)Source:OECD,Peterson-KFF$15K$10K$5K$10K$20K$30K$40K$50K$60K$70K

18、$80K$90K$100K110K$120K$130K$140K$150K0Health Spending PerCapitaGDP Per Capita6Healthcare Industry ReportIn the past year,the healthcare industry has grappled with numerous challenges,including labor shortages,inflationary pressures,slim profit margins,supply chain disruptions,and dwindling consumer

19、trust.The labor shortage is the most pressing issue of all.A McKinsey study shows a significant increase in resignations among healthcare professionals,jumping from about 400,000 per month in 2020 to 600,000 by May 2023.The American Hospital Association(AMA)anticipates a shortage of up to 3.2 millio

20、n healthcare workers by 2026.One key factor behind this shortage is the gap between rising wages and insufficient funding from healthcare providers.Despite a slower growth rate of 4.7%in average hourly earnings in 2023 compared to the pandemic peak,this figure still surpasses the 2.4%average increas

21、e seen from 2010 to 2019,according to Fitch.However,organizations are making cost-saving efforts such as HCA Healthcare reducing contract labor costs by 20%year-over-year,Tenet Healthcare lowering contract labor costs to 4.3%of total compensation,and CHS Healthcare aiming for a 50%reduction in contr

22、act labor spending compared to 2022.Other factors contributing to the shortages include burnout,shifting demographics,a limited talent pool,and the demanding nature of the medical profession.Chart 2:US Healthcare Spending Projection$7,175$4,255$2,677$1,483$786$294$821971198119912001201120212031PUnit

23、ed States,1971 to 2021,Selected Years,and 10-Year ProjectionIN BILLONSRecent Detail20172018201920202021$3,446$3,604$3,757$4,144$4,255Source:CALIFORNIA Health Care Almanac7Healthcare Industry ReportFigure 1:US Healthcare Market OverviewHealthcareSpending$7 trillion by2031 Pharmaceuticalsand DrugDisco

24、very Healthcare ITHealthcareEquipment PharmaceuticalDistribution Hospital andHealthcareCentres BiotechnologyEli Lilly andCompanyVeeva SystemsIncAbbottLaboratoriesMcKessonCorporationHCA Healthcare,Inc.AbbVie Inc.Johnson&JohnsonMultiPlanCorporationStrykerCorporationCencora,IncTenetHealthcareCorporatio

25、nAmgen Inc.Merck&Co.,Inc.Evolent Health,IncIntuitive SurgicalInc.Cardinal Health,Inc.Universal HealthServices,Inc.Gilead Sciences,Inc.Pfizer Inc.,Teladoc Health,Inc.Boston ScientificCorporationHenry Schein,Inc.CommunityHealth Systems,Inc.VertexPharmaceuticalsIncorporatedBristol-MyersSquibbCompanyCer

26、tara Inc.Becton,Dickinson andCompanyPattersonCompanies,IncEncompassHealthCorporationRegeneronPharmaceuticals,Inc.8Healthcare Industry ReportGenerative AI and Digital TransformationVarious applications of GenAI are already transforming healthcare delivery:Personalized Treatment:By leveraging patient-

27、specific data,including genetic information,AI models can predict individual responses to various treatments and medications.CueZen,an AI-powered personalization engine for health,has been recently selected for the Microsoft for Startups Pegasus Program.Enhanced Diagnostic Accuracy:Generative Advers

28、arial Networks(GANs)and Variational Autoencoder technologies have demonstrated remarkable results in medical imaging.A study published by Nature Medicine revealed that GANs improved diagnostic accuracy in breast cancer mammography by over 5.7%.Streamlining Administrative Operations:Beyond patient ca

29、re,GenAI algorithms optimize hospital workflows,manage patient data,and predict patient admission rates,among other tasks.Health systems like HCA Healthcare are exploring partnerships with Google to leverage GenAI,potentially reducing administrative burdens and addressing clinician burnout.GenAI sol

30、utions can help manage labor costs in this services-heavy industry and support the sustainability of healthcare organizations.By leveraging advanced algorithms and vast amounts of data,AI systems generate new insights,predict outcomes,and create solutions to complex medical challenges.03GenAI has em

