As mergers and acquisitions continue to change the healthcare landscape, investment firm Goldman Sachs thinks at least six major healthcare companies as ripe for takeovers in the near future.
In a just-released report on publicly traded healthcare companies, Goldman named Anacor Pharmaceuticals, Clovis Oncology, Pacira Pharmaceuticals, Sage Therapeutics, Evolent Health and Brookdale Senior Living as companies that make attractive targets to buyers.
Only one on the list, Brookdale Senior Living, is a healthcare provider, while the rest are either drug companies or software firms.
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According to the report, Brookdale's stock has seen softer price growth due to a few factors including higher mortality from the past year's flu season and occupancy dips related to the company's integration of Emeritus, another operator of assisted living facilities.
Goldman Sachs said the firm expects the demand for senior living centers to grow in the long term and expects the company's struggles merging with Emeritus to eventually wear down.
Meanwhile, Goldman Sachs analysts rate software firm Evolent Health as an attractive takeover target due to how well its platforms align with the ongoing shift towards population health and value-based payment. Evolent's software helps track clinical data across a provider's patient pool.
"We think the company is uniquely positioned to benefit from the growing shift to fee-for-value, and its 2Q update highlighted strong growth fundamentals among existing clients as well as a robust pipeline of major health systems," the authors wrote.
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According to the report, healthcare stocks on the S&P 500 have recently underperformed, led by sell-offs in biotech and pharmaceutical firms.
"While we continue to be constructive on (healthcare) owing to strong new product cycles and a likely continued robust M&A environment, it might be prudent to become more stock selective as the macro environment potentially becomes more challenging," the authors wrote.
However, the analysts are still bullish on the sector and expect prices to climb by at least 15 percent.
Twitter: @HenryPowderly