Healthcare executives and investors are preparing for a significant increase in initial public offerings (IPOs) and corporate transactions in 2025 due to geopolitical tensions.
According to Jefferies" annual Healthcare Sector Report, industry leaders are optimistic about higher levels of mergers and acquisitions (M&A) in the coming year. Recent high-profile deals, such as Johnson & Johnson"s acquisition of Shockwave Medical and KKR"s investment in Cotiviti, support this optimism. The report surveyed around 500 senior healthcare executives, institutional investors, and private equity funds, highlighting growing confidence in the market.
While transaction activity has been moderate recently, the expectation of increased M&A activity signals a potential rebound in the healthcare sector. Additionally, the survey indicates a strong recovery in capital markets, with a majority of respondents anticipating a rise in healthcare IPOs. Geopolitical risks are seen as the primary concern for healthcare investors, followed by funding challenges and price cuts. North America is viewed as the most promising market for healthcare transactions, while interest in Continental Europe has decreased.
The significance of weight loss drugs in the healthcare landscape is growing, with respondents indicating that their impact will be substantial and enduring. This reflects the rising demand for anti-obesity medications. The report also emphasizes the importance of innovation in the healthcare industry and the potential for new therapies to reshape market dynamics.
Respondents express optimism regarding market forecasts, with expectations of gains in the UK FTSE 100 index and the MSCI World Healthcare index by the end of 2025. Overall, the anticipated surge in IPOs and M&A activity, along with the increasing significance of weight loss drugs, paints a promising picture for the healthcare sector in 2025.