healthtech heartbeat · ev / cy revenue median 13.9 x 10.0x 11.0x 12.0x 13.0x 14.0x 15.0x 16.0x...
TRANSCRIPT
HEALTHTECH
HEARTBEAT
Q2 2018 MARKET REVIEW
2
SECTOR-LED SPECIALISTS IN M&A AND FUNDRAISING
Years ofRI DEALS 3 Sectors
Deals inPast 2 Years
25+ 30+
50 People
15 Nationalities 3 Offices 1,000+ Buyers& Investors
100%Referenceable
3
HEALTHTECH HIGHLIGHTS Q2 2018
Welcome to the Q2 2018 edition of the HealthTech Heartbeat – Results International’s quarterly market update of the HealthTech
segment covering both Biopharma and Healthcare IT.
Highlights in the quarter include:
• An 11.8% increase in the Results International HealthTech indices over the last three month, led by Biopharma IT and US
Healthcare IT, demonstrating the premium on innovative technology:
o Four US HealthTech stocks exceeded 40% increases in share price quarter-to-quarter, including Teladoc and Tabula Rasa
who have both experienced consistent share price growth since IPO and currently trade at 7.4x and 10.5x revenue
respectively
• High-profile Private Equity funds investing heavily and proving to be more than a match for their trade counterparts, most
notably Veritas Capital Fund Management acquired the Value-Based Care Division of GE Healthcare for $1.1bn in cash
• Medidata Solutions acquiring SHYFT Analytics, a US-based life science data analytics firm, for $195m, following their
commercial partnership in 2016. The acquisition strengthens Medidata’s ability to analyse clinical, real-world and commercial
data, and post market announcement Medidata secured a 6% uplift in its share price
• The HealthTech fundraising and IPO market remains active; UK-based Benevolent AI, achieved a further investment of $115m
to continue developing its core “AI brain”, in a move that strengthens the company’s opportunity to disrupt the pharma
industry and there are continued rumours of a return to the public market for Change Healthcare, which was taken private by
Blackstone in 2011 for $3bn
M&A activity in the sector remains healthy and fundraising appetite strong. As a result, now is a good time to be contemplating
fundraising, exit or growth through acquisition in the HealthTech space – if you are, please do get in touch.
4
RI GLOBAL HEALTHTECH INDICES
70
80
90
100
110
120
130
140
Jun 17 Jul 17 Aug 17 Sep 17 Oct 17 Nov 17 Dec 17 Jan 18 Feb 18 Mar 18 Apr 18 May 18
Healthcare IT - Europe Healthcare IT - US Biopharma IT Generalists NASDAQ Comp FTSE 100
(1) Excludes GeneralistsNotes: Based on share prices as at 30th June 2018; indices weighted by market capitalisation; Healthcare IT – US excl. McKesson because the majority of its rev. is generated from pharmaceutical distributionSources: Capital IQ and Results analysis
LAST
12
MO
NTH
SH
AR
E P
RIC
E P
ER
FO
RM
AN
CE (
%)
Q2 2018 PERFORMANCE
Biopharma IT 13.5%
Generalists 3.1%
Healthcare IT - US 13.1%
Healthcare IT - Europe (2.6%)
HealthTech(1) 11.8%
(0.2%)
2.5%
(0.4%)
22.3%
17.7%
4.4%
Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jun-18Apr-18 May-18Jan-18 Feb-18 Mar-18
5
HEALTHTECH: SHARE PRICE PERFORMANCE
(10.8%)
10.5%
(3.4%)
65.3%
(18.9%) (10.0%) (6.0%)
13.2% 13.3%
(24.5%)
0.3%
(17.0%)
3.8%
(21.7%)
67.3%
2.4%
324.1%
25.4%3.0%
49.6%
(50.0%)
0.0%
50.0%
100.0%
150.0%
200.0%
250.0%
300.0%
350.0%
0.3%
(10.4%)
9.6%
20.3%
(5.3%)
3.1%
(2.8%)
11.3%
42.9%
(6.4%)
12.7%
47.7%
10.0% 8.5%
44.0%
16.4%
64.5%
5.3%
28.3%
19.5%
(20.0%)
(10.0%)
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
