Week of September 11, 2017 | Vol. 6, Issue 35
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Gilead to buy Kite, maker of cancer treatments, for $11.9 billion
Drugmaker Gilead Sciences said it would buy Kite Pharma to bolster its aging portfolio with emerging cancer treatment.
The acquisition, Gilead's first major deal since 2011, is a departure from the path followed by the broader pharmaceutical industry, where - apart from Johnson & Johnson's $30 billion takeover
of the Swiss biotechnology company Actelion - the pace of acquisitions had largely slowed this year. Many drugmakers that had been busy with takeover activity in recent years have since been at work integrating their purchases. Under the terms of the agreement, Gilead will pay $180 a share in cash, a 29 percent premium to Kite's closing price on Friday. With the deal, Gilead would acquire Kite's new cancer-fighting method, which harnesses the body's immune system to attack malignant cells. Kite's most promising treatment, for non-Hodgkin lymphoma, is expected to receive government approval within the next year.
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Merck & Co snaps up three year-old German biotech firm for up to $550 million
U.S. pharma group Merck & Co
has acquired Rigontec, adding a new approach to its development of drugs that spur the immune system to attack tumors.
Merck & Co, maker of promising cancer immunotherapy Keytruda, agreed to pay 115 million euros upfront for the Munich-based firm and up to 349 million euros on top, depending on regulatory and commercial achievements, the two companies said in a statement on Wednesday.
Rigontec just started testing its most advanced compound RGT100 on humans in May, banking on a mechanism of action called RIG-I which is designed to trigger a long-term response of the innate immune system, the body's first line of defense against infections. Rival Bristol-Myers Squibb Co last month banked on a similar medical approach when it agreed to buy IFM Therapeutics for an upfront payment of $300 million.
Rigontec was founded in early 2014 as a spin-off of the University of Bonn and has raised close to 30 million euros from a number of life science investors.
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Device maker Teleflex boosts urology business with NeoTract buy
Teleflex Inc said on Tuesday it would buy privately held NeoTract Inc in its second billion-dollar deal in the past nine months, to strengthen its portfolio of urology devices.
Teleflex, which also makes emergency care, respiratory and cardiac devices, said the deal's value could rise to $1.1 billion based on sales of NeoTract's sole device, UroLift System, which targets a market worth more than $30 billion.
The deal is Teleflex's 23rd since 2008, according to Thomson Reuters data, and comes after its $1 billion acquisition of Vascular Solutions in December for its minimally invasive coronary and vascular devices. That deal closed in February. Teleflex will pay NeoTract $725 million when the deal closes, expected within the next 30 days, and an additional $375 million when it hits certain sales milestones through 2020. "While Teleflex is paying a high price, we view NeoTract as a unique asset given its highly differentiated technology, large potential market, rapid growth, long-term clinical data, and strong patent protection," Needham analyst Mike Matson wrote in a client note.
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Below are summaries and charts with the past week's transactions from the different healthcare sectors. For a detailed table showing data for each industry transaction click on any of the charts or use the download link above. Total transaction values are provided in USD millions.
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Pharma & Biotech
7 transactions totaling $871 million
Supplies, Equipment & Services
28 transactions totaling $1,879 million
Healthcare IT & Managed Care
4 transactions totaling $207 million
Healthcare Facilities & Distributors
14 transactions totaling $392 million
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Pharma & Biotech
18 private placements totaling $483 million
Supplies, Equipment & Services
8 private placements totaling $73 million
Healthcare IT & Managed Care
2 private placements totaling $13 million
Healthcare Facilities & Distributors
5 private placements totaling $57 million
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Pharma & Biotech
12 public offering totaling $1,932million
Supplies, Equipment & Services
6 public offerings totaling $226 million
Healthcare IT & Managed Care
3 public offering totaling $1,597 million
Healthcare Facilities & Distributors
1 public offering totaling $0
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 Each week, w
e provide updated trading
comps for leading comp
anies from numerous healthcare subsectors.
To the right you will see a high-level breakdown of median revenue and EBITDA multiples for each of the specific subsectors
For a complete trading comp analysis (including the individual equities that comprise the subsectors), click on the table to the right or use the download link from the top of this newsletter.
