Pharma and healthcare sector seals $4.1 bn deals in Q2 2024: Report

The average deal size also saw a jump, rising from $9.7 million in Q1 calendar year 2024 to $74 million in Q2 2024

The Indian pharmaceutical and healthcare sector witnessed a surge in activity during Q2CY24, securing 55 deals worth $4.1 billion, a 49 per cent increase compared to the corresponding period last year, according to a latest report by Grant Thornton Bharat.

This marks a 57 per cent increase in deal values compared to the same period last year and an 8 times rise from the previous quarter, it said.

The average deal size also saw a jump from $9.7 million in Q1CY24 to $74 million in Q2CY24. This can be attributed to a rise in high-value deals, with 11 deals exceeding $3.4 billion compared to just one such deal in the previous quarter.

 

Mergers and acquisitions (M&A) recorded a dramatic 3.8 times increase in values, reaching $1.4 billion, while the volume of deals rose by 29 per cent. Dr. Reddy’s Laboratories' acquisition of Northstar Switzerland SARL for $633 million was the most significant M&A transaction, highlighting the sector's expanding global footprint.

The healthtech and medical devices segments have seen an uptick in investor interest, contributing to the overall deal value. Healthium MedTech's acquisition by KKR Asian Fund IV, valued at $843 million, stands out as the largest deal of the quarter. Deal volumes also witnessed a similar growth trajectory, with a 49 per cent increase from 37 deals in Q2CY23 to 55 deals in Q2CY24.

Healthtech emerged as the leader in deal volumes, capturing a 33 per cent share, while the pharma and biotech segment dominated in terms of deal values, contributing 59 per cent of the total sector value. The medical devices segment saw an exceptional 87 times increase in deal values from the previous quarter, reflecting heightened investor focus on this area.

Single specialty hospitals continued to attract significant investments, driven by a growing demand for specialised healthcare services. In contrast, the diagnostics and wellness segments experienced a slight dip in activity this quarter.

The quarter also saw activity in the initial public offering (IPO) and qualified institutional placement (QIP) markets. Indegene led the IPO front with a successful fundraise of $222 million. Additionally, Shilpa Medicare and Ami Organics secured QIP allotments worth $108 million, further indicating a vibrant capital market environment for healthcare companies.
 

Deal summary for volumes pharma and healthcare sector 

Deal Summary	Q4 2023	Q1 2024	Q2 2024
Domestic	15	11	12
Inbound	3	1	1
Outbound	6	2	5
Total M&A	24	14	18
PE	31	36	37
Grand Total	55	50	55

Source: Grant Thornton Bharat Report