31、erged as a transformative solution as health systems struggle to meet evolving consumer expectations while facing a global shortage of healthcare providers.Studies,such as one conducted by Humana and the University of Pittsburgh School of Medicine,highlight the potential of GenAI to address ineffici

32、encies in healthcare spending,potentially eliminating a significant portion of the$1 trillion wasted annually.The global market for GenAI in healthcare reflects this promise,with a valuation of$1.6 billion in 2022,projected to soar to$30.4 billion by 2032,according to Allied Market Research.Notably,

33、75%of leading healthcare companies are already exploring or implementing GenAI solutions,as reported by Deloitte.9Healthcare Industry ReportFigure 2:The Impact of GenAI Based on Task and ValueAbility for GenAI to execute tasks in health care rolesCost and complexitity to realize value using GenAIHig

34、hData entryClassificationSummeri-zationContentgenerationVisualizationCalculationPredictionInterpretation OptimizationDecisionInnovationEmpathyHighLowLowHospitaladmissionsclerkMedicalrecords clerkMedicalScribeMedicalreceptionistClinical dataspecialistRegulatoryaffairsMedicalrecordstechnicianAudiologi

35、stTelehealthnurseQualityassuranceClinical datamanagerClaimsreviewerLaboratoryTechnicianMedicalcoderMedicalbillingspecialistResearchassociateMedicalwriterPatientServices rep.HealthInformationmanagerMarketingspecialistHealth coachMarktingdesignerIT technicianPharmacytechnicianClinicalresearchCoordinat

36、orBio-statisticianBio-InformaticianDosimetristData ScientistEpidemiologistAcutaryUnderwriterData analystRadiologytechnicianRadiologyDermatologyClinicaloperationsmanagerProcessengineerSupply chainanalystPatientaccesscoordinatorSchedulerCharge nursePhysicaltherapistGeneralPractitionerPharmacistHospita

37、ladminSpecialistphysicianResearchscientistBiomedicalengineerBusinessstrategistResearchassociateMarketinganaystHome healthaideMedicalassistantCounselorAccountmanagerSales repPsychologistPrimary carephysicianMedicaldirectorSurgeonsRespiratorytherapistOptometryPathologyHealth careeconomistPublic health

38、educatorPatientaccessCoordinatorMedicalImagingSpecialistSource:DeloitteWhile the potential of GenAI in healthcare is immense,its adoption is not without challenges.Data privacy concerns,the need for robust regulatory frameworks,and ensuring algorithmic transparency and fairness are critical issues t

39、hat need addressing.Additionally,the integration of GenAI into clinical practice requires significant investment in infrastructure and training for healthcare professionals which is still at its nascent stages.Recently there have been a host of strategic partnerships of prominent healthcare organiza

40、tions with technology firms to leverage GenAI tools.For example,Microsoft has joined forces with Epic Systems,a healthcare software company,and Cognizant to streamline clinician operations.Googles partnerships with Bayer,HCA,and Meditech are directed at improving clinical trial,documentation,and rec

41、ording processes.VC and PE funds are also actively investing in companies specializing in GenAI.Abridge,a Gen AI-powered clinical documentation tool,recently raised a$150 million series C round led by Lightspeed Venture Partners and Redpoint Ventures.Genesis Therapeutics,a platform utilizing gen AI

42、for drug discovery,secured a$200 million series B round,with support from Andreessen Horowitz,Fidelity,and BlackRock.Syneos Health,acquired by Elliott,Patient Square,and Veritas,inked a multiyear agreement with Microsoft to utilize OpenAIs ChatGPT in clinical trials and commercial initiatives.Simila

43、rly,Iodine Software,backed by Advent,has partnered with OpenAI to integrate LLMs into its product suite.Biomedical Research and Drug Development:GenAI is accelerating innovation in drug discovery,exemplified by the strategic collaboration between Sanofi and BioMap.Sanofi aims to optimize the drug di

