Specialty Pharmaceutical Industry Trading Multiple Analysis

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Both branded and generic specialty pharmaceutical companies have recently offered unique growth opportunities over both the recent long and short terms.  The last 24 months have seen tremendous growth in branded spec pharma value, which has translated to significant increases in EBITDA multiples, which are currently over 15x.  However, the rapid growth has recently started to slow which may signal the beginning of a normalization period.  Nevertheless, we believe that both branded and generic spec pharma will retain above market growth even after returning to historical norms.

Year-to-date an index of branded specialty pharmaceutical companies (comprised of Allergan, Auxilium Pharmaceuticals, Ipsen, Jazz Pharmaceuticals, Paladin Labs, Salix Pharmaceuticals, Santarus, Shire, The Medicines Company, UCB, United Therapeutics, and Valeant) have increased in value over 36% and doubled the return of the S&P 500.  Likewise, an index of generic specialty pharmaceutical companies (comprised of Actavis, Akorn, Hi-Tech Pharmacal, Hikma Pharmaceuticals, Impax Laboratories, Lupin, Mylan, Perrigo Company, and Teva Pharmaceutical) has increased in value over 26% and significantly outperformed the S&P 500 as well. (see below for more details).

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Download the full report here.

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About Bourne Partners

As a healthcare-focused merchant bank, Bourne Partners provides financial advisory, direct investment, alternative assets and management consulting services to our client-partners. We play an active role in helping businesses grow by creating long-term, profitable relationships that extend beyond single transactions. It is our focus on relationships and long-term results that has yielded us an impeccable track record of client satisfaction . Our direct and indirect investments in sector-leading companies – often through our relationships with top-tier Private Equity funds – allow us to learn about the best-of-the-best from the inside and apply that knowledge to the companies we serve. At Bourne Partners, we operate within a specific set of core boundaries: integrity, accountability, teamwork, loyalty and commitment are the driving forces behind everything we do.
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