Healthcare Markets & Deal Roundup — Edition 4 [Q1 FY’24]
April — June 2024 Key Highlights
The last 3 months have seen moderate deal activity with key transactions of note in Pharmaceuticals and Medical Devices.
The total deal value across Lifesciences, Healthcare Delivery, Devices and other Healthcare sub-sectors exceeded US $1.7 Billion amidst the ongoing funding winter showing the resilience of the healthcare sector.
Pharmaceuticals
The last 3 months have seen significant deal activity in the pharmaceutical sector. Formulations has seen the highest activity with interest picking up in the injectables space — specifically the USA market focused injectable companies. API continues to remain a key area of investor interest with 2 large transactions of note.
With the US government set to de-couple Big Pharma from Top Chinese CDMOs though the Biosecure Act, we expect significant growth in the Indian CDMO sector in the years to come.
Deal value from April — June 2024 exceeds $400 Mn across API and FormulationsDrug discovery has seen interest with a sizeable follow-on primary funding >$50Mn
Public Markets — A Snapshot
Listed Market Multiples
Private Markets — A Primer
Deal Round Up
1. Tata Capital Healthcare Fund has invested $20Mn in Orbicular Pharmaceutical Technologies for an undisclosed Equity stake. Orbicular focuses on the specialty generics space and has a robust pipeline of niche formulations. This capital will be utilized to strengthen the product pipeline that will enable them to cater to a lucrative market of $60Bn
2. Suven Pharma acquired a majority stake in Sapala Organics for a total consideration of 229 Crores. Post FY’26, Suven intends to purchase the remaining shares to reach 100% ownership. Sapala specializes in the production of nucleic acid building blocks and oligonucleotide drugs including nucleosides. Dr. P Yella Reddy will maintain his role as the CEO as Sapala becomes a part of the Suven + PE backed Cohance Platform. This acquisition bolsters Suven’s capabilities and will enable them to cater to a rapidly growing nucleic acid based therapy market
3. Kotak has invested 1445 Cr through Matrix Labs to acquire Viatris’s API division. This move would enable Matrix to consolidate its leadership position in the API business by strengthening its 3rd party sales and allow it to M&A in the CDMO space. This makes Matrix India’s 2nd largest API player
4. Jagsonpal Pharmaceuticals acquired the India and Bhutan Business of Yash Pharma will help significantly improve Jagsonpal’s market presence. The acquisition entails a strong portfolio of 33 dermatology and paediatric brands. It diversifies product offering and also offers significant opportunity for creation of synergies
5. Cipla’s UK subsidiary would invest EUR 3Mn into Ethris, a German R&D company with a focus on delivery of mRNA therapeutics directly through the respiratory route. With it’s proprietary mRNA platform technology, Ethris and Cipla are working to fast-track innovative mRNA treatments. Ethris specializes in delivering stabilized mRNAs directly through optimized formulation and nebulization technologies
6. Enveda raised $55Mn in its series B2 round from multiple investors including Microsoft, Premji Invest, Lingotto Investment Fund, Level Ventures, Jazz Venture Partners among others. Enveda leverages Artificial Intelligence to accelerate the drug discovery process with a focus on analyzing plant chemistry to unearth potential medicines. Enveda has a database of 38,000 medicinal plants and 12,000 diseases and symptoms
7. Maiva Pharma, Bengaluru based pure-play injectables CDMO has raised 1000 Cr in primary capital infusion from InvAscent PE and Morgan Stanley PE with both investing almost equally. The combined stake held by the funds will be >60%. Maiva pharma is a pureplay injectables CDMO catering to the USA market which has shown strong revenue growth and significant scaling in capacity. The company plans to utilize the funds to expand its manufacturing capacity with capabilities that include pre-filled syringes, bags, oncology and hormonal injectables
8. Ahmedabad based La Renon Healthcare has raised $70Mn from Chrys Capital at a valuation of about $800Mn. This is a secondary sale of shares by the promoter group. La Renon focuses on the manufacturing and marketing of domestic formulations, and it has key presence in Nephrology, CNS, Critical Care and Gastro Therapeutic areas with 4 manufacturing facilities including 2 API units
Hospitals
Deal value exceeds $300Mn with large M&A deals closing in Q1 FY’24 which is a ~50% increase over Q4 FY’23 but with decrease in total number of dealsThis quarter has been marked by increase PE activity with large bets on both Multi and Single Specialty Hospitals
Public Markets — A Snapshot
Listed Market Multiples
Private Markets — A Primer
Deal Round Up
1. Chrys capital has invested $100Mn into Center For Sight, a leading eye care chain based out of New Delhi in a mix of primary and secondary infusion. Chrys Capital has bought out Mahindra & Mahindra’s stake in the chain. CFS is among the top 3 organized eye care chains in India with a strong position in the North and an annual footfall of ~1.5Mn patients. This investment will be used to fuel the chain’s growth in both Tier-1 & Tier-2 towns in India
