Healthcare Markets & Deal Roundup — Edition 5 [Q2 FY’25]

July — August 2024 Key Highlights [Q2 FY’24]

Q2 of FY’25 has seen significant deal activity with key transactions of note across Pharmaceuticals, Healthcare Delivery, and Health Tech sectors.

The total deal value across Lifesciences, Healthcare Delivery, Devices, and other Healthcare sub-sectors exceeded US $900 Million, showing continued robust investor interest in the healthcare sector despite the ongoing funding winter.

Pharmaceuticals

The pharmaceutical sector has witnessed notable deal activity in Q2 FY’24, with transactions spanning across various segments including nutraceuticals, API manufacturing, and innovative drug development.

Deal value from July — September 2024 exceeds $300 Mn across various pharmaceutical segments, indicating sustained investor confidence in the sector’s growth potentialSignificant interest in nutraceuticals and wellness products, as evidenced by the $90 million investment in HealthKart. This trend reflects the growing consumer focus on preventive healthcare and wellness, particularly in the post-pandemic eraContinued support for innovative drug discovery startups, exemplified by the $5 million funding for Ahammune Biosciences, underscores the industry’s commitment to developing novel treatments for unmet medical needsIncreasing focus on cutting-edge biotechnologies, as seen in Natco Pharma’s investment in eGenesis for xenotransplantation, indicates a shift towards more advanced and potentially disruptive healthcare solutions

Public Markets — A Snapshot

Private Markets — A Primer

Deal Round Up

1. ChrysCapital is set to acquire about 20% stake in Bright Lifecare (HealthKart) for approximately $90 million, valuing the business at around $450 million (₹3,700 crore). HealthKart is India’s largest nutrition platform, offering supplements and nutraceuticals through in-house brands such as MuscleBlaze, TrueBasics, and HK Vitals. The company reported a 70% year-on-year rise in operating revenue to ₹832 crore during FY’23

2. Zydus Lifesciences Ltd will acquire Sterling Biotech for Rs 84 crore. The acquisition includes a production facility at Masa in Gujarat and a portfolio of fermentation-based API products like Lovastatin, Daunorubicin, Doxorubicin, and Epirubicin. This strategic move aims to strengthen Zydus’s fermentation-based API business, leveraging the high-entry barriers and attractive margin profile of this segment

3. Ahammune Biosciences raised $5 Mn (about INR 41 Cr) in its Series A round led by pi Ventures, with participation from Capital2B, Colossa Ventures, and others. Founded in 2016, Ahammune is developing a novel small molecule drug for vitiligo treatment. The funds will be used for the second phase of human clinical trials, expanding the patent portfolio, and advancing R&D efforts for other immune-mediated skin diseases

4. Natco Pharma invested in eGenesis, Inc., a company pioneering xenotransplantation technology. eGenesis is developing safe and effective transplantable organs to address the global organ shortage. In March 2024, eGenesis announced the world’s first porcine kidney transplant in a living patient, authorized by the US FDA under the Expanded Access pathway.

5. ChrysCapital exited Eris Lifesciences by selling its entire 7.27% stake for Rs 1,187 crore via an open market transaction. Eris Lifesciences is a leading player in the domestic branded formulations market. The shares were sold at an average price of Rs 1,201 apiece, with Infinity Partners picking up the share

6. Sun Pharmaceutical Industries entered into an agreement with Pharmazz Inc. to acquire more than a 5% stake for an aggregate investment of up to $15 million. Sun Pharma will also receive exclusive rights to license Sovateltide for marketing and distribution in certain Emerging Market countries

7. Platinum Equity acquired a majority stake in Inventia Healthcare, a Mumbai-based pharmaceuticals company, at a valuation of Rs 2,500 crore ($300 million). This marks Platinum Equity’s debut in India, showcasing growing international interest in the Indian pharma sector

Hospitals

Deal value exceeds $300Mn with large M&A deals closing in Q2 FY’24, reflecting strong investor appetite for established healthcare delivery modelsSignificant investments in tertiary care facilities, such as the $257 million deal for Baby Memorial Hospital, highlight the growing demand for advanced medical services in tier-2 and tier-3 citiesContinued expansion of established healthcare chains, as seen with Apollo Health And Lifestyle’s funding, indicates a push towards creating standardized, pan-India healthcare delivery networks

Public Markets — A Snapshot

Private Markets — A Primer

Deal Round Up

1. Baby Memorial Hospital Limited raised ₹2,133 Cr from KKR India Private Equity for a 58.50% stake, valuing the company at ₹3,646 Cr. Baby Memorial Hospital is a tertiary care referral hospital in Kerala with 860 beds and over 35 Medical and Surgical departments. The hospital features 21 world-class operation theaters, 18 fully equipped ICUs, and a 24-hour Accident & Emergency care unit. It’s also recognized by The National Board of Examinations for DNB courses in various specialties

