Life Sciences & Health Care Quarterly update Q2 2018 Deloitte Corporate Finance LLC | www.investmentbanking.deloitte.com Quarterly Update | Q2 2018 | Life Sciences & Health Care Explosion of real world data in healthcare(1) In This Update Real world data (RWD) refers to heath care data gathered from a variety of sources outside of controlled clinical trials. These sources can include genomic ▪ Increasing need for data, data from health apps, wearables, and other biometric devices. This data-driven analytics information is used to generate real world evidence (RWE) and support data- driven, individualized health care reports. With the rise of digital and electronic fuels 2018 health care health care data comes a need for RWD management in the pharmaceutical transactions space. Deloitte RWE benchmarking survey findings(2) Also: This year Deloitte conducted its second annual survey of pharmaceutical ▪ Selected Recent Life companies’ perspectives regarding the advances in RWD management, RWE Sciences & Health Care value creation, and RWE applications. The survey results indicate that the (LSHC) M&A visibility and importance of RWE initiatives are increasing at the executive level. The survey found that most respondents are leveraging RWD across the Transactions enterprise to not only generate evidence, but also support other research, ▪ LSHC Sector Breakdown corporate, and commercial objectives. Other key findings include: and Analysis • Increasing importance of RWE integration: Many pharmaceutical companies are now leveraging RWD holistically throughout their ▪ Selected organizations to generate evidence and support patient research. Macroeconomic and • Growing data landscape: More so than ever, respondents are using Sector Data non-traditional data sources, such as purpose-built linked data, connected wearable technology, and health apps to drive decision making. • Shifting RWE activities in house: 70 percent of respondents reported Who We Are internally building out data analytics programs to gather and analyze RWE, driving an increase in RWE spending on talent and technology. Deloitte Corporate Finance RWE in end-to-end evidence management(3) LLC (DCF) is a leading global middle market M&A The rise of RWD is challenging biopharma’s traditional operating model across the product life cycle. To remain competitive and differentiated in a value- advisor. DCF’s based, personalized health care system, biopharma companies are likely to professionals have benefit from establishing end-to-end (E2E) evidence-management strategies, extensive knowledge of which use processes to access data across the organization to support data- and experience in the Life driven decision making. By adopting E2E evidence management strategies, Sciences & Health Care companies can use RWE to discover, generate, and optimize product value: space. Optimizing value Generating value Discovering value LSHC Contacts Applying RWE to Leveraging RWE to Using RWE to develop, support, and maximize the enhance preclinical sustain a compelling potential for clinical and clinical research Simon Gisby value story for and commercial productivity through Managing Director approved therapeutic success, optimize precise target and [email protected] interventions and to therapeutic response, patient cohort inform new and assess category identification. +1 (212) 436-2495 opportunities for dynamics to support therapeutic discovery. pricing strategies. Doug Bolt Recent data-driven Health Care M&A activity Managing Director [email protected] Roche Holding acquires Flatiron Health, Inc.: +1 (704) 731-7219 On April 6, 2018, Switzerland-based Roche Holding (Roche), a diagnostic pharmaceutical company, acquired Flatiron Health, Inc. (Flatiron), a New York-based developer of cancer electronic health record software for $1.9 Jason Porter billion. Roche hopes to use Flatiron’s expertise in real world evidence Managing Director collection to give them better insights on addressing the complex needs of [email protected] their patients.(4) +1 (704) 333-0136 Medidata Solutions, Inc. acquires Shyft Analytics, Inc.: On June 12, 2018, New York-based Medidata Solutions, Inc. (Medidata), a Nick Cirignano provider of cloud-based solutions for life sciences across the globe, acquired Managing Director Shyft Analytics Inc. (Shyft), a Waltham, MA-based provider of cloud-based data, analytics, and mobile solutions to the life sciences industry, for $195 [email protected] million. This deal connects Medidata’s real world data collection processes +1 (212) 436-3273 with Shyft’s comprehensive analytics and AI platform.