2. Hyderabad based Omega Hospitals has raised 500 Crores from Morgan Stanley PE Asia for a stake of 23%. The funding will be utilized to expand the Chain’s footprint from existing 10 hospitals with ~1400 beds to expand and emerge as India’s largest oncology player. This growth will include both organic and inorganic expansion strategies
3. Kerala based IVF chain, Sabine Hospitals has raised $50Mn from CX Partners and a consortium of investors. Sabine offers services in infertility, Assisted Reproductive Technology, gynaecology, neonatology, pediatrics, general surgery among others. The hospital currently has 300 beds including 60 NICU beds, performs 6000 deliveries every year along with 3000 IVF cycles and will utilize the funds to fuel its next phase of growth
4. Singapore based Quadria Capital has invested $102Mn in Nephroplus for a significant minority stake. Nephroplus operates in large, high-growing markets across Asia with dominant leadership position in India. The capital will be used to fund the company’s growth and expansion plans
Other Healthcare
Q1 FY’24 has seen high higher fundraising activity as compared to the previous quarter with more interest and investments by PE players instead of VCMedical Devices and Services are the key sub-sectors that have seen deal activity
Deal Round Up
1. Jashvik capital invested $25Mn in Bengaluru based Futura Surgicare which is a medical products, consumables and devices manufacturer. Futura is an established player in this segment with a global presence with product sales in 70+ countries globally and a reach of 10,000+ hospitals in India. Futura will utilize this capital to build more innovative devices across specialty areas and drive both organic and inorganic growth strategies
2. Cloudphysician has raised $10.5Mn funding from Peak XV partners (Formerly Sequoia) and Elevar Equity in equity funding. Cloudphysician is an online healthcare solution — a clinically designed framework which helps generate insights that clinical decisions and improves patient outcomes. The funding will be utilized to strengthen the AI platform, strengthen the position in India and enter into other geographies
3. Alvye health, a health-tech platform has raised $5.5Mn from Axilor Ventures and 1Crowd Fund. Alvye integrates with Payers, intermediaries and providers to offer tailored and customizable healthcare services with >1.1Mn users. The funding will be utilized to expand the team and invest in technology and product enhancement.
4. Biorad has raised 400 Cr from Kotak Special Situations Fund. Biorad manufactures orthopaedic implants for knee and hip and surgical and consumables focused on urology, gastroenterology and neuro-vascular intervention through its manufacturing facilities at Pune & Bengaluru. This capital will help service debt obligations and also help with Working capital requirements
5. Red Health has raised $20Mn in its series B funding in a mix of equity and debt from Jungle Ventures, Alteria Capital, Health Quad and HealthX Capital. Red Health works with Hospital networks to provide them with a fleet of ambulance vehicles as well as manpower and technology to run operations. The company will use the funding for product innovation, advance technology, minimize human error and optimize response time.
6. Infinx has raised $150Mn from KKR in a significant minority deal. Infinx is a healthcare revenue cycle solutions provider and will utilize this funding along with KKR’s network to expand the company’s network, accelerate growth and support bolt-on acquisitions
7. KKR has acquired Healthium Medtech from Apax Partners in a 7000 Cr deal. Healthium medtech is a leading medical devices company and is the 4th largest surgical suture manufacturer globally. KKR will leverage its global healthcare network and expertise to accelerate growth and scale the business through organic and inorganic growth strategies
8. Zeno health, a leading omni channel pharmacy has acquired Kolkata based Tablt pharmacy to expand its network in East India — more specifically in semi-urban an rural parts of Bengal, Odisha, Bihar and Jharkhand. The plan is to increase the number of franchises to 1000 over the next 5 years that is in line with Zeno’s mission to help democratize healthcare around India
9. Mave Health, a mental health-tech startup based in Bengaluru has raised $0.8Mn in Seed funding from iSeed Fund. Mave has developed a wearable device, Arc that is aimed at treating depression through Non-Invasive Brain Stimulation technology. They will utilize the funding to accelerate the product launch and commercialization journey
10. Medulance, an emergency services provider has raised $3Mn from Alkemi growth capital with participation from Dexter Capital, Namita Thapar and Aman Gupta. Medulance provides holistic services from emergency services to 5G medical clinics and will utilize the capital to scale it’s presence across India and to improve the technology
