Week of March 27, 2017 | Vol. 6, Issue 11
In This Issue
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Recent Industry Transactions
Industry Trading Comps
Recent Industry Headlines

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Complete Transaction Tables
Full Trading Comp Analysis

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Jeremy C. Johnson
Managing Director
Pharma & Consumer Health
jjohnson@bourne-partners.com

Xan Smith
Managing Director
Business Development
xsmith@bourne-partners.com
INDUSTRY M&A SNAPSHOT

Above is an overview of recent industry M&A activity. For additional information, see the charts below or follow the link to the left to download complete transaction tables broken out by industry subsectors.

See below for additional information about industry trading comps and transaction relevant articles from the past week.

Sanofi on verge of $1B-plus deal for arthritis-focused biotech Flexion: source
Sanofi is in talks to buy Flexion Therapeutics, a Boston-area biotech with its lead product now awaiting FDA approval, for more than $1 billion in cash, according to a source close to the deal.

Flexion's board has accepted Sanofi's non-binding offer, with a price in the "mid-30s" per share, the source said, with a final price pending due diligence. Flexion stock closed Wednesday at $19.68.  Flexion's knee injection for osteoarthritis, Zilretta, would fit right in with Sanofi's biosurgery division, which markets its own osteoarthritis injectable, Synvisc. And some of Flexion's staffers know that product well; marketing VP Mark Fraga and medical affairs VP Scott Kelley, M.D., jumped to Flexion last year from jobs handling Synvisc at Sanofi.  Accepted for review in December, Zilretta could win FDA approval in October.  Sanofi refused to comment on the potential deal. Flexion spokesman Scott Young said he "can't comment on market speculation or rumors."
"We're pursuing an independent strategy to commercialize our lead product Zilretta," Young said Thursday.  The talks are ongoing and the transaction may not come to fruition, the source said. But if due diligence goes well and a binding offer is accepted, the cash deal could close quickly, giving Sanofi's Genzyme unit several months to gear up for the Zilretta launch.  Zilretta is a sustained-release corticosteroid first up for approval for use in the knee. Analysts have suggested it could bring in $500 million to $600 million in peak sales, and perhaps hit blockbuster status if it wins indications for use in other joints.

Continue Reading at  Fierce Pharma
White House Opens Door to Democrats in Wake of Health-Bill Failure
Move signals Trump administration is fed up with many factions in House Republican conference

The White House sent a warning shot to congressional Republicans that it may increase its outreach to Democrats if it can't get the support of hard-line conservatives, a potential shift in legislative strategy that could affect drug prices, the future of a tax overhaul and budgetary priorities.  Days after the  House GOP health bill collapsed  due to a lack of support from Republicans, White House Chief of Staff Reince Priebus brought up the idea of working with Democrats multiple times, leaving little doubt that the White House intended to send a message to the hard-line Republican flank.  "This president is not going to be a partisan president," Mr. Priebus said on "Fox News Sunday." He said that while "I think it's time for our folks to come together, I also think it's time to potentially get a few moderate Democrats on board as well." President Donald Trump could face hurdles in enacting his agenda if he can't broaden his coalition, even though Republicans control both chambers of Congress. Markets have rallied since his election on the prospects that he would drive through tax cuts, boost infrastructure spending and cut regulations, giving a jolt to the economy. The unraveling of the health bill last week calls into question how easily that broader agenda will be achieved, and could lead some investors to moderate their enthusiasm. The health bill was pulled from the House floor shortly before the markets closed on Friday, meaning that Monday will provide a more complete picture of investor sentiment.

C ontinue Reading at  Wall Street Journal.

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.