44、scovery process using BioMaps AI platform.Health Education Assistance:With a significant portion of adults in the US seeking health information online,GenAI offers a promising solution to deliver reliable and accessible health information.Companies like Ada Health provide curated and clinically vett

45、ed knowledge bases to empower healthcare consumers and caregivers.300%budget expansion for generative AI initiatives is projected by various technical leaders in the healthcare and life sciences industries,according to a survey by John Snow Labs10Healthcare Industry ReportRegulatory LandscapeRegulat

46、ion in healthcare has placed significant emphasis on several key areas,including accessibility,cost,transparency,Medicare,and private sector involvement.04In December 2023,Congress passed the Lower Costs,More Transparency Act,aimed at enhancing price transparency across the healthcare system and add

47、ressing the affordability of prescription drugs.By providing patients with better information on costs prior to procedures,the act aims to empower them to make informed decisions and potentially save on their healthcare expenses.Furthermore,the act includes a provision to reduce Medicare payments to

48、 hospitals for specific services also offered in outpatient facilities and physician offices.Recently,the Department of Justice,Federal Trade Commission,and Department of Health and Human Services jointly announced a cross-government public inquiry into the growing involvement of PE and corporations

49、 in healthcare.Primarily an antitrust initiative,this inquiry reflects government concerns that PE transactions in healthcare may prioritize profit maximization over quality care.The focus on Medicare reforms is expected to intensify in 2024 as significant deadlines approach,including those affectin

50、g telehealth coverage,payment policies,and alternative payment models.Congress is anticipated to take action before 2025 to preserve telehealth flexibilities introduced during the COVID-19 pandemic,including relaxed geographic and originating site requirements,and a temporary halt to restrictions on

51、 telehealth reimbursement rates,as per the Common Wealth Fund.Addressing the shortage in the behavioral health workforce,combating the opioid epidemic,and reducing the escalating rates of negative mental health and substance use outcomes,especially among children,remain bipartisan priorities.Lawmake

52、rs aim to enhance their capacity to respond to the opioid overdose crisis through the reauthorization of the SUPPORT Act.Additionally,the Senate Finance Committee is pursuing policies to improve timely access to behavioral health services for beneficiaries of Medicare,Medicaid,and the Childrens Heal

53、th Insurance Program.$7 trillionis projected to be paid by the US Department of Health and Human Services to Medicare Advantage health insurance companies over the next 10 years11Healthcare Industry ReportEmerging Healthcare Trends 05Surge in Healthcare ConsolidationAs economic pressures persist,hea

54、lthcare providers are increasingly considering consolidation,recognizing the operational advantages of unified management.In 2023,financial challenges played a significant role in driving M&A activities,with financial distress cited as a factor in 28%of announced transactions,a notable increase from

55、 the 15%reported in 2022,per Kaufman Hall.Despite regulatory changes implementing stricter standards for assessing whether proposed deals could result in excessive market concentration,M&A activity is anticipated to steadily rise.A recent report from KPMG predicts a surge in megadeals and cross-mark

56、et transactions,allowing for new economies of scale without triggering antitrust concerns.The industry headwinds have restrained investor interests,making strategic acquisitions the predominant choice.According to Pitchbook,firms that have traditionally focused on healthcare providers are now pivoti

57、ng toward healthcare IT and pharma services.The Health Assurance Transformation Corporation,a subsidiary of the venture capital firm General Catalyst,recently announced its intention to acquire Summa Health,a hospital system in Ohio.Penn Medicine plans to acquire Doylestown Health.In New Jersey,Huds

58、on Regional Hospital and CarePoint Health System have declared a merger,forming a new system encompassing both for-profit and nonprofit hospitals.Healthcare providers are grappling with nationwide labor shortages,inflation challenges,and depleted COVID-19 relief funds,resulting in negative operating

59、 margins.In 2022,over half of U.S.hospitals reported negative margins.While there was a slight improvement in 2023,the ratio of hospital downgrades to upgrades remained 3:1,according to Fitch Ratings.Consolidation has enabled providers to operate more efficiently and is helping struggling providers

