Week of March 13, 2017 | Vol. 6, Issue 9
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GOP Health Plan Advances After Clearing Two House Committees
Republican-led panels approve measures to alter the Affordable Care Act, but opposition remains strong
Republicans advanced legislation through two House committees on Thursday as part of their goal to dismantle the Affordable Care Act, but signs of discord spread around the capital as conservative lawmakers warned this version of the health-law overhaul won't pass.
On party-line votes, the committees on Energy and Commerce and Ways and Means approved measures repealing major parts of the 2010 health law, known as Obamacare, with the goal of holding a floor vote later this month.
Conservatives fired warning shots at Republican leaders in an open challenge to House Speaker Paul Ryan (R., Wis.), who said Republicans could either line up behind the House bill or renege on their promise to repeal the law. "It really comes down to a binary choice," Mr. Ryan said. "This is the chance, and the best and only chance we're gonna get." Conservatives disputed that assessment, going public with concerns that their leaders' approach would create a new entitlement program centered on refundable tax credits and saying the bill should instead aim at reducing premiums and other costs. The first warning flare of the day was sent up Thursday morning by Sen. Tom Cotton (R., Ark.), who wrote on Twitter that the current House bill wouldn't pass the Senate.
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Trump to Nominate Scott Gottlieb to Lead FDA
Doctor has promoted views that in some cases would mean less regulation from the agency
President Donald Trump plans to nominate Scott Gottlieb, a conservative thinker and medical doctor with previous government experience, to run the Food and Drug Administration, the White House said Friday.
Dr. Gottlieb, who has ties to the drug industry, previously served as deputy FDA commissioner under President George W. Bush.
Dr. Gottlieb also is a frequent contributor to The Wall Street Journal opinion pages and a prolific writer on FDA topics. He has promoted provocative views that in some cases would mean less regulation from the nation's leading medical-products and food-supervisory agency. His views appear aligned with those of the Trump administration, especially since Dr. Gottlieb generally favors faster product approvals. Mr. Trump has described the FDA product-approval process as "slow and burdensome." Dr. Gottlieb supports the core mission of the FDA, and he has long experience with the medical and legal principles he would deal with in the job, which likely would ease his path to Senate confirmation. He is a cancer survivor who is a 1994 graduate of Wesleyan University and holds a 1999 M.D. degree from the Mount Sinai School of Medicine in New York. Dr. Gottlieb wins plaudits from people of different political backgrounds. Kavita Patel, a doctor and former Obama administration official now with the Brookings Institution, said, "I found that even when I would occasionally disagree with him on policy, I appreciated that he would take the time to listen."
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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
16 transactions totaling $339
million
Supplies, Equipment & Services
14 transactions totaling $37 million
Healthcare IT & Managed Care
5 transactions totaling $220 million
Healthcare Facilities & Distributors
14 transactions totaling $- million
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Pharma & Biotech
22 private placements totaling $285 million
Supplies, Equipment & Services
15 private placements totaling $125 million
Healthcare IT & Managed Care
9 private placements totaling $120 million
Healthcare Facilities & Distributors
0 private placements
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Pharma & Biotech
6 public offerings totaling $116 million
Supplies, Equipment & Services
6 public offerings totaling $591 million
Healthcare IT & Managed Care
3 public offerings totaling $- 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 presented in chronological order. For additional information or the article's complete text, click the headline link to view the original publication.
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March 6, 2017 -
Wall Street Journal
In the race to develop the next wave of drugs that use the immune system to fight cancer, scientists scurry up and down escalators in an old department store here.
Their biotechnology company, Incyte Corp., set up shop in a former John Wanamaker store on the outskirts of Wilmington in 2014. Escalators that once ushered shoppers to home furnishings now take researchers to labs that are among the most closely watched in drug development, as Incyte attempts to develop a new generation of cancer immunotherapies.
Existing immunotherapies including
Merck
& Co.'s Keytruda and
Bristol-Myers Squibb
Co.
's Opdivo have transformed cancer treatment, boosting average survival rates in lung and skin cancers. But the current immunotherapies don't benefit all patients-a limitation spurring the industry to hunt for new ways to push immune cells to destroy tumors. Companies big and small are racing to develop these new medicines, which analysts say could help boost global cancer immunotherapy sales to more than $40 billion a year by the middle of the next decade, from more than $6 billion in 2016. The field is so hot that activist investors including Carl Icahn recently bought shares in Bristol-Myers out of interest in the company's immunotherapies and other drugs.
Thwarted buyer Sanofi tries its hand at a $2.1B European generics sale: report
March 8, 2017 -
Fierce Pharma
After losing out on two sizable deals, Sanofi CEO Olivier Brandicourt recently said his company wasn't looking to make any big M&A moves right away. Instead, Sanofi might be looking to slim down by prepping the sale of its European generics unit, according to a new report.
The French drugmaker wants to hire advisers by the end of this month and conduct an auction after the summer for a deal estimated to be worth about €2 billion ($2.1 billion), sources
told
Reuters.
News of a potential sale comes after Brandicourt last month said his company is "not in a hurry to do M&A." That represented a significant change from the company's actions over the last year. Sanofi made several moves during the frenzied Medivation deal fray, only to be beaten out by Pfizer with its $14 billion offer. Then, Sanofi was reportedly in talks to buy Actelion, but that company ultimately went to Johnson & Johnson for $30 billion. Since joining Sanofi in 2015, Brandicourt has kicked off a strategic review and embarked on a strategy to build around five global business units: general medicines and emerging markets, specialty care, diabetes and cardiovascular, vaccines outfit Sanofi Pasteur and animal health group Merial.
March 7, 2017 - Wall Street Journal
For health-care companies,
the new House Republican proposal to replace the Affordable Care Act carries significant risks, as it would likely mean a decline in insured patients and continued worries about an unstable market.
Insurers, hospitals and medical-device manufacturers are still parsing the details of the draft legislation, which could change considerably as it moves through the House and Senate, and they are applauding moves like the elimination of some taxes. But the proposal's pullbacks on Medicaid and federal insurance subsidies could significantly reduce the number of people with health coverage over time, analysts and industry officials said, a serious problem for health-care providers and insurers.
Insurers also suggest the proposal isn't likely to end concerns about the future of individual insurance markets that have had large premium increases and insurer departures. Insurers have said they are losing money after drawing a too-high proportion of unhealthy enrollees with costly care needs. "Right now, we have a market that is incredibly unstable and is really on fire," said Tom Policelli, chief executive of Minuteman Health, which offers marketplace plans in Massachusetts and New Hampshire. "This bill does not put out the fire."
March 10, 2017 -
Fierce Pharma
Sure to add fuel to the fiery U.S. drug pricing debate, new work from several health policy experts showed that pharma makes more from platinum pricing in the U.S. than it spends on research around the world.
Published in Health Affairs, the
study
found a 59% spread between the average prices for the world's 20 top-selling meds in other developed countries and those in the U.S. In other words, a drug that costs $41 in other countries costs $100 in the U.S.
This isn't a premium that can be argued away with drug rebates, either. The study compared U.S. net prices-after rebates and discounts-to list prices in other developed countries. All told for 2015, that U.S. premium created $116 billion in revenue for 15 of the world's top drugmakers, compared with $76 billion in global R&D spending from the group.
So, as the researchers point out, lowering the total U.S. pricing premium just to match that $76 billion would put $40 billion back in the hands of U.S. taxpayers and patients. Even that rationale leaves the U.S. on the hook for funding global R&D. And the researchers' analysis can't answer whether the U.S. should be paying for the world's drug research, co-author Peter Bach told FiercePharma.
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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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