Note: Based on share prices as at 30th June 2018Sources: Capital IQ and Results analysis
LAST
12
MO
NTH
SQ
2 2
01
8
HEALTHCARE IT - EUROPE HEALTHCARE IT - US BIOPHARMA IT
6
HEALTHTECH: SELECTED STOCKS – PERFORMANCE SINCE IPO
Note: Calendarised to December year end; $ millions, except share price data; multiples capped at 20x EV / Revenue and 50x EV / EBITDASource: Capital IQ
COMPANYIPO
DATEDESCRIPTION
RAISED
($M)INDICATIVE
PRICE RANGE ($)
IPO LISTING
PRICE ($)
INCREASE
VS. RANGE
DAY 1
INCREASE
CURRENT
INCREASE(1)
EV ($M)EV /
REVENUE
EV /
EBITDA
IPO CURRENT IPO CURRENT IPO CURRENT
Nasdaq
Sep-16Medication regimen
optimisation software52 13.00-15.00 12.00 (14.3%) 24.0% 431.9% 237 1,432 2.7x 7.4x 19.7x 48.3x
Nasdaq
Jun-16
Data analytics platform and
diagnostics for precision
medicine
91 12.50-15.50 14.00 0.0% 32.8% (76.4%) 1,732 510 11.4x 5.2x n.m. n.m.(2)
NYSE
Jun-15Video telehealth platform for
medical consultations157 15.00-17.00 19.00 18.8% 50% 205.5% 693 4,127 9.7x 10.5x n.m. n.m.(3)
NYSE
Jun-15Healthcare delivery and
payments software 196 14.00-16.00 17.00 13.3% 10.9% 23.8% 486 1,681 3.1x 2.9x n.m. n.m.(4)
Nasdaq
Feb-15Cloud-based healthcare data
analytics software600 24.00-26.00 27.00 8.0% 0.0% (63.2%) 3,474 1,316 8.0x 2.3x 23.4x 8.2x
NYSE
Mar-14Healthcare enterprise
management software 178 13.00-15.00 16.00 14.3% 148.8% (73.4%) 1,333 553 n.m. 3.6x n.m. n.m.(5)
NYSE
Oct-13Cloud-based CRM software
for the biopharma industry 261 16.00-18.00 20.00 17.6% 85.8% 284.3% 2,218 11,338 11.3x 13.9x n.m 42.3x
(1) Current increase from IPO price; market data as of 30th June 2018(2) NantHealth projecting negative EBITDA for CY2018; was not profitable in year of IPO(3) Teladoc multiples capped at 50x EV / EBITDA; was not profitable in year of IPO(4) Evolent Health multiples capped at 50x EV / EBITDA; was not profitable in year of IPO(5) Castlight projecting negative EBITDA for CY2018; was not profitable in year of IPO
7
HEALTHTECH: PUBLIC COMPANY VALUATION BENCHMARKS
REVENUE GROWTH (2018-19E) EV / REVENUE 2018E
EBITDA MARGIN 2018E EV / EBITDA 2018E
6.2%
4.2%
11.9%
17.8%
10.1%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
Generalists Healthcare IT
- Europe
Healthcare IT
- US
Biopharma IT HealthTech
33.3%
27.2%
16.2%
24.2%
18.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
Generalists Healthcare IT
- Europe
Healthcare IT
- US
Biopharma IT HealthTech
4.9 x
3.4 x 3.3 x
7.4 x
3.5 x
0.0 x
1.0 x
2.0 x
3.0 x
4.0 x
5.0 x
6.0 x
7.0 x
8.0 x
Generalists Healthcare IT
- Europe
Healthcare IT
- US
Biopharma IT HealthTech
17.0 x
12.6 x14.4 x
30.4 x
13.9 x
0.0 x
5.0 x
10.0 x
15.0 x
20.0 x
25.0 x
30.0 x
35.0 x
Generalists Healthcare IT
- Europe
Healthcare IT
- US
Biopharma IT HealthTech
Notes: EV = Enterprise Value; financials calendarised to December year end; median values reported; McKesson excl. from above analysis because majority of rev. is generated from pharmaceutical distribution See Selected Publicly Traded Companies (slide 12) for details of companies included in each category; HealthTech excludes GeneralistsSource: Capital IQ
8
HEALTHTECH: PUBLIC COMPANY VALUATION PERFORMANCE
OVER TIME
3.5 x
2.0x
2.5x
3.0x
3.5x
4.0x
4.5x
EV / CY Revenue
Median
13.9 x
10.0x
11.0x
12.0x
13.0x
14.0x
15.0x
16.0x
17.0x
EV / CY EBITDA
Median
LTM Q2 2018
% CHANGE
Median (5.3%) (2.1%)
LTM Q2 2018
% CHANGE
Median (4.3%) (0.0%)