60、keep their doors open in underserved areas.Chart 3:Percentage of Announced Transactions Involving a Financially Distressed Party,2019 2023Source:Kaufman Hall18.6%16.7%15.2%15.0%27.7%10.0%14.0%18.0%22.0%26.0%30.0%2019202020212022202312Healthcare Industry ReportIncreased Outsourcing and Offshoring to

61、Tackle Labor ShortagesHealthcare organizations have faced financial challenges due to escalating labor costs and high interest rates,prompting hospitals to adopt outsourcing as a strategic measure.This shift,fueled by staffing shortages,aims to optimize operations,improve patient care,and achieve fi

62、nancial sustainability.The US Hospital Outsourcing market is estimated to grow at a CAGR of 10.8%,reaching$351.64 billion in 2032 from$126.67 billion in 2022,according to Precedence Research.Administrative and IT functions like revenue cycle,billing,claims,finance,human resources,clinical administra

63、tion,and supply chain are key areas for complete or partial outsourcing.North America currently holds the largest share,49%,in healthcare BPO,according to MarketsandMarkets.A study by Deloitte projects cost reductions of up to 50%by offshoring,for large health systems spending over$50 million.Accord

64、ing to the Manila Bulletin,the Philippines has recently established itself as the worlds leading destination for healthcare BPO.In 2022,the countrys outsourced medical billing companies alone are estimated to have generated revenues surpassing$15 billion.IT functions outsourcing is widely recognized

65、 to save approximately 30-40%in costs,and by 2021,around 90%of U.S.hospitals had outsourced at least one IT service to enhance their operational efficiency.The healthcare outsourcing sector has witnessed notable acquisitions in recent years.Omega Healthcare acquired the medical coding company Himagi

66、ne Solutions,AGS Health acquired a patient access BPO unit based in India,and Warburg Pincus and Brookfield invested$1 billion in Everise,a healthcare services outsourcing firm.Increased Investment in Outpatient Services Outpatient care has evolved as another strategic cost-reduction effort by healt

67、hcare providers.Outpatient care enables the expansion of providers geographic presence at relatively low costs while catering to evolving patient preferences.Establishing facilities in convenient locations,capable of embracing emerging technological trends,holds the potential to attract recurring pa

68、tients and is often less capital-intensive than traditionally large infrastructural setups.According to Kaufman Hall,revenue from outpatient services has experienced significant growth,increasing by more than 40%compared to 2020.Additionally,the CMS projects a substantial 16.9%growth in the demand f

69、or outpatient services among individuals aged 55 and above by 2025,offering a transformative opportunity for the healthcare industry.The shift to adopt increased outpatient services is anticipated to be coupled with the divestiture of more costly lines of service.Hospitals are likely to experience c

70、losures in departments such as maternity services,inpatient rehabilitation services,or behavioral units,particularly in rural facilities.Beckers Hospital Review noted that over 70 hospitals undertook department closures or service terminations in 2023.ACEP Now reported that 640 hospitals,predominant

71、ly in rural areas,recently did not pass financial stress tests,indicating they are at immediate risk of closure,prompting a reduction in expensive yet essential services.49%16.9%market share in held by North America in the healthcare BPO marketgrowth in the demand for outpatient services among indiv

72、iduals aged 55 and above by 2025,per CMS.13Healthcare Industry ReportRising Demand for Weight-loss Drugs The global weight-loss drug market achieved an annualized value of$6 billion in 2023 and is anticipated to expand over 16 times to reach$100 billion by 2030,according to Goldman Sachs.Leading the

73、 market transformation in diabetes and obesity treatment are key players like Novo Nordisks Ozempic and Wegovy,along with Eli Lillys Zepbound and Mounjaro.The potential market for these drugs is substantial,with approximately 11.6%of the American population,according to the Centre for Disease Contro

74、l and Prevention,and 60 million European adults,according to the World Health Organization(WHO),estimated to have diabetes.Simultaneously,the global prevalence of obesity is estimated to impact one in eight people,per WHO.Consequently,the emergence of new weight-loss drugs,specifically glucagon-like

