Valuation of debt instruments significantly decreased from May to August 2019, followed by further decrease during COVID-19<\/p>\n<\/h3>\n
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WEDNESDAY, March 9, 2022 (HealthDay News) — Debt valuation of dermatology private equity-backed groups (DPEGs) decreased prior to the COVID-19 pandemic and then decreased further during the pandemic, according to a study published online March 9 in JAMA Dermatology<\/em>.<\/p>\n Rohail Memon, from the Northwestern University Feinberg School of Medicine in Chicago, and colleagues conducted a cross-sectional study from Aug. 1, 2016, to Aug. 31, 2021, and examined public financial statements filed by business development corporations (BDCs) lending to DPEGs before and during the COVID-19 pandemic. Ten BDCs contained data on nine unique DPEGs; overall, there were 15 trackable DPEG debt instruments.<\/p>\n The researchers found that during the study period, the amortized cost of the loans for an individual DPEG varied from $1.7 million to $100 million. For many DPEGs, the valuation of debt instruments was stable until some were discounted starting in May 2018; a significant decrease was seen prior to the COVID-19 pandemic from May to August 2019 (\u00e2\u0088\u00921.4 percent). During the pandemic, there was another significant decrease from February to June 2020 (\u00e2\u0088\u00929.0 percent). A modest and significant improvement in debt valuations was seen after pharmaceutical companies announced effective COVID-19 vaccine candidates in November 2020 (2.3 percent), but they remained discounted.<\/p>\n “Dermatologists should be aware of the financial health of DPEGs, and the risks involved when considering selling their practice to or working for a DPEG,” the authors write.<\/p>\n