Ciesco Market Intelligence 16 February 2024

“The enduring importance of investment fundamentals has been demonstrated in 2023, let’s not forget them as green shoots emerge” – Inflexion for Ciesco


In Ciesco’s 2023 Global M&A Review & 2024 Outlook, Christian Fellowes, Investment Director from Inflexion Private Equity Partners LLP, contributed an editorial highlighting the resilience of the healthcare sector and the expectations for an increased transaction activity in 2024.


The Guest Editorial by Christian Fellowes, Inflexion.

2024 has started with the emergence of green shoots giving hope that the year will be more fruitful for transactions in the healthcare space vs. 2023.

This is welcome news, since last year saw a continuation of uncertainty around wars, inflation, and threats of recession. Macro uncertainty was reflected in repriced risk appetite, with spreads between bid and ask prices affecting both public (IPO and follow-ons) and private transaction volumes. From our perspective, we witnessed a bifurcation in the market whereby top-quality assets transacted well whilst others struggled.

Despite all this, healthcare continued to represent c. 15% of deals, which is in line with longer-term trends and highlights the resilience of the sector vis-à-vis the wider market. Bain estimates that healthcare buyouts in 2023 accounted for $29bn of deal value in North America and $14bn in Europe, with popular subsectors including biopharma and the related areas of CROs and CDMOs.

We anticipate that a confluence of factors should support increasing transaction activity in 2024. The material pools of capital driving transaction flow all have reasons to encourage deployment:

1) Large pharma sponsors are facing an unprecedented large patent cliff over the next 3 – 5 years which will drive increased in-licensing and M&A activity to fill the revenue gap this leaves;

2) Market expectations that we’ve reached peak inflation and interest rates provide confidence for the broader macro backdrop. The Biotech public market activity already may be showing tentative signs of life with multiple IPOs already announced ahead of the reference JP Morgan Healthcare Conference in San Francisco in early January; and

3) PE is sitting on record levels of dry powder which needs to be deployed and an increasing number of assets that need to be exited.

Confidence in the first two is a vital ingredient for Life Sciences venture funding activity and is also important to pharma services market demand.

Whilst forecasting the speed of any recovery is unclear, the current malaise has been a good reminder of the enduring importance of investment basics that are associated with top-quality assets, namely the existence of a) a clear moat, b) a strong management team, and c) obvious ecosystem right to win (within life sciences, a company’s offering should tick most of the ‘better, faster and more efficient’ requirements). Inflexion’s recent minority investment into listed GlobalData Plc’s healthcare division ticked many of these boxes.

Overall, we hope 2024 will be a year where we see transaction cadence begin to increase, opening the opportunity to support the rapid growth of ambitious top-quality companies at a technologically exciting time in the sector.


Christian has a unique perspective on the dynamics in the healthcare sector – from a medical, transaction and entrepreneurial standpoint. He started his career as a doctor, and, prior to his current role at Inflexion, he was at GHO Capital and Duke Street covering a range of healthcare subsectors. Christian also co-founded a medical technology company, ASep Healthcare Limited, to commercialise a medical product that he developed with a colleague.


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