75、 peptide-1(GLP-1)agonists,is positioned to become a key industry driver.According to GlobalData,the global GLP-1 market is projected to grow from$36.6 billion in 2023 to$105 billion by 2029,achieving a CAGR of 19.2%.Novo Nordisk and Eli Lilly are anticipated to lead this growth.Eli Lilly,in particul

76、ar,reported a substantial surge in sales for its Mounjaro drug,reaching$980 million in 2Q23 compared to$16 million in the drugs initial launch quarter,2Q22.Chart 4:Global Projections of GLP-1 Drug SalesSource:MorningstarNovo NordiskEli LillyAmgenRocheOther70,00052,50035,00017,50020222023E2024E2025E2

77、026E2027E2028E2029E2030E2031E2032E0$Mil11.6%American population to be the potential market for Weight-loss Drugs14Healthcare Industry ReportTransition from Fee-for-Service Model to Value-based Model Fee-for-service represents a traditional healthcare payment model where providers receive compensatio

78、n based on the number of visits and services they offer.In contrast,value-based care(VBC)is a more contemporary approach that ties compensation to patient outcomes,encouraging providers to prioritize quality over the volume of services provided.According to Humana,patients under the care of VBC phys

79、icians exhibited significantly lower acute care usage and experienced fewer potentially avoidable events.Over the past decade,the number of patients receiving healthcare through VBC arrangements increased by 2.3 million.Further,VBC arrangements led to a 30.1%reduction in in-patient admissions and ge

80、nerated 23.2%more savings in medical costs compared to Original Medicare beneficiaries in 2022.The CMS has set a goal to establish a VBC relationship for every traditional Medicare beneficiary by the year 2030.According to McKinsey,private capital investments in VBC companies witnessed a fourfold in

81、crease between 2019 and 2021.The growth of VBC across all health plans is expected to continue accelerating to potentially reach an enterprise value of$1 trillion.23.2%more savings in medical costs with Value-based Model in comparison to Original Medicare beneficiaries in 202215Healthcare Industry R

82、eportFunding and Investment Landscape06Healthcare has become a focal point for PE and VC strategies,driven by its reputation for acyclicity,sustained tailwinds,and innovation opportunities.Factors contributing to this interest include an aging population,the imperative for improvements in patient ex

83、perience,and the potential for advancements in AI and personalized medicine.A survey conducted by Coller Capital found that 87%of LPs consider healthcare and pharmaceuticals attractive sectors for PE investment over the next two years.According to Pitchbook,fundraising activity in healthcare special

84、ist PE reached a record high in 2023,totaling$18.3 billion.Notably,this surge was concentrated on larger funds.In terms of performance,healthcare PE specialists in North America and Europe outperformed their peers across all PE managers in the same geographic regions for the 2012 to 2014 vintage,mai

85、ntaining competitive performance levels with other managers for more recent vintages.Additionally,North America hosts the highest value of healthcare deals at$29 billion,with biopharma accounting for 25%of deal activity and 54%of deal value,according to Bain&Company.Healthcare has become a focal poi

86、nt for PE and VC strategies,driven by its reputation for acyclicity,sustained tailwinds,and innovation opportunities.Factors contributing to this interest include an aging population,the imperative for improvements in patient experience,and the potential for advancements in AI and personalized medic

87、ine.Chart 5:Healthcare PE Fundraising ActivitySource:Pitchbook$2$4$5$3$6$6$8$10$10$17$16$18916191418222629364843210102030405060$0$2$4$6$8$10$12$14$16$18$20201220132014201520162017201820192020202120222023*Capital raised($B)Fund count16Healthcare Industry ReportChart 6:North America Hosts the Highest

88、Value of Healthcare DealsSource:Bain&CompanyHealthcare buyout value,2018-22,$billions(Excluding add-on deals)Healthcare buyout value,2023E,$billions(Excluding add-on deals)Provider and related servicesBiopharama and related servicesMedtech and related servicesPayer and related servicesLife sciences

