Week of April 3, 2017 | Vol. 6, Issue 12
In This Issue
Featured Headlines
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.

FDA Approves Regeneron and Sanofi's Dupixent for Eczema
Regeneron, Sanofi to set Dupixent list price at $37,000

Regeneron Pharmaceuticals  Inc. and Sanofi said they would charge $37,000 annually in the U.S. for their newly approved eczema drug, a price the companies said they reached after months of negotiations with pharmacy-benefit managers.  The Food and Drug Administration approved the drug, called Dupixent, for U.S. sale on Tuesday.  Through their negotiations, the companies said they aimed to set a price the pharmacy-benefit managers, or PBMs, would find acceptable. PBMs administer prescription drug benefits for employers and insurers. In exchange, the companies sought, and in some cases received, assurances that the PBMs wouldn't implement coverage restrictions that could prevent patients from getting the drug, Regeneron CEO Leonard Schleifer said in an interview.
Dupixent will be one of the most closely watched drug launches this year, with analysts projecting it could reach $3.13 billion in global annual sales in 2020 if it gains favorable insurance coverage, according to analysts polled by FactSet.  Regeneron and Sanofi are still reeling from the disappointing launch of their anti-cholesterol drug Praluent last year. Many analysts say the drug flopped in part because of insurers' concerns that the $14,600 a year list price would be too costly, which led them to restrict coverage. A similar drug from  Amgen   Inc.  that also carried a high price tag also had disappointing sales.  Dr. Schleifer said the companies learned from that experience and took extra steps while setting the price for Dupixent. "I wanted to demonstrate that adults in the room can be responsible on both sides," Dr. Schleifer said.

Continue Reading at  Wall Street Journal
Starboard Wins More Board Seats, Replaces CEO at Depomed
Arthur Higgins joined pharmaceuticals maker as president, CEO and director, following the resignation of James Schoeneck

Specialty pharmaceuticals maker Depomed  Inc. has replaced its chief executive and named two new directors to its board after nearly a year of activist pressure from Starboard Value LP.  Depomed said Tuesday industry veteran Arthur Higgins joined the company as president, CEO and director, following the resignation of James Schoeneck from those positions.
The company also named William McKee, former CFO of Barr Pharmaceuticals LLC, and Gavin Molinelli, a partner at Starboard, to the Depomed board, replacing Samuel Saks and David Zenoff, who have resigned. James Fogarty will now serve as chairman. Shares in the company, which focuses on pain and other central nervous system conditions, fell 5.1% after hours to $9.40.
Tuesday's announcement adds to board changes late last year, when  Starboard won three seats. Now six of the nine Depomed board members are Starboard picks.  "We are pleased to have reached an agreement to work with Depomed," said Mr. Molinelli in prepared remarks Tuesday, hailing Mr. Higgins as an "excellent choice to lead Depomed."  "We are excited to have found such a qualified leader for the company," he said.  Mr. Higgins previously served as CEO of Bayer Healthcare and Enzon Inc., president of Abbott Laboratories pharmaceuticals division, and more recently as senior adviser to The Blackstone Group   "We have an opportunity to accelerate Depomed's journey as a leader in pain management and neurology as we maximize value for all shareholders," said Mr. Higgins.

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
 17 transactions totaling $317  million
 Supplies, Equipment & Services
 17 transactions totaling $1,783 million
 Healthcare IT & Managed Care
 4 transactions totaling $- million
 Healthcare Facilities & Distributors
 11 transactions totaling $92 million





Pharma & Biotech
27 private placements totaling $570 million
Supplies, Equipment & Services
19 private placements totaling $49 million
Healthcare IT & Managed Care
4 private placements totaling $24 million
Healthcare Facilities & Distributors
0 private placements


 Pharma & Biotech
 18 public offerings totaling $590 million
 Supplies, Equipment & Services
 8 public offerings totaling $314 million
 Healthcare IT & Managed Care
 2 public offerings totaling $149 million
 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 29, 2017 - Fierce Pharma
Mylan's FDA decision date for its knockoff of GlaxoSmithKline respiratory blockbuster Advair came and went Tuesday, with no word from the drugmaker or regulators. But Wednesday afternoon, Mylan finally said its copycat had been turned away.  Mylan didn't say why the product got a complete response letter (CRL), which is what the FDA calls its bad-news notifications on drug approvals. The company didn't say whether it's a short-term delay fixable with current data and information or a longer-term problem. Either way, however, that means some extra time for GSK to hang on to revenues from its leading med.  "Mylan is in the process of reviewing this response and will provide an update on its application as soon as practicable once it has completed its review and discussed the FDA's feedback with the agency," the company said in its  statement Mylan's candidate would have been the first potentially substitutable version of the GSK star. And the delay won't surprise some industry watchers-including Glaxo itself.

March 31, 2017 - Fierce Pharma
It's step-down day for GlaxoSmithKline CEO Andrew Witty, who's passing the baton to successor Emma Walmsley. And the transition marks the end of a nine-year tenure that saw him break with his peers-sometimes, to the tune of heavy criticism-more than once.  Witty hasn't been afraid to take some chances-at the dealmaking table,  bulking up  on vaccines and OTC products in exchange for assets in the red-hot cancer field; on the marketing front, eliminating doctor speaking fees and quotas for sales reps; and with the pipeline, pushing hard on a two-drug HIV combo that could imperil the company's market share if it fails.  And while it's too early to say whether-or just how much-some of those gambles will pay off, a few of his moves already look as though they may well have been worth the risk.  Take Glaxo's much-maligned low-margin,  high-volume strategy  in vaccines and consumer health, for instance. Some industry watchers balked when the company first struck the multibillion asset-swap deal with Novartis, figuring GSK couldn't come out on top by homing in on areas that offered little pricing power potential and left its pharma portfolio thin.  Witty's rationale, though? Stay far, far away from the kind of payer pressure that had put the squeeze on its sales-leader Advair, and avoid the price-hike pushback trend taking shape in the U.S.-ideas that may seem pretty good in today's climate to one-time naysayers. Glaxo has been able to capitalize on its vaccines and OTC beef-ups, too, vaccines revenue leaping 14% in 2016 and consumer revenue climbing by 9%.
 
FDA Approves Drug for Primary Progressive Multiple Sclerosis   
March 28, 2017 - Wall Street Journal
The Food and Drug Administration approved a multiple-sclerosis drug called Ocrevus, the first treatment for the most severe type of the disease, known as primary progressive MS.
The medicine, from Genentech Inc., is generically called ocrelizumab. Primary progressive MS affects about 15% of the estimated 2.3 million MS patients in the world. The patients with this severe type have watched for years as more than a dozen other treatments have emerged for other MS patients. The FDA also approved the drug for the more common type of MS.  Genentech plans to charge $65,000 a year for the treatment, likely adding fuel to the debate over drug prices. 
"This is an historic day for the MS community with the approval of the first-ever treatment for people living with primary progressive MS. This is a real game-changer," said Cyndi Zagieboylo, president and chief executive of the National MS Society. "The National MS Society hopes this is just the beginning of the development of the next generation of treatments for MS."  MS typically strikes people between the ages of 20 and 50, though it can begin far earlier, or as late as 75. Its course is highly unpredictable, hence the name of the more common form called relapsing-remitting multiple sclerosis, for which the drug also was approved. It can cause a wide range of symptoms, like loss of balance and poor coordination, fatigue and weakness. As the name suggests, it can go away and then flare up with little predictability.
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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