Notes: EV = Enterprise Value; financials calendarised to December year end, which can impact the multiples at the start of each year as the base is shifted forward; weekly tracking of valuation multiples commenced in July 2015, October 2014 – June 2015 tracked on a quarterly basis, therefore a linear progression has been assumed between quarters up to July 2015Source: Capital IQ
15
19(1)
(1)
(1) Number of companies with applicable multiples in Q2 2018 index
Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18
Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18
9
HEALTHTECH: GLOBAL M&A ACTIVITY Q1 2012 – Q2 2018
Sources: Press releases, Capital IQ, Mergermarket, 451 Research and Results analysis
NU
MB
ER
OF D
EA
LSTO
TAL D
ISC
LSO
ED
DEA
L VA
LUE ($
M)
21
17
20
32
29
18
28 27 28
32
44
61
54
49
70
56 56
63 62
39
43
5654
48
57
47
4
3
5
1
1
7
2
7 5
6
2
8
12
5
5
2
11
8
6
7
8
11
9
7
7
7
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
0
10
20
30
40
50
60
70
80
Q1
2012
Q2
2012
Q3
2012
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Q2
2014
Q3
2014
Q4
2014
Q1
2015
Q2
2015
Q3
2015
Q4
2015
Q1
2016
Q2
2016
Q3
2016
Q4
2016
Q1
2017
Q2
2017
Q3
2017
Q4
2017
Q1
2018
Q2
2018
Healthcare IT Biopharma IT Healthcare IT Total Disclosed Deal Value Biopharma IT Total Disclosed Deal Value
10
HEALTHTECH: SELECTED DEALS IN Q2 2018
DATE BUYER TARGET EV ($M)EV/ (1)
REVENUEEV/EBITDA COMPANY DESCRIPTION
TARGET
LOCATION
Jun-18 352.0 5.6x n.m. Virtual care provision
Jun-18 - - - Healthcare analytics and population health management solutions
Jun-18 195.0 7.8x(2) - Data management and analytics
Jun-18 - - - Pharmaceutical risk analysis
Jun-18 - - - Compliance and quality assurance
Jun-18 - - - Obstetric and gynecological data management
May-18 - - - Patient management and workforce optimisation
May-18 - - - Electronic patient record and hospital administration
May-18 - - - Data analysis acceleration solutions
May-18 - - - Patient care management
May-18(Assets)
13.0 - - Healthcare insurance claim management
May-18 60.0 - - Personalised patient engagement solution
Apr-18 - - - Data analysis and cleaning
Apr-18 - - - Patient safety
Apr-18 - - -Workforce optimisation software for the healthcare defense and maritime
industries
Apr-18 9.7 2.9x 20.3x(3)
Cloud-based medical record system
Apr-18 9.0 1.9x 8.7x Healthcare document and process management
Apr-18(Value-Based Care Division)
1,050.0 - - Revenue-cycle, ambulatory care and workforce management
(1) In certain cases EV/Revenue are publicly reported estimates; TTM financials have been used where possible; EV = transaction value scaled to 100% shareholding plus net debt (incl. minority interest)
(2) Calculated off projected revenue run rate of $25m for CY18(3) Multiple calculated based on EBITSources: Press releases, Capital IQ, Mergermarket, 451 Research and Results analysis
11
HEALTHTECH: SELECTED FUNDRAISINGS IN Q2 2018DATE COMPANY TYPE OF ROUND
FUNDSRAISED ($M)
INVESTOR PARTICIPATION COMPANY DESCRIPTIONCOMPANYLOCATION
Jun-18 Venture 3.2 Albion Capital Group Data capture and patient engagement
Jun-18 - 36.0 Kinnevik; Founders Fund; Thrive Capital; Lakestar Advisors; Sound Ventures Patient financial management
Jun-18 Series B 62.5 Accel Partners; Creandum; Index Ventures; Project A VenturesOnline medical advice and care services provision platform
Jun-18 Growth 60.0 Mainsail Partners Compliance and patient security
Jun-18 Series C 30.0Johnson & Johnson Innovation; NVIDIA Corporation; Aurum Ventures MKI; Intermountain Healthcare; Khosla Ventures; OurCrowd; Dolby Family Ventures; aMoon Partners
AI radiology analytics