89、tools and related services$263North AmericaEuropeAsia-PacificRest of world103791North AmericaEuropeAsia-PacificRest of world$2914142PlayerNumber of Investments in Healthcare Since 2022Exits in HealthcareAUM*Dry Powder*Shore Capital Partners14666,0001,231.6Webster Equity Partners8317,035.41,835.2Lind

90、en Capital Partners7517,979.61,584.8Kohlberg Kravis Roberts(KKR)6510553,00099,000Audax Private Equity63519,0009,271.6Waud Capital Partners5244,639.5502.2Quad-C Management4713,033.61,184.9The Invus Group45910,000HarbourVest Partners437117,00033,741.8TPG 4212222,00045,942.7Table 1:Most Active PE Playe

91、rs in Healthcare Since 2022Source:Pitchbook,Alternatives WatchIn 2023,US VC funds focused on health raised$19 billion,marking the third-highest year,according to Silicon Valley Bank.However,the number of deals declined by approximately 30%from 54,801 in 2022 to 36,477.This indicates a stabilization

92、compared to the peak in 2021 and a return to previous levels.Additionally,there is optimism that deployment will rise as inflation eases and the Federal Reserve halts rate hikes.SVB notes that VC investors,who previously favored later-stage deals,have undergone a decisive shift towards earlier-stage

93、 deals that are sheltered from public market volatility and may have cleaner cap tables without the complications of down rounds or inflated valuations.Consequently,this shift has resulted in smaller investment amounts being spread across a growing number of companies.17Healthcare Industry ReportFig

94、ure 3:Most Active VC Investors Source:Silicon Valley BankOverallBiopharmaHealthtechDx/ToolsDevice553636101254333491047222677442125774217187640171866371614653414126518Healthcare Industry ReportFunding Outlook The industry is optimistic,given the favorable outlook of demand and supply dynamics.Increas

95、ed healthcare spending and a growing aging population are key factors driving up demand.According to the CMS,the proportion of GDP spent on healthcare in the U.S.is predicted to reach nearly 19.6%by 2031.The demand for healthcare technology,in particular,is experiencing rapid growth,with the market

96、expected to expand at a CAGR of 15.6%from 2023 to 2028,according to MarketsandMarkets.On the supply side,there has been a significant increase in investments in research and development(R&D),leading to an accelerated rate of new drug approvals.20 years ago,companies allocated approximately 15%of the

97、ir sales to R&D,and now that number has surpassed 20%,according to data from the FDA and Empirical Research Partners.Simultaneously,there has been a gradual alignment of expectations between sellers and buyers.Private investors are driven by a growing pressure to divest assets and deliver returns to

98、 their LPs who are facing prolonged holding periods,reaching a 20-year high of 7.1 years for North American PE funds in November 2023 per S&P Global.This trend has led to an upsurge in assets entering the market.Concurrently,PE investors globally are holding an unprecedented dry powder,reaching a re

99、cord high of approximately$2.6 trillion,per S&P Global,with the leading healthcare players holding approximately$195 billion(see fig.8).According to a BCG survey,40%of investors express a bullish sentiment regarding prospects for 2024,and 65%report an optimistic outlook over the next three years.Con

100、fidence going forward is expected to increase with improvements in macroeconomic conditions.Further,industry trends,including the expansion of AI,the emergence of a new category of weight-loss drugs,increased adoption of outsourcing and outpatient care,coupled with the positive impacts of the Inflat

101、ion Reduction Act beginning to materialize,are positioning healthcare deals as a focal point in coming years.65%investors express an optimistic outlook over the next three yearsThe industry is optimistic,given the favorable outlook of demand and supply dynamics.Increased healthcare spending and a gr

102、owing aging population are key factors driving up demand.Chart 7:Impact of Several Trends of Multiple Healthcare SegmentsSource:Boston Consulting GroupBusinessChallengesContinued labor shortageRA ImplementationEvolving regulatory landscapeMargin pressuresShifting sites of careGrowth of GLP-1sDeploym

103、ent of traditionaland generative AIDegree of end market impact:HighMediumLowOngoingstrategic shiftsHealth careinnovationHealth care segmentTrendBiopharmaMedtechLST/IVDProviderPayerHCIT119Healthcare Industry ReportHealthcare Sector Market Performance Healthcare,comprising approximately 13%of the S&P

