NEW YORK — The chilly first months of 2018 brought with them a flurry of biopharma deals. Celgene in January snapped up CAR-T specialist Juno Therapeutics for $9 billion on the same day Sanofi announced it would be taking over hemophilia drugmaker Bioverativ for $11 billion. By springtime, the industry saw one of its largest acquisitions ever in Takeda's $62 billion purchase of Shire.

Though the M&A storm has calmed down slightly, 2019 should be another active year for life sciences dealmaking — particularly in the biotech, payer, outsourced services and healthcare IT arenas, according to some major investment bankers presenting at the Forbes Healthcare Summit in New York.

"It's probably the most exciting time that I've seen in healthcare dealmaking in general, just given all the new innovative technologies out there [and] the amount of capital that's in the marketplace," Omid Ahdieh, head of healthcare services investment banking at Wells Fargo Securities, said during a Thursday panel discussion.

To Ahdieh's point, financial data firm Pitchbook found healthcare startups received $26 billion in venture capital funding this year. Thomas Sheehan, head of global healthcare investment banking at Bank of America Merrill Lynch, noted too that the average premium on biotech deals has been 60%, compared to 30-40% in other sectors.

While it's difficult to predict how long that "biotech bubble" will last, Sheehan said he's relatively confident in the state of the sector and expects next year's M&A deal value to surpass the three-decades-long high seen in 2018.

Piqued interest from private equity 

The confidence isn't just in biotech either. Cheri Mowrey, head of healthcare services investment banking at Morgan Stanley, said private equity players will likely be investing billions more into the larger healthcare space, which should keep valuations stable at least in the near term.

But where exactly would that money go?

Mowrey's betting on healthcare IT companies due to the sheer number of transactions that have recently taken place. Last month, for instance, Healthcare Dive reported that multiple parties submitted bids to acquire athenahealth, a services provider for health systems, before Veritas Capital and Evergreen Coast Capital snatched it up for $5.7 billion.

The acquisition, which came on the heels of a rough year for athenahealth, underscores private equity's craving for these types of businesses. Over the last 12 months, Sheehan has noticed private equity beating out strategic buyers at healthcare asset auctions.

That's not to say strategics aren't playing a significant role in healthcare deals, however.

"Our equity capital markets partners are frustrated because every time we go to get a healthcare IT IPO ginned up and ready to take to public market, a strategic comes in and offers to buy the company. I think that that is one of trends that will continue in the year forward," Mowrey said.

Ahdieh also believes healthcare services, namely payer services, will receive a lot of interest and investment next year. But as that investor base widens and diversifies, he said it's going to challenge dealmakers to be more creative in order to lock down transactions.

"On the healthcare services side, there is a significant appetite not only from traditional banks, as lenders, [but] from institutional investors, from high yield bond investors, all the way through private equity," he said.

Fortunately for those groups, there are plenty of assets ready to be gobbled up.

Sheehan predicts the offloading of non-core assets, a prominent trend among big pharmas over the last few years, will be a major catalyst for dealmaking in 2019.

The fact that many big drugmakers have shown an interest in bolt-on M&A suggests deals will be high in number but not necessarily price.

"There is a misconception in the healthcare industry that once you see one or two really large mega deals, that means you're going to see 10 more follow it. And I do think that won't necessarily be the case in healthcare going forward," Ahdieh said.

"Just because it made sense for two companies to come together doesn't mean that there's a series of activity that will come out from that," he added. "And we've had several speakers, CEOs, here today that have done very interesting, creative transactions where they haven't necessarily bought 100% of the company. So it goes back to finding the right opportunities that are strategic and helping you grow the business."

Catalysts continue, for the most part

Though their outlooks for 2019 were mostly positive, Ahdieh, Mowrey and Sheehan conceded there are a few deal metrics that may decline compared to 2018.

All three foresee fewer initial public offerings for healthcare companies. Additionally, Ahdieh and Sheehan see venture capital for healthcare startups decreasing, while Ahdieh and Sheehan see overall M&A value falling.

Still, they argue many of the catalysts that spurred the recent bluster of biopharma and healthcare transactions to continue over the next couple years. Among those: a greater emphasis on innovation and R&D, restructuring based around core businesses, and substantial venture capital and private equity investments that allow companies to focus on longer-term goals and strategies.

"We're seeing significant activity with investors in their portfolios. They're looking to a liquidate some of the better performing assets that they've gotten," Ahdeih said. "Multiples of valuation levels are at an all time high, so ... if you've got a good performing company that you own, it's a good time to sell."

"Agreed," Mowrey said, "and a lot of the selling has been done in the last two years."

"Another big opportunity this year will be for capital deployment into private companies," she added. "Hopefully we'll have a robust IPO market, but certainly I think we'll have a robust VC market."