Unlike in FAANGM or other market segments where the market leaders are obvious - it is difficult to identify the best companies in life sciences. Fundamentals matter in life sciences/healthcare, as only products that provide clear value to patients, physicians, and payors will achieve regulatory approval, reimbursement, and commercial success.
Lately, it has seemed as if only the largest players in the space have been aggressive in the M&A space in attempts to overcome the end of exclusivity for major brands and business units. But that does not mean that mid-cap firms have not been involved in the M&A game as well.
Consider the recent acquisition of VectivBio (VECT) by Ironwood Pharmaceuticals (IRWD). This was an instance of two mid-cap, similarly sized entities merging to form a value creating transaction. The deal went through at about $1B, net of VectivBio cash and debt or around $17/share.
A clinical stage company, VectivBio focuses on the discovery and development of treatments for severe, rare conditions. Ironwood is able to apply the VectivBio business immediately into its business and add another solid asset to their portfolio.
You can read the press release here:
It seems that the entire ecosystem of biotech/healthcare entities are involved in the M&A game. Not just a focus for the big boys but a focus for any enterprise looking to grow.
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