Smaller Innovative Health Care Companies See Early Takeovers by Larger Companies, Resulting in Less Differentiated Companies Coming to Market Via the IPO Process, Says Expert Analyst Ross Muken

Wall Street Transcript

67 WALL STREET, New York - August 20, 2013 - The Wall Street Transcript has just published its Medical Research, Diagnostic Substances and Life Science Tools Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Health Care Consolidation Activity - Cost Reduction and Improving Efficiencies - Cost Reduction Amid Reimbursement Uncertainty - Health Care Growth Sectors Identified

Companies include: Illumina Inc. (ILMN), Hologic Inc. (HOLX), Thermo Fisher Scientific, Inc. (TMO), Life Technologies Corporation (LIFE), Walgreen Co. (WAG), AmerisourceBergen Corporation (ABC), Express Scripts Inc. (ESRX), Agilent Technologies Inc. (A), ICON plc (ICLR), Cardinal Health, Inc. (CAH), MedAssets, Inc. (MDAS), CVS Caremark Corporation (CVS), Cepheid (CPHD) and many more.

In the following excerpt from the Medical Research, Diagnostic Substances and Life Science Tools Report, an expert analyst discusses the outlook for the sector for investors:

TWST: You also touched on M&A in this space. Is that going to be continue with Big Pharma taking over a lot of these smaller companies because they need the growth?

Mr. Muken: Yes, I think pharma has clearly had this plan for a while. They kind of buy in pipeline to a degree you can find differentiated R&D. I think we're seeing it across all aspects of health care. And then we had Thermo Fisher (TMO) and Life Technologies (LIFE) get together this year in our tools space; that is two very large players consolidating and really becoming a true market leader in life sciences.

We've seen the combination of Walgreens (WAG) and Alliance Boots, and then ultimately a minority interest in AmerisourceBergen (ABC) in our service complex - that's a very unique transaction that sort of argues more toward global health care and/or also signals the need for increased leverage on purchasing something like generics, where you are coming to a period where it may be harder to come by profitability. And I think you've seen Express Scripts (ESRX) and Medco get together in the PBM space.

Lots of large transactions; it's really evident of one, I think profits in some parts of health care where there is a lack of innovation or differentiation, and you are seeing commoditization argue for consolidation because you need scale.

But in other areas, it's really out of strength, where you're either taking two really complementary groups and putting it together for a unique business model like you have with Thermo Fisher, or you are trying to utilize what is also an environment where folks have a lot of cash that they're creating, and they've relatively clean balance sheets and you're utilizing the low interest rates to create value...

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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