Health Care
The long-term fundamentals of the healthcare sector remain strong, driven by several key trends: the increase in the number of seniors is leading to a greater demand for prescription medicines and care facilities; the vast-unmet medical need in many areas is fuelling demand for innovative new medicines; and there is a concerted drive among governments to reduce overall health costs.
There is also growing patient awareness, resulting in an increased expectation of better medicines and technological advances leading to new types of treatment. All of these key drivers are increasing the need for private equity and new investments to deliver more capacity and quality of care into the health system.
Sectors include:
- Senior Care & Housing
- LT and Acute Care Hospitals
- Healthcare Provider Services
- Medical Devices and Equipment
- Beauty and Personal Care
- Medical Information Systems
- Pharmaceuticals
- Diagnostics
- Healthcare IT
- Specialty Services
The relentless technological advancement within the health care sector shows no signs of slowing with the biotechnology market alone set to reach a value of $80 billion by 2008. Looking forward, the home healthcare market will be one of the fastest growing markets as demand for disposable medical supplies is expected to increase as consumers explore self-treatment and preventive medicines.
With the aging U.S. population offering strong potential for the medical equipment and supplies industry, the strength and stability of the overall healthcare market will provide a solid revenue stream for manufacturers of medical equipment and supplies.
Across the world, the upward pressure on healthcare spending is relentless. As new treatments become available, our capacity to extend and improve people’s lives is taking giant strides. This creates a huge set of challenges for governments and healthcare professionals.
In the West, healthcare ‘consumers’ expect every expensive new treatment to be instantly available and as more and more people live past 80, healthcare costs escalate rapidly. Further pressure is added through non-essential and aesthetic surgery.
Meanwhile, funding pressures continue to be severe everywhere. In the US, healthcare expenditure represents 15% of GDP, with limited room for growth. In the publicly-funded and relatively inefficient hospitals of Europe, spending levels are rising but efficiency gains are slow. While billions of Euros will undoubtedly find their way into healthcare, the system will simply not deliver without huge strides in efficiency and innovation. This is where venture capital and private equity will play a vital role.
We identify with businesses delivering care services for the elderly and specialist care providers and partnering with businesses in acute and homecare services to the healthcare sector, such as IT, back-office processing, distribution and supply, testing, sterilization and staffing.
In pharma, medical products and devices, we identify with opportunities where companies leverage distribution and sales-force strength and look to partner with businesses that develop and market innovative products or look for new ways to remarket their existing products, to address unmet medical needs and/or help reduce cost.
We remain focused on sponsoring businesses that own or are further developing IP-protected products, and we are primarily targeting later-stage opportunities with reduced technical risk and established route to further revenues and profitability. In practically every case, these companies should already have products past clinical trials; partnerships with a large pharma; along with existing product distributions.
We also view medtech opportunities, which in many cases, have lower capital requirements and often shorter development times, as targets of potential unmet needs in high-growth markets. In short, a wide range of opportunities, from drug discovery and medical technology; to acute and long-term care services will continue to drive the overall health care sector.
In the areas of growth capital and buyouts there are four clear business models of interest to Lexington: asset/facilities-based businesses, businesses based on distribution networks that can be leveraged; companies with innovative technology that are able to deliver treatments or services in a different and more effective way; and companies built around good, long-term contracts within the health system.
In today's quickly changing healthcare environment, timely and appropriate financial decisions are essential to maintaining financial strength, avoiding missed opportunities and supporting the continuity of your Company's objectives and operations.
At Lexington, our expertise helps eliminate drawn-out, lengthy capital searches with false starts, or inappropriate capital decisions. Our professionals help businesses maximize the potential of their market-leading products and services by identifying viable alternative financing options.
Our mission is to provide the highest quality of financial advisory, capital raising, and debt placement services to health care companies in North America. We have extensive experience in financial advisory activities such as mergers, acquisitions, cross-border advisory, spin-offs, divestitures, and corporate sales; placement of equity, restructurings, and equity-linked, high-yield, and investment grade securities; as well as commercial banking products.
