As companies continue to face the impact of the COVID-19 pandemic on their business, our experts keep you up to date and provide practical insights on the key developments related to your sector.
LIFE SCIENCES & HEALTHCARE: Outlook and Opportunities as seen by Tomáš Čihula, Partner, Head of Life Sciences & Healthcare, Kinstellar
1. Do you expect a decline or increase in the number of deals in the sector in 2020 / 2021?
There will be a decline this year. In particular, larger transactions will be put on hold (or have already been put on hold). On the other hand, the current situation has opened up opportunities for acquisitions, particularly in the pharma sector. From the mid-term perspective, healthcare is seen as one of the more stable sectors with good growth potential, so it is likely that many investors will focus on this sector in the future.
2. Is CEE in any way distinct from the rest of the EU?
The market for acquisitions in CEE countries differs from the more advanced EU Member States such as Germany or France. There will be fewer interesting targets with high added-value in the pharma sector for buyers (a big focus will be on R&D companies developing COVID-19 medicines). In the healthcare sector there are also less targets, but businesses are becoming more consolidated and are growing in size, which is likely to raise interest among larger investment funds.
3. Where do you see the best opportunities on the market (type of deal, sub-sector, size)?
We see opportunities in pharma and specialised healthcare services (e.g., homecare, ophthalmology, dentistry, dialysis centres, laboratories) We would expect mid-sized deals that are local rather than regional. Manufacturers of specific medical equipment might also be acquisition targets.
Some market segments may become more diverse and fragmented, as many countries are eager to have local producers so as not to be dependent on imports that might not be available in critical situations.
4. Any other relevant info?
We see a significant increase in the demand for legal advice concerning the introduction of pharma products or medical equipment used for COVID-19 treatment, including questions concerning clinical trials or the prescription of products before their actual registration.
Digital health is another area where we expect an increased demand for legal advice.
Financing of healthcare services (particularly hospitals) will need to undergo changes in many countries. Many hospitals and other healthcare providers are in financial difficulties due to COVID-19. This may scare off investors and may even cause many private operators to be nationalised. This will very much depend on how individual countries deal with the financing problem in the next months.
Various authorities (including competition authorities) have launched investigations into the pricing and distribution of healthcare products during the pandemic, and stakeholders can expect follow-up actions in this regard.
Originally published 28 May, 2020
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