Why Healthcare?

Hey guys,

I know I'm going to get heat for this, but why would someone choose to go into healthcare investment banking? I know it's one of those industries that will continue, but the volatility and unpredictability seems to be a deterrent.

Any info will help.

11 Comments
 
Best Response
  • Active M&A environment centered around cost-managing and pricing leverage (merging hospital systems, PBM, biotech/pharma, insurance, e.g. Shire-Baxalta, Pfizer-Allergan, Aetna-Humana, Anthem-Cigna, UNH-Catamaran, the list goes on...)
  • Cost savings and operating efficiencies from consolidation of EMR/EHR platforms and emergent info tech
  • New and life-altering treatments are being developed for previously-economically-unfeasible drugs for rare diseases (Shire-Baxalta)
  • "Panacea" drugs with much greater effectiveness and safety profile for patients (adalimumab, sofosbuvir, etc)
  • Further fundamental changes in value model of drug development (Allergan, Valeant, etc)
  • Leveraging population health implementation brings challenges, promises huge value (Optum/UNH, etc)
  • Breeding ground for new technology and new models for Incentivizing human behavior to improve care and generate value (e.g. servicing noncompliant patient populations)

Massive industry disruptions are generally a good thing for investment bankers.

 
"Solidarity"

- Active M&A environment centered around cost-managing and pricing leverage (merging hospital systems, PBM, biotech/pharma, insurance, e.g. Shire-Baxalta, Pfizer-Allergan, Aetna-Humana, Anthem-Cigna, UNH-Catamaran, the list goes on...)
- Cost savings and operating efficiencies from consolidation of EMR/EHR platforms and emergent info tech
- New and life-altering treatments are being developed for previously-economically-unfeasible drugs for rare diseases (Shire-Baxalta)
- "Panacea" drugs with much greater effectiveness and safety profile for patients (adalimumab, sofosbuvir, etc)
- Further fundamental changes in value model of drug development (Allergan, Valeant, etc)
- Leveraging population health implementation brings challenges, promises huge value (Optum/UNH, etc)
- Breeding ground for new technology and new models for Incentivizing human behavior to improve care and generate value (e.g. servicing noncompliant patient populations)

Massive industry disruptions are generally a good thing for investment bankers.

wow sir, this is most useful. we should have such a post for every coverage group.
 
"Solidarity"

- Active M&A environment centered around cost-managing and pricing leverage (merging hospital systems, PBM, biotech/pharma, insurance, e.g. Shire-Baxalta, Pfizer-Allergan, Aetna-Humana, Anthem-Cigna, UNH-Catamaran, the list goes on...)
- Cost savings and operating efficiencies from consolidation of EMR/EHR platforms and emergent info tech
- New and life-altering treatments are being developed for previously-economically-unfeasible drugs for rare diseases (Shire-Baxalta)
- "Panacea" drugs with much greater effectiveness and safety profile for patients (adalimumab, sofosbuvir, etc)
- Further fundamental changes in value model of drug development (Allergan, Valeant, etc)
- Leveraging population health implementation brings challenges, promises huge value (Optum/UNH, etc)
- Breeding ground for new technology and new models for Incentivizing human behavior to improve care and generate value (e.g. servicing noncompliant patient populations)

Massive industry disruptions are generally a good thing for investment bankers.

I assume the Insurance mergers will fall under FIG and not Healthcare?

 

It's usually both healthcare and insurance. Source: work in HC IB

I am a blogging intern at Wall Street Oasis. Feel free to follow me to see my weekly posts.
 
"DiamondsDancing"Professor told me that healthcare will never be fixed; therefore, you will always be guaranteed a job there

Sadly, there's some truth to this.

 

not a banker, but we have a lot of clients in healthcare. a couple reasons make this an attractive industry:

  1. plenty of venture money interested in it, so early companies with interesting compounds/delivery methods will have capital available to them, so that takes care of early stage

  2. FDA is becoming very friendly to innovative drugs that cure a lot of diseases, like immunotherapies

  3. mature companies that own the molecules have cash to make acquisitions

  4. marketers generate tons of free cash flow to make acquisitions once the drugs become marketable

  5. pharma got really fat over the past 2 decades, but it has recently gotten leaner, with companies getting more focused, spinning off divisions, etc. this goes in waves, expect that cycle to continue.

 

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