Surge in healthcare M&A activity continued in August, with life sciences, pharma companies leading the pack

The rate of healthcare mergers and acquisitions (M&As) is likely to set a record in 2021, with the potential total number of deals topping 3,000.

In the month of August alone, healthcare companies signed off on 252 deals, according to a new report from Bloomberg Law. The data was put together by auditor KPMG and investment bank FocalPoint Partners of Chicago, which specializes in M&As.

Overall, this year’s monthly average is 243 deals, compared to last year’s 161. However, these “headwinds,” Bloomberg Law reported, may not last considering the state of the healthcare sector amid COVID-19 surges. 

Of those deals in August, more than one-fifth (53) were in life sciences and pharmaceuticals. The sector’s total in 2021 thus far stands at 345. Investor interest will likely remain high, Bloomberg Law reported, citing the ongoing rollout of COVID-19 vaccine booster shots and anticipation of possible treatments for the virus. One potential setback for the sector could be the introduction of drug pricing legislation, which is being considered by Congress.

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Health IT followed with the second-highest number of deals last month, at 36, with telehealth companies continuing to attract investors. Medical devices also did well with 29 deals last month, but may potentially be negatively impacted as more elective procedures are delayed due to COVID-19, according to the report.

Another leading sector in terms of the number of deals included cannabis, as growing interest in the market becomes the “new normal,” Bloomberg Law reported. The cannabis market saw 28 deals in August.

There have been 187 deals to date, which is nearly double what it was for the same period last year. Finally, the number of physician practices deals grew from July to August, to 24, a trend that’s expected to accelerate in the last part of 2021.