Healthcare executives and investors are expecting a significant increase in initial public offerings (IPOs) and mergers and acquisitions (M&A) in 2025, according to Jefferies" annual healthcare report.
The report, based on a survey of around 500 healthcare executives, including institutional and private equity investors, shows a strong belief in the sector"s resilience and growth potential.
Recent notable transactions, such as Johnson & Johnson"s $13.1 billion acquisition of Shockwave Medical and KKR"s investment in Cotiviti, demonstrate the ongoing interest in consolidating healthcare assets.
While North America remains the dominant market, with 74% of executives identifying it as the region with the greatest opportunities, there is also a notable shift in sentiment towards Europe and China as potential growth areas.
Geopolitical risks have emerged as the primary concern for healthcare investors, with 40% of survey participants citing it as the biggest challenge, a significant increase from the previous year.
Funding issues, while still a concern, have seen a slight increase in apprehension, with 36% of respondents identifying it as a major problem.
Despite these challenges, healthcare executives remain largely optimistic, with 64% of respondents expecting more healthcare IPOs in 2025.
The report also highlights a growing interest in weight loss drugs, with 47% of respondents believing in their significant and sustainable impact in the long term.
The success of Novo Nordisk"s Wegovy exemplifies this trend, and the obesity drug market is estimated to reach approximately $150 billion by the early 2030s.
Looking ahead, two-thirds of respondents express confidence that the UK"s FTSE 100 index will rise by the end of 2025.
Within the healthcare sector, 73% of executives expect the MSCI World Healthcare Index to also finish higher in 2025.
This positive sentiment reflects a broader belief in the sector"s ability to navigate challenges and capitalize on emerging opportunities, particularly in light of recent advancements in healthcare technology and treatment options.
The anticipated surge in IPOs and M&A activity could reshape the sector, presenting new avenues for investment and growth.
The interplay of geopolitical factors, funding dynamics, and innovative treatments will likely play a crucial role in determining the trajectory of healthcare investments in the coming years.