M&A Defined Healthcare in 2018 -- Particularly the CVS Aetna Merger

TL;DR

2018 saw a surge in healthcare deals, with CVS acquiring Aetna for $69 billion, showing a trend towards vertical integration in the industry.

Transcript

Shannon Jones: The flip side of biotech pipeline blow-ups, the things you can expect in a given year. You can also expect deals, deals, and more deals, and 2018 did not disappoint, Todd Campbell. Todd Campbell: So many deals, Shannon! I mean, oh, my God, again, another whole show right here. We're going to crank through a few of them that were nota... Read More

Key Insights

• 🤝 CVS-Aetna and Cigna-Express Scripts deals reflect a trend towards vertical integration in healthcare.
• 💇 Vertical integration aims to cut middlemen costs and increase efficiency in the industry.
• 🙈 2018 saw a plethora of significant healthcare deals, including private equity acquisitions and biotech licensing fees.

Questions & Answers

Q: What is the significance of CVS acquiring Aetna for $69 billion?

The CVS-Aetna deal transforms CVS into a healthcare conglomerate, integrating insurer, pharmacy benefit manager, and healthcare provider, showcasing the trend towards vertical integration to cut costs and increase margins.

Q: How did the trend of vertical integration play out in other healthcare deals in 2018?

Other notable deals like Cigna-Express Scripts, private equity's acquisition of Athenahealth, and Roche's purchase of Foundation Medicine all aimed at cutting out middlemen, increasing efficiency and expanding services in the industry.

Q: What was unique about Bristol Myers Squibb's deal with Nektar's NKTR-214T?

Bristol Myers Squibb paid a record $1 billion for the biotech licensing fee, showing the value and importance of innovative combination approaches in healthcare deals.

Summary & Key Takeaways

• Healthcare deals surged in 2018, with $3.3 trillion worth of deals in the first nine months, 40% in the U.S.

• Notable deals include CVS-Aetna ($69B) and Cigna-Express Scripts ($67B), highlighting vertical integration in the industry.

• Other significant deals include private equity taking Athenahealth private, Roche acquiring Foundation Medicine, among others.