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Sponsored ContentEurope’s investors positive over health and life sciences sector – report
Despite uncertainty with the global economy Europe’s largest corporations and investors are optimistic about the state of the healthcare and life sciences (HLS) sector and its capacity for growth in the immediate future, with 80% of corporates and 86% of investors expecting to see an increase in investment over the next three years.
The report, published by law firm Simmons & Simmons, surveyed more than 700 senior executives and major investors representing multibillion-dollar companies across Europe.
Three-quarters of the largest corporates are planning HLS M&A activity (72%) and to raise capital (75%) in the next three years; while for investors, around two-thirds plan HLS M&A activity (64%) and (67%) to raise capital over the same period.
Other report findings, which reveal views on the effect of technology; environmental, social and governance (ESG); and regulation, include:
• Investment strategies: Despite an optimistic general outlook in the three-year term, all corporates cite concerns around growth and investment strategies – with the biggest concern (42%) the gaps between the perceived valuation of buyers and sellers when it comes to HLS M&A and investment deals.
• Technology and artificial intelligence: European corporates cite cloud platforms, AI and healthcare apps as the top three technologies they are currently prioritising – while for investors, healthcare apps, blockchain and smart clothing/wearables rank in their top three technologies for investment. Virtually all respondents (100% of corporates and 99% of investors) had a favourable view of AI – seeing it as positively disrupting the HLS sector over the next two years.
• ESG impact: With HLS industry emissions accounting for almost 5% of global emissions, pressure to reduce the sector’s impact is intensifying. All investors stated that the sector featured in their wider ESG investment plans – with 40% favouring ESG-focused thematic investing in HLS to offset their investments, for example, investing in companies promoting sustainable healthcare, widening access to medicines or addressing global health challenges.
• Regulatory challenges: All respondents expect future regulations to significantly affect their growth and investment strategies. Corporates cite the EU Pharma package as having the greatest impact, while investors cite ESG regulations, such as the EU’s Supply Chain Directive.
Alexandre Regniault, partner and head of Simmons & Simmons’ healthcare and life sciences sector group, said: “This report shows that Europe’s biggest companies and investors are overall optimistic for the future of the health and life sciences sector. The strong vote of confidence revealed from our research comes despite obstacles such as uncertainty with the wider macro economy and the growing complexity of regulations.
“Corporates and investors appear to be willing to confront challenges in the HLS sector due to the vast array of opportunities for innovation. Developments in technology – including AI – are now proliferating at pace and being widely integrated. There is a strong belief from the sector’s major players that they will see growth and returns over the next few years.”
Read the report here
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