Sam Isaly, the founder and managing partner at private equity firm OrbiMed Advisor, was the subject of the Tuesday morning keynote interview at The Deal LLC's Healthcare Dealmaking Symposium.
After discussing the size and structure of his firm, Isaly spoke about a novel way that OrbiMed is approaching M&A in the industry.
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"In mid-2006, we identified 30 companies that we saw as potential
targets and put them in a basket. We then entered into a total return
swap with Goldman on the basket -- so far roughly 40% to 50% of the basket
has been acquired -- so we're very happy with our batting average.
"Healthcare M&A exploded in July 2008," he continued. "In that
month there were eight deals, compared with a total of six in all of the
prior six months."
When the conversation turned to the duo of recent blockbuster deals (Pfizer Inc.'s [NYSE:PFE] acquisition of Wyeth [NYSE:WYE] and Merck & Co.'s [NYSE;MRK] purchase of Schering-Plough [NYSE:SGP]), Isaly
commented that "we're not a bit surprised on the Merck acquisition.
"I'm not too surprised to see those deals," he continued. "Over the
last two months, the CEOs of both acquirers had changed their language
and the verbs they used when speaking about acquisitions."
Isaly also had some contrarian views about healthcare reform, saying
that despite much rhetoric, "American's are fairly happy with their
healthcare. Yes, there are millions of people without healthcare, but
most of them are between 18 and 25 years old. They don't want it and don't
want to pay for it." - George White