Note: data reflects prior week close.
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RECENT INDUSTRY HEADLINES
A Sampling of Relevant Industry Headlines from the Last Week
Below are snippets from relevant industry news articles from the past week. For additional information or the article's complete text, click the headline link to view the original publication.
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Boehringer, Gubra strike backloaded $300 million obesity deal
September 8, 2017 - Fierce Biotech
Boehringer Ingelheim has committed
up to €250 million ($300 million) to work with Gubra on obesity treatments. The deal gives Boehringer access to Gubra's expertise in the design, synthesis and preclinical testing of therapeutic peptides. Ingelheim, Germany-based Boehringer is paying an upfront fee of undisclosed size and committing to up to €250 million all told to access a potential source of peptides that regulate food intake. That focus continues Boehringer's longstanding and active interest in developing drugs against obesity and related cardiometabolic diseases. Not all of these bets have paid off-Boehringer's work with Vitae Pharmaceuticals ran aground-but through its own research and collaboration with Zealand Pharma it continues to build out its cardiometabolic disease pipeline.
Fortive to buy radiation safety company Landauer for $770 million
September 6, 2017 - Reuters
Fortive Corp said on Wednesday it would buy Landauer Inc, a provider of radiation safety and outsourced medical physics services, for about $770 million, including debt. Landauer's shares were up 12.6 percent at $69.10 in premarket trading, topping the offer price of $67.25. Fortive's offer represented a 9.6 percent premium to the stock's closing price on Tuesday. Landauer would be a part of Fortive's field solutions platform, which includes its Fluke and Qualitrol businesses, that make test and measurement tools and precision equipment for utilities, power companies and other industries.
Takeda joins CAR-T chasing pack with Noile-Immune alliance
September 5, 2017 - Fierce Biotech
With CAR-T therapies now reaching the market, Japanese drugmaker Takeda has made a play to grab a slice of the pie via a deal with biotech startup Noile-Immune.
The agreement gives Takeda a line into the work of Professor Koji Tamada at Yamaguchi University in Japan, who is a founder and chief scientific and medical officer at Tokyo-based Noile-Immune and spent 13 years in the U.S. working at the Mayo Clinic and Johns Hopkins University.
OrbiMed rolls out its third Asia biopharma fund with $551M up for grabs
September 5, 2017 -
Fierce Biotech
OrbiMed has launched its third Asia-focused biopharma and healthcare fund with more than half a billion dollars' worth of private equity.
OrbiMed Asia Partners III comes to life with around $551 million in capital commitments and builds on its previous funding efforts, which have seen around $2 billion injected into a variety of Asian healthcare companies and services. Asia Partners III will "invest broadly" across the Asian healthcare industry, with a focus on growth stage product- and services-oriented companies in China and India, the VC says in a statement.
Germany's Merck considers sale of consumer health business
September 5, 2017 - Reuters
Germany's Merck KGaA is considering selling its consumer healthcare business which has sales of $1 billion a year to help fund more research into prescription drugs and amid declines in the company's separate liquid crystal business.
The company said on Tuesday that to remain competitive the consumer healthcare business would need further investment and therefore it was considering a sale or strategic partnership instead, adding that a review process was at an early stage with a final decision expected to be made early next year.
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UPCOMING EVENTS
An Overview of Events Hosted or Attended by the Bourne Partners Team
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2017 Contracting & Outsourcing Conference
September 14-15, 2017 | New Brunswick, NJ
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7th Annual Global Healthcare Executive Summit
October 4, 2017 | Charlotte, NC
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As an international, healthcare-focused merchant bank and financial advisory firm, we provide world-class services and capital to middle-market healthcare companies around the globe. We aim to keep our clients well-informed of healthcare news and events. With this additional insight in mind, together, we can recognize trends and opportunities that benefit our clients. We hope that you will reach out to Bourne Partners to help execute your healthcare operational and transactional needs. To learn more about our firm, visit our website or utilize the links below to engage with us on social media.
Sincerely,
The Bourne Partners Team
Bourne Partners
550 South Caldwell Street
Suite 900
Charlotte, NC 28202
704-552-8407
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