The healthcare and medical technology space demands that we bring both experience and creativity to the table. This is a market segment that is accelerating, with transactions occurring at the intersection of services, technologies and data science. An unprecedented increase in the understanding of biology enables more personalization and precision in medicine, and that innovation necessitates more efficiency to move forward, faster.
In spite of macro uncertainties, healthcare mergers, acquisitions, JVs and other transactions – especially in the MedTech space – are poised to increase, driven by several industry fundamentals:
1. There is hot competition for truly innovative assets.
Innovation is paramount in any industry, but when it comes to expediting advancements in healthcare, extending the lives of those with terminal illnesses and debilitating diseases, or enabling providers to improve quality of care, it’s literally lifesaving. Such demand will drive divestitures of non-core assets; there are plenty of buyers, with their own business strategies, who will vie for those assets. A divestiture will provide funding to invest back in the core business, and startups with game-changing assets – including well-defined legal documents, contracts and agreements – may be more likely to get snatched up altogether.
VIDEO: Amalgam Rx, a MedTech company focused on helping patients and providers make better healthcare decisions by employing technology in providers’ EHRs, explains why having a strategic legal partner with healthcare domain expertise has been critical to the company’s success.
2. Roll-ups are becoming more selective.
Roll-ups of services to achieve breadth and geographic reach have been on the incline, but such tactics may slow a little and be replaced with more selective and highly strategic acquisitions. The integration of health networks may also result in unique partnerships and practice acquisition strategies. One way or another, practice ownership will continue to evolve across the country.
3. Patients demand convenience.
Acquisitions and roll-up activity will be robust in fragmented sectors as a response to patient demand for convenience. The COVID pandemic was an accelerant for the imperative of patient convenience, and patients started behaving more like consumers; the reality is these consumers are not that “patient”.
4. AI is about to get (more) “real”.
As artificial intelligence continues to develop, there will be a variety of new partnership arrangements and varying degrees of implementation all along the spectrum between provider and patient, between development and production, and between the lab and real life. Integrating AI into healthcare will need to follow a diligent process to determine where, when and how adoption should take place.
VIDEO: Amalgam Rx’s leadership team discusses their relationship with Nemphos Braue and how the boutique law firm has been able to provide tailored legal service from formation to negotiating relationships with customers – including multibillion-dollar companies, and beyond.
5. Efficiency is the overarching theme.
Overall, there is great interest in tools, services and device innovations, as well as deal structures themselves, that drive efficiency. Efficiency is essential to the adoption of new technology and improved patient outcomes while maintaining control of cost; efficiency is also essential for cost-effective drug development leading to new pre-clinical services and contract research organization (CRO) models.
When it comes to efficiency, legal expertise combined with domain experience is imperative. By working with an experienced corporate counsel who understands the legal complexities in a given field, the opportunities to mitigate risks, and how to navigate and negotiate key relationships and transactions, CEOs and leaders can focus on their core business.
What lies ahead isn’t guaranteed, but trends point favorably for the MedTech sector. The intersection between healthcare, new biology insights and advancing technology is likely to grow, and having the right partners can help chart a path for business success and improved patient health.
About Nemphos Braue LLC
Nemphos Braue co-founders George Nemphos and Tim Braue left big law firms in order to practice the law differently. A corporate law firm offering tailored and sophisticated expertise in mergers and acquisitions, Nemphos Braue offers big firm experience with boutique-level service, becoming true strategic partners with their clients in industries ranging from healthcare and technology to industrial services, manufacturing, and consumer goods. See why Nemphos Braue is a different kind of law firm at nemphosbraue.com. Interested in speaking with one of our attorneys? Contact us.