104、500,experienced a lackluster performance in 2023,with only a 0.3%increase compared to the S&P 500s robust 24%surge.This was a consequence of investors favoring a select group of large tech and growth stocks,which drove up overall market indices.Among the healthcare sector,pharmaceuticals,drug develo

105、pment,and pharmaceutical distribution outperformed over the past three years,with gains of 71.82%and 73.05%respectively,according to the indices defined below.Firms involved in the development of new-age drugs as well as those on the cutting edge of integrating big tech and AI into production proces

106、ses received significant investor interest.However,this interest did not extend broadly across the healthcare sector,with many traditional healthcare IT firms not experiencing the same level of investor enthusiasm.As a result,Healthcare IT has trailed behind,declining by 33.22%over the same period.C

107、hart 8:Healthcare Segment Stock Price Movement02040608010012014016018020004/01/2105/01/2106/01/2107/01/2108/01/2109/01/2110/01/2111/01/2112/01/2101/01/2202/01/2203/01/2204/01/2205/01/2206/01/2207/01/2208/01/2209/01/2210/01/2211/01/2212/01/2201/01/2302/01/2303/01/2304/01/2305/01/2306/01/2307/01/2308/

108、01/2309/01/2310/01/2311/01/2312/01/2301/01/2402/01/2403/01/24Pharmaceuticals and Drug DevelopmentHealthcare ITHealthcare EquipmentPharmaceutical DistributionHospitals and Healthcare CentersBiotechnologyTable 2:Healthcare Segment Percentage ChangesPharmaceutical Distribution:McKesson Corporation,Cenc

109、ora,Inc.,Cardinal Health,Inc.,Henry Schein,Inc.,Patterson Companies,Inc.Healthcare Equipment:Abbott Laboratories,Stryker Corporation,Intuitive Surgical,Inc.,Boston Scientific Corporation,Becton,Dickinson and CompanyHospitals and Healthcare Centres:HCA Healthcare,Inc.,Tenet Healthcare Corporation,Uni

110、versal Health Services,Inc.,Community Health Systems,Inc.,Encompass Health Corporation,Pharmaceuticals and Drug Development:Eli Lilly and Company,Johnson&Johnson,Merck&Co.,Inc.,Pfizer Inc.,Bristol-Myers Squibb CompanyHealthcare IT:Veeva Systems Inc.,MultiPlan Corporation,Evolent Health,Inc.,Teladoc

111、Health,Inc.,Certara Inc.Biotechnology:AbbVie Inc.,Amgen Inc.,Gilead Sciences,Inc.,Vertex Pharmaceuticals Incorporated,Regeneron Pharmaceuticals,Inc.PlayerQTD 1Q24YTD 2024YR/YR 2024Pharmaceuticals and Drug Development16.47%16.47%30.50%Healthcare IT0.12%0.12%3.99%Healthcare Equipment14.04%14.04%27.15%

112、Pharmaceutical Distribution9.38%9.38%32.05%Hospitals and Healthcare Centers24.79%24.79%43.27%Biotechnology2.02%2.02%14.04%73%gains in pharmaceutical distribution over the past three years20Healthcare Industry ReportHealthcare Deals in 202433%increase in$100-$500 million deals between March and April

113、 2024Chart 9:Healthcare Deals in 2024*Data as of May 21,2024Source:S&P Capital IQ$1B$500M-$1B$100M-$500M$100MUndisclosedDeal Value($B)94241866182618107838642186162.53160828818.131.96.20.005.0010.0015.0020.0025.0030.0035.00020406080100120140160JanuaryFebruaryMarchTable 3:Healthcare Deals Summary in 2

114、024*Source:S&P Capital IQ*Data as of May 21,2024Valuation SummaryTotal Deal Value($B):88 Average Deal Value:526.08 Average TEV/Revenue:11.99Average TEV/EBITDA:18.68Average Day Prior Premium:63.54%Average Week Prior Premium:64.87%Average Month Prior Premium:81.81%21Healthcare Industry Report Ashler C

