Week of May 22, 2017 | Vol. 6, Issue 19
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Thermo Fisher to buy Patheon for $5.2 billion to expand biopharma services
Thermo Fisher Scientific Inc
said on Monday it would buy Patheon NV
, a Dutch manufacturer of drugs for clinical trials, for $5.2 billion as it seeks to complement its offerings in production and services for the biopharma industry.
The offer price of $35 per share represents a premium of about 35 percent to Patheon's Friday close. Thermo will also assume $2 billion in net debt, putting the cost of the deal at about $7.2 billion for Patheon, which generated $1.9 billion in revenue last year.
Thermo Fisher, the world's largest maker of scientific instruments, also supplies raw materials used in formulating experimental drugs and had been doing business with Patheon.
Thermo Fisher Chief Executive Marc Casper, in a telephone interview, called the deal a "hand in glove fit to ... our fastest growing part of the business."
As drugmakers increasingly vie to shave costs from clinical trials, Patheon's drug manufacturing capabilities will help Thermo Fisher grab a bigger slice of the fragmented contract development and manufacturing market, which the company estimates to be about $40 billion.
Patheon has manufactured more products that won U.S. approval than any peer.
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GlaxoSmithKline aims for the whole consumer-health shebang with $10.3B Novartis JV buyout
Next March, GlaxoSmithKline will have the option to buy out Novartis' stake in the pair's industry-leading consumer health JV. And it may already be getting prepared.
The British drugmaker is getting its ducks in a row for an £8 billion ($10.3 billion) offer for its partner's 36.5% share, top shareholders
told The Sunday Times. Industry watchers say Novartis could use the extra dough to help fund a mega takeover-and word is, the potential target is AstraZeneca.
GSK declined to comment.
The one-two deal punch may seem far-fetched, with Novartis pledging to eschew such enormous mergers. But the GSK consumer JV move lines up with the company's previous statements, and its new CEO, Emma Walmsley, headed up that venture until her promotion in March.
A deal could also answer critics calling for some dramatic action from GSK, if not in the way some might have hoped. The news follows just a couple of days after one key GSK investor, Neil Woodford,
walked away
from the stock. Woodford, who had pushed for a companywide breakup that would set consumer health on its own, griped in a blog post that his viewpoint had been "ultimately ignored-repeatedly."
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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
10 transactions totaling $0
Supplies, Equipment & Services
19 transactions totaling $7,515 million
Healthcare IT & Managed Care
2 transactions totaling $0
Healthcare Facilities & Distributors
9 transactions totaling $429 million
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Pharma & Biotech
19 private placements totaling $199 million
Supplies, Equipment & Services
5 private placements totaling $31 million
Healthcare IT & Managed Care
3 private placements totaling $5 million
Healthcare Facilities & Distributors
1 private placement totaling $0
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Pharma & Biotech
9 public offerings totaling $464 million
Supplies, Equipment & Services
5 public offerings totaling $25 million
Healthcare IT & Managed Care
1 public offering totaling $173 million
Healthcare Facilities & Distributors
0 public offerings
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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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Argenx IPO haul tops out at $115M, 50% above initial goal
May 19, 2017 -
Fierce Biotech
Argenx's IPO fundraising
total has come to a stop at $114.7 million, more than 50% above its initial target. The final bump to the figure came when the underwriters snapped up all the shares offered in the overallotment.
Those late stock purchases added $15 million to the total and continued the pattern set in recent weeks. When argenx filed to list on Nasdaq late last month, it set the proposed maximum offering at $75 million. Given that argenx lacked insider support, has yet to generate phase 2 data on its lead asset and mainly wants money for autoimmune R&D, that would have been a tall order at certain times over the past 18 months. But argenx breezed past the initial fundraising goal.
Belgian-Dutch biotech argenx dialled up the number of shares it planned to offer from 3.6 million to 5 million and finally up to 5.9 million. With argenx pricing the shares at $17 a piece, that brought its gross total to the cusp of $100 million, a figure it has now surpassed by offloading the overallotment.
May 15, 2017 -
Wall Street Journal
Under the ACA, employers with as many as 50 workers could sign up for small-group plans through the Small Business Health Options Program, often called SHOP, where some employers could qualify for tax credits to lower premiums. As the exchange was originally envisioned, small employers could use the platform to make contributions to their employees' health coverage, allowing workers to pick which plans they preferred.
New Ebola Outbreak Hits Democratic Republic of Congo
May 15, 2017 -
Wall Street Journal
Health workers in the Democratic Republic of Congo were rushing to contain an outbreak of Ebola virus, scrambling military helicopters to deliver medical aid and ordering house-to-house searches for potential patients in a remote northeastern region.
The hemorrhagic fever has killed three people and infected more than a dozen others, health officials said Monday. This latest outbreak will test Congo's ailing health-care system, which ranks among most poorly equipped in the world, as well as international response mechanisms set up after an Ebola epidemic
swept West Africa in 2014
.
That outbreak, which claimed more than 11,000 lives, ended only last year, the World Health Organization said.
Health experts said the resurfacing of the virus in Congo was serious, partly because it took officials almost three weeks to identify the disease. That means it may have spread widely and makes it harder to trace people who have come in contact with identified or suspected patients.
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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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