May-18 Series D 60.0Vulcan Capital; Volition Capital; Goldman Sachs; First Mark; F-Prime Capital Partners
Pharmaceutical supply chain compliance
May-18 Series B 21.0 Polaris Partners; General Catalyst Partners; 7wire Ventures Healthcare data analytics
May-18 Series A 13.4Neptune Investment Management; Tanarra Capital Australia; GT Healthcare Capital Partners; Oxford Sciences Innovation; Rohit Thakur Consulting
Coronary heart disease diagnosis
May-18 - 500.0 AIA Company; NWS Holdings; China Capital Zhongcai Fund Management Hospital appointment registration
May-18 . Series C 55.0Temasek Holdings; Baillie Gifford & Co.; Amgen Ventures; Merck Ventures; Canepa Healthcare; Jazz Venture Partners; Brooklands Capital Strategies
Interactive medical information platform
May-18 Series B 16.8 Benchmark; Aspect Ventures; Greylock Partners Doctor appointment booking system
May-18 Growth 37.6 JMI Equity Patient engagement software
Apr-18 - 115.0 Woodford Investment Management AI biomedical information analytics
Apr-18 Series C 74.0
VR Adviser; Qualcomm Ventures; Goldman Sachs Asset Management; Shasta Ventures; Tenaya Capital; Lerer Hippeau Ventures; Sherpa Ventures; Wil; Blue Cloud Ventures; Princeville Global; Ridgeview Asset Management Partners
Online medical consultation software platform
Apr-18 Series B 36.4 New Enterprise Associates; Flare Capital Management Company; Amgen Ventures; Lakestar Advisors; Oxeon Ventures
Biopharma data analytics
Apr-18 Series E 105.0
Draper Fisher Jurvetson; Kleiner Perkins Caufield & Byers; Sapphire Ventures; General Catalyst Partners; Kinnevik; Merck Global Health Innovation Fund; 7wire Ventures; M12; Zaffre Investment; Echo Health Ventures
Diabetes management solution
Apr-18 Series B 33.5 Canaan Partners; Draper Fisher Jurvetson; Casdin Capital; GE Ventures; Section 32; LifeForce Capital
Cell and gene therapy chain management software
Apr-18 Venture 9.9Boehringer Ingelheim, Investment Arm; Oxford University Innovation; Parkwalk Advisors Ltd; Chimera Partners
Neurological and cerebrovascular imaging platform
Sources: Press releases, Capital IQ and Results analysis
12
HEALTHTECH: SELECTED PUBLICLY TRADED COMPANIESOPERATING METRICS VALUATION METRICS
PRICE % OF 52 MARKET TOTAL NET ENTERPRISE REVENUE REV. GROWTH GROSS MARGIN REVENUE EBITDA
COMPANY (30-JUN-18) WEEK HIGH CAP CASH DEBT VALUE CY2018 CY18-19 HISTORICAL CY2018 CY2019 CY2018 CY2019 CY2018 CY2019
GENERALISTS WITH SIGNIFICANT HEALTHTECH EXPOSURE
HEALTHCARE IT - EUROPE
EBITDA MARGIN
HEALTHCARE IT - US
BIOPHARMA IT
(1) McKesson excluded from ‘Healthcare IT – US’ summary analysis above because majority of revenue is generated from pharmaceutical distributionNote: Calendarised to December year end; $ millions, except share price data; multiples capped at 20x EV / Revenue and 50x EV / EBITDA; net debt includes minority interest Source: Capital IQ
(1)
HealthTech (excludes Generalists)
13
THE TECH REPORT: SUBSECTORS
In addition to this summary, we produce separate quarterly reports that focus specifically on; Digital Services (Digital Horizon),
Enterprise Software (Enterprise Stack), Cybersecurity (CyberScope) and Marketing Technology (MarTech Barometer). You can find
these reports on our website or by clicking on the icons below. Alternatively, you can contact one of our team members on the
details overleaf.
HEALTHTECH HEARTBEAT
CYBERSCOPE MARTECH BAROMETER
DIGITAL
HORIZONENTERPRISE
STACK
14
GET IN TOUCH
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