115、apital acquired CarePartners Pharmacy,an Illinois-based national provider of pharmacy products and services,on January 4.Novo Holdings acquired Catalent,a New Jersey-based pharmaceuticals company through a$16.5 billion public-to-private LBO,on February 5.Stonepeak acquired Akumin,a Canadian provider

116、 of outpatient diagnostic imaging services,through a$600 million public-to-private LBO,on February 6.MedRisk,via its financial sponsors CVC Capital Partners and The Carlyle Group,acquired Medata,a California-based medical bill review software,on January 9.General Catalyst acquired Summa Health,an Oh

117、io-based nonprofit integrated healthcare delivery system,on January 17.New Habor Capital acquired Specialty Infusion Center,a Michigan-based infusion company that provides IV medication,nutrition,and hydration in the home,on January 30.Nautic Partners acquired Angels of Care Pediatric Home Health,a

118、Texas-based Provider of home health services for children and young adults,on February 9.KKR acquired Cotiviti,a Utah-based healthcare analytics company specializing in payment accuracy solutions for healthcare payers,on February 14.Calyx,via its financial sponsor CapVest Partners,acquired Invicro,a

119、 Massachusetts-based imaging and analytics software company,for$115 million on March 6.Frazier Healthcare Partners acquired RevSpring,a Tennessee-based provider of patient and consumer engagement and payment solutions on March 12.M&A activity deal value experienced a year-on-year decline from 130 bi

120、llion to 88 billionThe Healthcare sector has seen 581 deals in 2024 so far,marking a 17%year-on-year decline from 708 deals recorded during the same period in 2023The most active buyers by deal volume include The Ensign Group,Standard Bearer Healthcare,Ginkgo Bioworks Holdings,The Pennant Group,and

121、Acadia Healthcare CompanyKey Private Equity Deals22Healthcare Industry ReportTable 4:Key M&A Deals and Multiples Source:Capital IQTransaction DateTarget/IssuerTotal Transaction Value($mil)Buyers/InvestorsTotal Enterprise ValueTEV/LTM Total Revenues Target/Issuer02-05-2024Catalent,Inc.16,704.29 Novo

122、Holdings A/S14,781.9 3.59 04-05-2024Shockwave Medical,Inc.13,948.28 Johnson&Johnson 12,131.3 15.4 02-26-2024R1 RCM Inc.5,817.31 New Mountain Capital,L.L.C.;New Mountain Investments V,L.L.C.7,358.4 3.22 04-10-2024Alpine Immune Sciences,Inc.4,955.56 Vertex Pharmaceuticals Incorporated 4,160.8 73.6 02-

123、12-2024CymaBay Therapeutics,Inc.4,428.92 Gilead Sciences,Inc.-01-08-2024Axonics,Inc.3,700.59 Boston Scientific Corporation 3,144.6 8.12 01-31-2024Medicare Advantage,Cigna Supplemental Benefits and CareAllies Businesses3,300.0 Health Care Service Corporation,a Mutual Legal Reserve Company-03-25-2024I

124、LC Dover LP2,400.0 Ingersoll Rand Inc.-04-29-2024Deciphera Pharmaceuticals,Inc.2,220.07 Ono Pharmaceutical Co.,Ltd.1,928.3 11.0 01-31-2024Globalink Investment Inc.2,122.72 ALPS Global Holding Berhad69.4-01-23-2024Inhibrx,Inc.1,945.55 Aventis Inc.1,764.2-02-13-202499 Acquisition Group Inc.340.71 Nava

125、 Health MD,LLC104.8-01-16-2024Vision Sensing Acquisition Corp.277.25 Medi Forum Co.,Ltd.54.2-04-03-2024ARCA biopharma,Inc.175.0 Oruka Therapeutics,Inc.11.4-04-03-2024Asensus Surgical,Inc.105.19 KARL STORZ SE&Co.KG65.5 7.82 Key M&A Deals and MultiplesDisclaimer Pune|Hyderabad|Bengaluru|London|Zurich|

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