2. Apollo Health And Lifestyle Limited (AHLL) secured ₹149 Cr through a mix of primary funding and strategic investment from Apollo Hospitals Enterprise Limited, International Finance Corporation, and Anupam Sibal. AHLL, a wholly owned subsidiary of Apollo Hospitals Enterprise Limited, operates the largest chain of standardized primary healthcare models in India and the Middle East. This includes multispecialty clinics (Apollo Clinics), diabetes management clinics (Apollo Sugar), and diagnostic centers (Apollo Diagnostics)

3. A4 Hospitals, a Tamil Nadu-based IVF healthcare provider, raised growth capital funding from 360 ONE Asset’s healthcare and life sciences-focused private equity fund. Led by Dr. Aruna Ashok, a fertility specialist with 18 years of experience, A4 Hospitals covers the entire fertility journey, from IVF treatments to maternity and perinatal care. The funds will be used to expand operations across southern India, aiming to redefine standards in fertility care

4. Unaprime acquired a 70% stake in Lokmanya Hospitals for Rs 140 crore, buying out Tata Healthcare Fund’s 43.5% stake and shares from other existing investors. Lokmanya Hospitals has five hospitals in Maharashtra with a current capacity of 300 beds, planning to expand to 500 beds

Other Healthcare

Q2 FY’24 has seen higher fundraising activity compared to the previous quarter with more interest and investments by PE players instead of VCMedical Devices, Health Tech, and Biotech are the key sub-sectors that have seen deal activity

Deal Round Up

1. Redcliffe Lifetech Private Limited (Redcliff Labs) raised $42 Mn in Series C funding from Investment Fund For Developing Countries (IFU), Spark Growth Ventures, LeapFrog Investments, and HealthQuad. The deal values the company at ~$353 Mn. Redcliffe is a molecular genomics and precision medicine company, providing a comprehensive range of clinical genomics through its cutting-edge next-generation sequencing laboratories

2. Even Healthcare Private Limited secured ₹1,688.93 Mn in funding from investors including Khosla Ventures, Mercury Fund, and Rainmatter Ventures, valuing the company at ₹7,530 Mn. Even offers subscription-based plans covering diagnostics, consultations, and hospitalization costs of up to Rs 50 lakh. The company partners with hospitals that guarantee care for its members in exchange for recurring payments. This round brings Even’s total funding to approximately $40 million

3. Watch Your Health raised $5 million in a Series A round co-led by Cornerstone Ventures and Singapore-based Conquest Global. The health-tech startup serves the B2B space, helping insurers and pharmaceutical companies enhance customer experience and engagement. Watch Your Health’s platform provides personalized recommendations for improving health, diet management, exercise regimes, and lifestyle changes

4. Immuneel Therapeutics, a cancer-focused biotech startup, raised Rs 100 crore ($12 million) in the extension of its Series A round from Taiba Middle East FZ LLC. Founded by Biocon founder Kiran Mazumdar Shaw and others, Immuneel is developing cell and gene therapies for cancer patients. The company is working on developing its own pipeline of chimeric antigen receptor T-cell (CAR-T) therapies and other cellular immunotherapies

5. GenWorks, a healthcare firm, raised Rs 41 crore (around $5 million) in a funding round led by Evolvence Fund, with participation from Somerset Indus Healthcare Fund and key individuals from the Zawawi Group. GenWorks offers medical devices for Cardiology, ENT, IVD, newborn care, radiology, and respiratory diagnosis. The company reported Rs 447 crore in operating collection during FY23, registering 20% year-on-year growth

6. Cambrian Bioworks, a Bengaluru-based biotechnology startup, secured $1.45 million in seed funding led by the Irani family office. The company builds solutions for next-generation sequencing and molecular diagnostic markets. Cambrian recently launched its nucleic acid extraction platform, Manta, and aims to enable widespread access to automated devices for liquid biopsy testing and targeted sequencing

7. Transcell Biologics raised an undisclosed amount from Boston-based Quantiphi and IAN Group. The bio-tech company specializes in stem cell technologies and offers Digital Animal Replacement Technology (DART) for the bio and pharmaceutical industry. DART provides animal-free testing methods, fusing human MicroPhysiological Systems technology with AI/ML embedded in silico platform configurations

LoEstro Advisors is an investment banking firm specializing in sell-side fundraise and M&A advisory, along with a strong consulting arm.

Over the last four years, we have grown to be one of India’s largest (in terms of M&A transactions) homegrown boutique investment banks, with $1billion + worth of combined deals closed across education, healthcare, consumer, and technology sectors.