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PE/VC investments in healthcare and related sectors during first half of 2022 declines almost 30%
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Gireesh Babu, New Delhi
August 29 , 2022
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The private equity/venture capital (PE/VC) investments into healthcare and pharmaceutical sector has seen a decline of close to 30 per cent during the first six months of the year 2022, with pharma and hospitals and clinics reporting a decline in attracting investment from private investors during the year.
This comes after the sector seeing the private equity investments doubling for the whole year of 2021, at $6.19 billion with a total 156 deals as compared to $3.09 billion with a total of120 deals in the year 2020, according to data from Venture Intelligence, a research service focused on private company financials, transactions, and their valuations.
The first half of the year 2022, from January to June, reported a total of 66 deals with investments deals, which are disclosed, worth $2.65 billion as compared to 77 deals worth $3.76 billion during the same period of the previous calendar year. In terms of number of deals, there has been a decline of around 14 per cent in the comparable period.
The first quarter of the year 2022 saw $1.37 billion investment, which was followed by $1.28 billion investment in the second quarter of the calendar year. The corresponding periods of previous year reported 41 deals with investment of $1.7 billion and 36 deals with investment of $2.06 billion, respectively.
The top PE/VC investments in the sector include $262 million investment by ADIA into pharma company Intas Pharmaceuticals in April, 2022; investment of $250 million by TA Associates into bio informatics firm Zifo Technologies in May, 2022; $245 million investment by Anchorage Capital Partners and others in February, 2022.
Reports are that PE major Warburg Pincus also announced picking up a minority stake in Micro Life Sciences, the parent organisation of Meril Group, which is the largest medical devices firm in the country.
The other major deals include a $170 million investment by Singapore’s sovereign wealth fund GIC to pick up a minority stake in Asia Healthcare Holdings in the sector of Hospitals, in February, 2022. Asia Healthcare Holdings is a specialty healthcare delivery platform backed by TPG Growth. The $136 million investment by TPG Growth and Temasek into Tamil Nadu-based eye care clinic chain Dr Agarwals Healthcare, in May, 2022, was another major investment by a private sector investor into the healthcare and related sectors, says Venture Intelligence.
Almost all the sub sectors listed by Venture Intelligence, except for the healthtech and medtech segments, have shown a decline in deals and deal value during the period compared to the corresponding six months of last year.
For instance, the pharma and active pharmaceutical ingredients (API) segment reported a 40 per cent decline in deal value during the period of January to June, this year, as compared to the same period last year. The first half of 2022 reported eight deals and a deal value of $879 million as compared to 11 deals and $1.46 billion investment in the same period of the year 2021.
Hospitals and clinics attracted 13 deals and a deal value of $515 million during the first six months of 2022, as compared to 11 deals and $635 million in deal value reported in the same period last year. Healthcare B2B software including software-as-a-service segment saw four deals and $57 million attracted during H1 of 2022, as compared to nine deals and $167 million deal value in the comparable period last year.
Biotech sector reported two deals with $33 million being committed, as against six deals and $106 million deal value last year. E-pharmacy segment, another one which witnessed eight deals with $560 million deal value last year, has seen just a single deal and a deal value of $22 million committed during the first six months of 2022.
However, healthtech saw the deal value almost doubling to $698 million with 25 deals during the first half of 2022, as compared to $344 million with 20 deals in the same period of last year. Similarly, the medtech sector witnessed a jump to $387 million committed and five deals in 2022 till June, compared to $24 million and three deals announced in the same period of previous year, shows the Venture Intelligence data.
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