A surge in healthcare IPOs and mergers and acquisitions is expected in 2025, according to Jefferies' annual healthcare report. This positive outlook is shared by investors and healthcare executives, who anticipate a strong market environment.
Notable transactions such as Johnson & Johnson's acquisition of Shockwave Medical and KKR's investment in Cotiviti highlight the dynamic nature of the healthcare M&A sector. Despite a recent slowdown in global M&A activity, 72% of survey respondents predict an increase in healthcare sector transactions in the coming year.
Private equity participants also view Europe as a promising region for investment opportunities. The report indicates that 64% of those surveyed expect a rise in IPOs, marking the highest expectations for equity financing and IPO activity since 2018.
The report also highlights the growing influence of weight-loss drugs, with 47% of respondents believing their impact will be significant and enduring in the long term. Novo Nordisk's obesity treatment, Wegovy, has performed well, contributing to a market that could reach $150 billion by the early 2030s.
Market forecasts are generally positive, with two-thirds of respondents predicting a rise in the FTSE 100 index and 73% expecting gains in the MSCI World Healthcare index.
Geopolitical risks have emerged as the primary concern for investors, surpassing financing difficulties. While North America remains a dominant hub for healthcare investment, there is a shift in focus away from Europe. However, the anticipated increase in IPOs and M&A activity in 2025 could revitalize the European healthcare sector if geopolitical uncertainties are effectively managed.
Stakeholders will closely monitor developments that could impact investment strategies and market dynamics in the healthcare arena.