First Half of 2017 Offers a Healthy Diagnosis for Healthcare M&A Activity

In this issue, we analyze a select group of exciting recent healthcare transactions that caught our attention. We highlight a recent increase in large-scale hospital transactions, describe a merger that could produce the next great revenue cycle management platform, and assess the potential disruptive impact of Amazon’s rumored entry into the pharmacy sector. We also provide an in-depth analysis of why we are seeing tremendous interest in addiction treatment services transactions. However, let’s begin with a brief review of one of the sectors we believe is experiencing game-changing growth investment and M&A activity: genetic diagnostics.

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Throughout the national debate on healthcare, one fact remains true: technology and innovation will be major drivers to enhance the delivery of care, reduce costs, and improve patient outcomes. Genetic diagnostics are enabling medical professionals and patients to better predict, diagnose, and understand cancers and inherited and acquired diseases. We are still in the early innings of market adoption of genetic diagnostics with massive untapped potential to radically change the way our healthcare system determines care pathways.

Intrepid is proud to be representing Ambry Genetics, a leader in genetic diagnostics, in its pending sale to Konica Minolta in a transaction valued at US$1 billion. Ambry offers the world’s most comprehensive suite of genetic testing solutions for inherited and acquired diseases, as well as for numerous clinical specialties, including oncology, cardiology, pulmonology, neurology, and general genetics.

Other exciting transactions in diagnostics this quarter include Transgenomic’s reverse merger into Precipio Diagnostics, which will now trade on the NASDAQ as Precipio (NasdaqCM:PRPO) and market its liquid biopsy technology for early cancer detection across multiple genetic sequencing platforms. In addition, CDx Diagnostics, which utilizes neural-network-based 3D microscopy to find dangerous abnormal cells before they can develop into cancer, sold a majority interest to Galen Partners, a healthcare-focused growth equity firm. Also, Kailos Genetics, a provider of genetic tests, including breast and ovarian cancer risk screening as well as companion diagnostics to test for a patient’s potential interactions with specific drugs, announced a growth capital investment from In-Q-Tel, a non-profit private equity and venture capital firm. Lastly, Guardant Health, which develops a blood test that enables real-time tracking of a patient’s cancer without the need for a biopsy, announced a $360 million capital raise from SoftBank, Sequoia, OrbiMed, Tamasek, and others.

Intrepid’s Healthcare Group is excited to be a part of this transformative increase in genetics M&A activity, which has the potential to change the face of healthcare for generations to come.