 Pharma & Biotech
 14 transactions totaling $6,270  million
 Supplies, Equipment & Services
 14 transactions totaling $62 million
 Healthcare IT & Managed Care
 4 transactions totaling $8 million
 Healthcare Facilities & Distributors
 10 transactions totaling $73 million





Pharma & Biotech
15 private placements totaling $142 million
Supplies, Equipment & Services
14 private placements totaling $116 million
Healthcare IT & Managed Care
7 private placements totaling $21 million
Healthcare Facilities & Distributors
0 private placements


 Pharma & Biotech
 13 public offerings totaling $397 million
 Supplies, Equipment & Services
 9 public offerings totaling $928 million
 Healthcare IT & Managed Care
 0 public offerings
 Healthcare Facilities & Distributors
 0 public offerings

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.
RECENT INDUSTRY HEADLINESRecentIndustryHeadlines
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.
March 21, 2017 - Fierce Pharma
Another legal salvo has been fired against top insulin makers, accusing them of colluding on prices, but this class action suit also targets pharmacy benefit managers CVS, Express Scripts and UnitedHealth's OptumRx, claiming they were part of the alleged scheme.  The  lawsuit  was filed in federal court in New Jersey last week, and four individual plaintiffs were joined by the Type 1 Diabetes Defense Foundation, a nonprofit group that supports patients with Type 1 diabetes. The suit alleges violations of ERISA, the Employee Retirement Income Security Act.  The suit alleges the drugmakers significantly ratcheted up their list prices on their insulins, raising them in lockstep with one another, then shared the additional revenues with the PBMs through rebates.  "The skyrocketing cost of insulin cannot be explained away with typical drug company rationalizations for high costs," the 300-plus page lawsuit reads. "Instead, the increased list prices are the result of a scheme and enterprise among the three dominant drug manufacturers of insulin ... and the three largest Pharmacy Benefit Managers, CVS Health, Express Scripts, and OptumRx." 

March 18, 2017 - Fierce Pharma
Johnson & Johnson's Xarelto (rivaroxaban), Boehringer Ingelheim's Pradaxa (dabigatran) and Pfizer and Bristol-Myers Squibb's Eliquis (apixaban) all topped warfarin on some safety measures in a recent real-world study. But only one of the next-gen anticoagulants showed it could save the healthcare system hundreds of dollars per patient in the process.  According to  data  from a study of U.S. Medicare patient records, comparing the newer meds with standby warfarin, Pradaxa patients displayed a similar risk of stroke but a significantly lower risk of major bleeding; Xarelto patients were at a significantly lower risk of stroke but significantly higher risk of major bleeding; and Eliquis patients had a significantly lower risk of both. The analyses were presented Friday and Saturday at the American College of Cardiology annual meeting.  The differences in cost  read-through  were noticeable, too. In stacking up the costs from major bleeding-related events, the study found that Xarelto racked up $542 per patient, compared with warfarin's $500, or $42 more. Pradaxa, in its own head-to-head against warfarin, cost $367 to warfarin's $452, saving $85. But Eliquis took the cake, posting a $286 charge against warfarin's $537 to post $251 in savings.  "When I sit back and I look at this from a triple aim perspective, what they want us to do is design healthcare systems and healthcare delivery that improves quality, improves safety, decreases costs and improves patient or customer experience," lead study investigator Alpesh Amin said in an interview. "It appears in the real world that apixaban is doing that."
 
Drug Industry Launches TV Ads Lambasting Cuomo's Pricing Plan 
  March 22, 2017 - Wall Street Journal
On the heels of a presidential election in which the pharmaceutical industry was a popular target, Gov. Andrew Cuomo proposed new state controls over drug prices.  Now the industry is punching back.  On Wednesday, the industry's largest trade group began running television ads in New York lambasting the proposal, a campaign that cost $100,000, people involved said. The ads, funded by the Pharmaceutical Research and Manufacturers of America, escalate a feud with the Democratic governor that Mr. Cuomo largely has welcomed as he seeks to position himself as the latest politician to take on drug prices. The group previously had begun an online campaign against the plan.  Airing in several upstate counties, the television ads describe Mr. Cuomo's proposal and similar legislation put forth by the Assembly's Democratic majority as a tax from "New York City politicians" that would raise out-of-pocket costs and weaken health-care quality, citing a Union College study. "Tell your legislators to reject the tax on prescription drugs," a narrator states in the ads. The ads are partly intended to pressure Republicans, who run the state Senate, to keep the measure out of the budget, a person familiar with the ad campaign said. The Republicans have been reluctant to embrace the governor's plan fully but haven't ruled out all of it.
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

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