German M&A Industry Trends in Health Industries: 2022 Outlook

Mergers and acquisitions (M&A) activity and valuations in health industries remain high with no signs of a slowdown in 2022.

Pharmaceuticals and life sciences (PLS) and healthcare services (HCS) continued to attract high levels of investor interest throughout 2021, led by innovations in biotechnology and patient services. Capability-driven deals have increased in relevance for many companies, including deals that provide access to new technologies such as mRNA and gene therapy. Looking ahead, we expect that an abundant availability of capital will continue to fuel M&A activity and valuations over the next year.

Competition between large pharma companies and institutional investors — venture capital (VC), initial public offerings (IPOs), etc. — remains high, particularly for medium-sized biotech platforms. As we anticipated in our mid-year update, traditional pharma companies are optimising their portfolios by divesting non-core assets in order to free up capital to invest in innovation and address portfolio gaps.

As multiples continue to increase, buyers need to define their post-deal value capture-and-creation plans. Companies with well-crafted long-term plans will be able to unlock value in the current market, while those that take a hands-off approach may struggle to earn the desired return on investment.


We expect the following areas to be M&A activity hotspots during the next six to 12 months:

Pharmaceuticals and life sciences

  • Traditional big pharma players seek to optimise their portfolios by divesting over-the-counter and other less innovative platforms, and continuing to target biotech companies at the frontier of science, such as cell and gene therapy or next generation therapeutics.
  • Innovative companies that can deliver efficiencies in the mRNA manufacturing process and address bottlenecks in equipment availability experienced by vaccine manufacturers will draw significant interest from investors. Further, pharma players will increasingly invest in R&D for applications of mRNA technology outside of the vaccine space (e.g. cancer treatment) or seek to acquire companies operating in the space.

Healthcare services

  • Specialty care platform roll-ups are coming to market, as investors reach the end of their desired holding period and seek to sell to the next tier of investors, which have significant dry powder to deploy.
  • Telehealth, health tech, and data and analytics companies that enable quicker, more efficient and/or virtual delivery of patient care via automation and digital solutions such as clinical decision support present value creation opportunities and are attracting investor interest.
  • Cross-border transactions will remain at elevated levels as investors continue to build regional growth platforms and/or enter new markets.


Consumerisation of healthcare

We expect to see a rise in consumer healthcare groups in 2022, following plans announced by Novartis, GlaxoSmithKline, Johnson & Johnson, and Sanofi to spin off their consumer healthcare businesses into separately listed companies. Armed with direct-to-consumer expertise, these spin-offs have the potential to unleash growth in consumer healthcare brands by rewriting the sector’s marketing playbook. Operating as standalone businesses, they also have the potential to become significant M&A players in their own right.

Business model disruption and digitalisation

To unlock value, operators need to embrace digitisation and accelerate the adoption of digitalised practice management and digital solutions that put patients at the centre of the patient care journey. Staffing challenges, exacerbated by the pandemic, put further pressure on healthcare providers to find digital efficiencies to help bridge the gap left by a shortage of skilled employees.

Healthcare services consolidation and resale

Across the healthcare deals landscape, we see continued consolidation of private clinics and specialist care providers, such as skilled nursing or elderly care/assisted living facilities, which remain fragmented across different markets, as well as more focus on productivity improvements across health systems. Cross-border expansion through M&A will continue, creating healthcare platforms rather than country-by-country plays. Further, roll-ups that occurred over the last several years are coming to market, as investors reach the end of their holding period.

Capital allocation and portfolio optimization

We expect large pharma companies will continue to seek to divest over-the-counter platforms and other non-core assets, while seeking to fill their midterm pipelines with medium-sized biotech deals. We also anticipate further M&A activity to address vulnerabilities around active pharmaceutical ingredients (API) sourcing, with some investors setting up API platforms, enabling pharmaceutical companies to divest manufacturing sites in an effort to adopt a more asset-light strategy.

After COVID-19, new applications for mRNA

The success of mRNA COVID vaccines accelerated the widespread adoption of this technology. Vaccine providers — e.g. German companies such as BioNTech — will now look to expand into other areas. Development of mRNA vaccines for other diseases (e.g., influenza, shingles, HIV) is already underway, and researchers are working on mRNA vaccines for cancer. The potential for a massive increase in demand will turn companies that can innovate to ease manufacturing bottlenecks into attractive M&A targets.

“We expect deal activity to remain high in 2022, as companies look to optimise their portfolios for growth. Innovative biotech and med device companies will continue to be attractive M&A targets.”

Tobias Klimpe,Global Health Industries Deals Leader at PwC Germany
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