(5) www.investmentbanking.deloitte.com | Page 2 Quarterly Update | Q2 2018 | Life Sciences & Health Care Q2 2018 US LSHC M&A aggregate transaction value and EBITDA multiples(1)(i)(ii) Aggregate transaction value ($ in millions) $17,669 $14,000 $12,562 $12,000 $11,630 $10,000 $8,000 $7,532 $6,515 $6,000 $4,000 $2,566 $2,000 $865 $0 Facilities Life Sciences Medical Medical Managed Services Technology Devices Distributors Healthcare Median LTM EBITDA NA 10.5x 9.7x NA 17.5 10.6 17.1x multiple(ii) Q2 2018 US LSHC M&A activity deal list (2)(i) Date Status Sub-sector Target Buyer Size ($MM) announced transaction 11-Jul-18 Announced Life Sciences Visterra, Inc. Otsuka America, Inc. $430.0 9-Jul-18 Announced Medical Devices Bovie Medical, Inc. Specialty Surgical Instrumentation, Inc. 97.0 5-Jul-18 Announced Medical Devices Cryterion Medical, Inc. Boston Scientific Corporation (NYSE:BSX) 202.0 3-Jul-18 Closed Services Create Group NYC, LLC Ashfield Healthcare Ltd. 58.4 3-Jul-18 Announced Life Sciences Juniper Pharmaceuticals, Inc. Catalent Pharma Solutions, Inc. 142.6 2-Jul-18 Closed Facilities PAMC, Ltd. Apollo Medical Holdings, Inc. 33.0 28-Jun-18 Announced Life Sciences Keryx Biopharmaceuticals, Inc. Akebia Therapeutics, Inc. 533.0 25-Jun-18 Announced Life Sciences Exosome Diagnostics, Inc. Bio-Techne Corporation 575.0 19-Jun-18 Announced Life Sciences Foundation Medicine, Inc. Roche Holdings, Inc. 2,395.1 19-Jun-18 Announced Technology Cotiviti Holdings, Inc. Verscend Technologies, Inc. 5,118.1 15-Jun-18 Announced Services CBR Acquisition Holdings Corp. GI Partners, LLC 530.0 15-Jun-18 Announced Services InfuSystem Holdings Inc. Argonne Capital Group, LLC 106.5 11-Jun-18 Announced Life Sciences Humacyte, Inc. Fresenius Medical Care AG & Co. 150.0 11-Jun-18 Announced Services Envision Healthcare Corporation KKR & Co. Inc. 11,186.0 6-Jun-18 Announced Medical Devices Advanced Sterilization Products Services, Inc. Fortive Corporation 2,700.0 Notes: i) Only US deals with reported transaction size greater than $30MM listed. ii) Represents the median LTM EBITDA multiple by sector for listed deals and for available multiples. www.investmentbanking.deloitte.com | Page 3 Quarterly Update | Q2 2018 | Life Sciences & Health Care Q2 2018 US LSHC M&A activity deal list (1) (i) 6-Jun-18 Closed Managed Healthcare Paladina Health, LLC New Enterprise Associates 100.0 5-Jun-18 Closed Medical Distributors CoolSystems, Inc. Avanos Medical, Inc. 65.0 4-Jun-18 Closed Services Cord Blood Bank, Inc. Cryo-Cell International, Inc. 219.0 4-Jun-18 Announced Medical Devices elliquence, LLC Shanghai Xianfeng Ltd. 77.2 29-May-18 Announced Managed Healthcare Caidan Holding Company, Inc. The WellCare Management Group, Inc. 2,500.0 28-May-18 Announced Services Counsyl, Inc. Myriad Genetics, Inc. 375.0 23-May-18 Closed Facilities 9 Senior Living Properties MBK Senior Living Ltd. 382.0 16-May-18 Announced Medical Devices Abaxis, Inc. Zoetis, Inc. 1,994.6 14-May-18 Announced Life Sciences AurKa Pharma Inc. Eli Lilly and Company 110.0 10-May-18 Closed Life Sciences ARMO BioSciences, Inc. Eli Lilly and Company $1,627.9 7-May-18 Closed Life Sciences Gemini Laboratories, LLC Amneal Pharmaceuticals, Inc. 121.2 7-May-18 Announced Managed Healthcare athenahealth, Inc. Elliott Management Corporation 6,880.0 3-May-18 Closed Technology HealthGrid Allscripts Healthcare, LLC 110.0 3-May-18 Closed Medical Devices American Technical Molding, Inc. Viant 600.0 2-May-18 Closed Life Sciences Benevir Biopharm, Inc. Janssen Biotech, Inc. 1,040.0 1-May-18 Closed Technology SCIOInspire, Corp. Exl Service.com, LLC 236.5 1-May-18 Closed Facilities 5 Assisted Living/Memory Care Communities National Health Investors, Inc. 67.5 30-Apr-18 Announced Life Sciences SteadyMed Ltd. United Therapeutics Corporation 86.0 26-Apr-18 Announced Life Sciences Somerset Therapeutics, LLC Par Pharmaceutical, Inc. 159.3 26-Apr-18 Closed Facilities United Surgical Partners International, Inc. Tenet Healthcare Corporation 630.0 25-Apr-18 Closed Life Sciences Sublimity Therapeutics Ltd. Orimed Advisors, LLC. 64.0 25-Apr-18 Closed Medical Distributors Medical Specialties Distributors, LLC McKesson Corporation 800.0 23-Apr-18 Closed Facilities Curo Health Services, LLC TPG Capital 1,400.0 23-Apr-18 Announced Life Sciences Orexigen Therapeutics, Inc. Whitebox Advisors, LLC 75.0 21-Apr-18 Closed Managed Healthcare Sound Inpatient Physicians, Inc. Summit Partners, LLP 2,150.0 20-Apr-18Date AnnouncedStatus Life SciencesSub-sector Ionis Pharmaceuticals, Inc. Target Biogen, Inc. Buyer Size ($MM)625.0 announced transaction 16-Apr-18 Closed Medical Devices nVision Medical Corporation Boston Scientific Corporation 150.0 10-Apr-18 Closed Medical Devices Analogic Corporation Altaris Capital Partners, LLC 948.0 9-Apr-18 Closed Life Sciences AveXis, Inc. Novartis AG 8,696.3 9-Apr-18 Closed Services Phillips, DiPisa & Associates, Inc. AMN Healthcare Services, Inc. 37.0 4-Apr-18