The covid pandemic has shone a spotlight on the importance of the healthcare sector. Whether it is the partnerships needed to develop vaccines or the remarkable strides made by telemedicine, there’s a growing appreciation that the health sector represents a dynamic source of deal opportunities for investors.
With private equity interest in the sector running at an all-time high, this seemed like the perfect chance to hone in on the buyout opportunities and ask where the investor challenges lie via an A-Z of Healthcare.
But what should each letter denote? Cue some spirited debate in the PEI (virtual) office. Some of the letter choices were more obvious than others: no surprise for guessing that C stands for covid or P for pharmaceuticals. But the pandemic has also forced us to appreciate the importance of collaboration and innovation, so it’s entirely appropriate that R denotes R&D and T represents tie-ups.
The A-Z also illustrates other trends such as the growing importance of K for KOLs, or key opinion leaders, such as top scientists in framing the debate – something we’ve seen clearly in the pandemic.
But, arguably, the single most significant entry is H for healthtech in recognition of the fact the future of the healthcare market is most definitely digital.
Remote monitoring and testing really came of age in the last 18 months as did tracking the development of symptoms. That’s opening up opportunities across the full spectrum, from the way companies use technology to deliver care to the use of data and predictive analytics, says Karthic Jayaraman, partner at TPG Capital. “Looking ahead, it’s our view that value will accrue not in one platform or channel, but in the full network,” says Jayaraman.
While some see healthtech as more of a venture play, others believe the technology opportunities will scale to the point where they exhibit the sort of long-term growth characteristics seen elsewhere in the tech sector. All agree that healthcare is having its moment.
Challenges remain, of course. Some sectors such as biotech for non-covid illnesses have seen clinical trials delayed by up to a year as a result of the pandemic. And valuations remain sky-high, or “very frothy” in the words of one long-time investor in healthtech. So healthcare is definitely not a sector for the faint-hearted, but as this A-Z shows, there are plenty of investments on offer, provided you can find your niche.