Lazard Releases 2021 Global Healthcare Leaders Study
27 September 2021 - 8:49PM
Business Wire
- Most healthcare industry leaders expect
the pandemic to continue through 2022 and beyond -
Lazard Ltd (NYSE: LAZ) today released its fourth annual in-depth
study of strategic challenges and opportunities in the global
healthcare industry, surveying 200 C-level executives and investors
across three global sectors: Biopharmaceuticals; Medical Devices
and Diagnostics; and Healthcare Services. As the COVID-19 pandemic
continues to evolve, this year’s study focuses on the healthcare
leaders’ pandemic-related challenges and expectations, as well as
the strategic priorities for their businesses.
In last year’s study, there was a high correlation between
healthcare industry leaders’ responses and the subsequent course of
events. This year’s study finds that most healthcare leaders expect
a protracted battle with the global health crisis, with the
majority of respondents expecting the pandemic to continue through
2022 and beyond. They also have significant concerns about
scenarios that could create risk for resurgence, such as vaccine
hesitancy, distribution shortfalls in developing countries, and new
variants. In addition, the majority of respondents expect the
pandemic to have lasting impacts, both positive and negative, on
their industry, the business world and socioeconomic trends
globally.
“Most healthcare industry leaders expect the pandemic to
permanently accelerate the digital revolution, technology and
automation, but a significant number also expect worsening national
and global inequity, worsening political divides and protectionist
trends,” said David Gluckman, Global Head of Lazard’s Healthcare
Group. “In a challenging environment for the healthcare industry,
scientific innovation and advances in digital technologies are seen
as the greatest forces for positive transformation.”
“The need for growth and innovation continues to drive companies
toward strategic transactions, including M&A, alliances and
licensing activity,” said Stephen Sands, Chairman of Lazard’s
Global Healthcare Group. “The majority of respondents predict
increased strategic activity for the remainder of this year and
into 2022 and beyond.”
The study offers a variety of insights, including the following
selected highlights:
- Healthcare leaders expect the pandemic to continue through 2022
and beyond. 90% of respondents expect baseline case loads to
persist at more than minimal levels in 2022, and 58% expect this to
continue in 2023 and beyond. More than 90% expect the same for peak
case loads in 2022, and two thirds expect this trend for peak case
loads to continue in 2023 and beyond.
- 70% of healthcare leaders expect that the flexible, hybrid
working arrangements widely adopted by office workers during the
pandemic will be a permanent shift. Almost half of respondents also
expect a permanent shift in economic activity to virtual channels,
with less in-person interactions, movement and travel.
- 64% of healthcare leaders expect the pandemic to permanently
accelerate the digital revolution, technology and automation.
Almost half expect a permanent shift toward a greater focus on
secure supply chains with domestic supply for key elements.
U.S.-based healthcare services leaders are the most concerned about
the possibility of materially higher taxes following the pandemic,
with 48% expecting a permanent shift in this direction, compared to
28% of all study respondents.
- Almost all healthcare leaders expect significantly greater use
of virtual healthcare delivery, with 61% expecting a permanent
shift. A similar number expect a permanent shift toward increased
usage of remote patient monitoring. In addition, most healthcare
leaders expect increased delivery of healthcare in the home and
other alternate sites, as well as greater use of non-physician
professionals to deliver care. Despite alarming episodes of
overburdened intensive care facilities around the U.S. during the
past 18 months, the majority of respondents do not expect greater
hospital capacities as a result of the pandemic.
- When healthcare leaders focus on the greatest strategic
challenges facing the healthcare industry, pricing and
reimbursement remains at the top of their list by a significant
margin. In this year’s study, 68% cite this as a top three
strategic challenge, compared to 61% in 2019 and 57% in 2017.
Quality, cost of healthcare, and the political and regulatory
environment remain in the top three challenges, as they did in 2019
and 2017.
- The top challenges to executing strategic transactions in the
current environment are price level and value expectations,
according to 82% of healthcare leaders. Scarcity of attractive
candidates, and pricing and reimbursement uncertainty are also
mentioned by 49% and 38% of respondents, respectively. One third of
study respondents cite the ready availability of capital for
smaller companies as a top challenge.
- Most healthcare leaders expect private financings, IPOs and
equity follow-ons to stay at the same level or increase for the
balance of 2021 and into 2022. However, the distribution of
responses suggests somewhat more uncertainty about the direction of
IPOs. Private company executives, however, are especially bullish
that IPOs will increase over the remainder of 2021 and into 2022,
with approximately half expecting IPO activity to rise. However,
the majority of healthcare leaders expect SPAC financings to
decrease over this period. Investors in particular have a strong
view that SPAC financings will decrease, with approximately 80%
expecting a decline, compared to approximately 60% of all study
respondents.
- Many biopharmaceutical leaders expect the pandemic to have a
meaningful impact on their sector. The largest number expect
greater use of innovative clinical trial designs, clinical trial
management and use of real-world evidence, with 51% expecting a
moderate impact and 33% expecting a permanent shift in this area.
Very similar numbers expect permanent shifts in other areas, with
greater focus on scientific innovation, increased focus on data
analytics in R&D, and a rise in digital-enabled and virtual
approaches to commercialize products.
- Almost two-thirds of biopharmaceutical leaders say that
oncology is a top therapeutic area priority for the next year,
followed by 53% who cite rare diseases and 48% who cite
autoimmune/inflammation – similar percentages to last year’s study.
Notably, the central nervous system (CNS) has moved up as a
priority therapeutic area, with 42% naming it as their top
priority, compared to 30% last year.
- Immuno-oncology, precision medicine and gene therapy are still
viewed among the top innovative, disruptive technological
priorities for the next 12 months, according to biopharmaceutical
leaders, followed by RNA-based therapeutics, cell therapy and
next-generation antibodies.
The Global Healthcare Leaders Study surveyed 171 C-level
executives and 29 investors across three sectors:
Biopharmaceuticals; Medical Devices and Diagnostics; and Healthcare
Services. These 200 healthcare leaders represent many of the
largest healthcare entities globally, smaller public and private
companies, and prominent investment firms.
The Global Healthcare Leaders Study reflects Lazard’s approach
to long-term thought leadership, commitment to the sectors in which
it participates, and focus on intellectual differentiation. An
executive summary of the Study is posted at
www.lazard.com/perspective.
Lazard’s Global Healthcare Group advises senior executives and
boards of directors on strategic M&A, corporate preparedness,
capital advisory, and other strategic and financial matters. The
group is active in all areas of the healthcare and life sciences
industry, including pharmaceuticals, biotechnology, healthcare
services, and medical devices.
ABOUT LAZARD
Lazard, one of the world's preeminent financial advisory and
asset management firms, operates from 41 cities across 26 countries
in North America, Europe, Asia, Australia, Central and South
America. With origins dating to 1848, the firm provides advice on
mergers and acquisitions, strategic matters, restructuring and
capital structure, capital raising and corporate finance, as well
as asset management services to corporations, partnerships,
institutions, governments and individuals. For more information on
Lazard, please visit www.lazard.com. Follow Lazard at @Lazard.
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