Week of March 12, 2018 | Vol. 7, Issue 10
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Managing Director
Business Development

Jeremy C. Johnson
Managing Director
Head of M&A and Capital Advisory

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.
Health Insurer Cigna To Buy Express Scripts For About $54 Billion
The move follows the $69 billion merger of insurer Aetna Inc and one of Express Scripts' biggest rivals, CVS Health Corp, announced last December. 

The pharmacy benefits business, which tries to negotiate down the price of prescription medicines for large employers, has drawn fire from the Trump administration and Congress, who have questioned whether those discounts are really being passed on to consumers.  Together, the transactions would represent a massive consolidation of the market for managing employees' prescription drug benefits, prompting some experts to question whether they will be approved. Cigna and Express Scripts say the combination will lower costs for corporate clients by giving them more coordination between medical care and pharmacy benefits, particularly for pricey specialty drugs. "Our employer clients will be delighted with that," Cigna Chief Executive David Cordani said in an interview. 
It could help Cigna more closely manage how costly drugs are prescribed and delivered to patients, and fend off potential competition from new players such as Amazon.com.

C ontinue Reading at  Reuters.
Celgene Pays $101M To Work With Vividion On Hard-To-Drug Proteins
The four-year alliance tasks Vividoin with discovering drugs that interact with the ubiquitin proteasome system cells use to break proteins apart. 

Vividion broke cover last year with $50 million from ARCH, Versant and Cardinal Partners, technology from Scripps Research Institute and a focus on significantly expanding the druggable portion of the human proteome. The idea is to chemically annotate the proteome to show how drugs interact with proteins inside cells and, in doing so, discover new druggable targets.  Celgene sees potential in the platform. The big biotech is paying $101 million upfront in return for a stake in Vividion and a chance to work with the startup for the next four years. In that time, Vividion will apply its platform to a list of potentially important but tough-to-drug targets involved in the ubiquitin proteasome system. The goal is discover ligands and drug candidates related to the targets. The ubiquitin proteasome system tags proteins and organelles for destruction. The dysfunction of this process is linked to multiple diseases spanning oncology, inflammatory, neurodegenerative and other disorders. Celgene and Vividion are focused on those three broad therapeutic areas.  

C ontinue Reading at  Fierce Biotech.

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
 10 transactions totaling $17 million 
 Supplies, Equipment & Services
 22 transactions totaling $71,366 million
 Healthcare IT & Managed Care
 3 transactions totaling $1,242 million
 Healthcare Facilities & Distributors
 6 transactions

Pharma & Biotech
30 private placements totaling $747 million
Supplies, Equipment & Services
17 private placements totaling $123 million
Healthcare IT & Managed Care
14 private placements totaling $389 million
Healthcare Facilities & Distributors
2 private placements

 Pharma & Biotech
 18 public offerings totaling $810 million
 Supplies, Equipment & Services
 11 public offerings totaling $1,525 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 sub sectors.

For a complete trading comp analysis (including the individual equities that comprise the sub sectors), click on the table to the right or use the download link from the top of this newsletter. 

Note: data reflects prior week close.
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 9, 2018 -  Fierce Pharma
Drug-resistant bacteria are on the rise and could soon outpace our capacity to develop new antibiotics. An international team is trying to head this off with synthetic molecules to treat multiple superbugs. The team, from IBM Research and Singapore's Institute of Bioengineering and Nanotechnology (IBN), created a new class of synthetic polymers targeting five deadly drug-resistant bacteria. Although this approach is not new, others who have tried it have hit some roadblocks, such as non-biodegradability, which could lead to a toxic buildup of polymer in the body.

March 8, 2018 -  Fierce Pharma
Less than eight months after nabbing a 50% share of hot AstraZeneca drug Lynparza, Merck is back with another partnership-this time on Eisai's Lenvima.  Wednesday, the two companies said they'd inked a collaboration pact on the tyrosine kinase inhibitor that could bring Eisai up to $5.76 billion. In return, Merck will reap half of Lenvima's sales, both as a monotherapy and in tandem with its own cancer drug, Keytruda.

March 8, 2018 -  Fierce Biotech
Pfizer has been slowly but surely backing out of its $635 million armed antibody tech deal with CytomX in the last few months, and during the biotech's financials posted late yesterday, the final nail was drilled into this fruitless pact.  In 2013, the big pharma teamed up with the South San Francisco-based CytomX Therapeutics on a discovery program, putting the biotech's R&D platform to work on finding some next-gen antibody-drug conjugates for cancer targets.

March 8, 2018 -  Fierce Biotech
Big Pharma Sanofi and German CRO-biotech drug discovery hybrid Evotec are penning a deal that will see Sanofi license out a host of infectious disease assets to the biotech, with 100 staffers also moving into its R&D engine.  Sanofi is paying a one-time, upfront fee of €60 million ($74 million) to Evotec, a small sum, but one backed up with a promise to "provide significant further long-term funding to ensure support and progression of the portfolio," although exact financial details were not shared.

March 7, 2018 -  Fierce Biotech
San Diego biotech Aptose Biosciences looks set to have two of its drugs at the clinical trial stage this year and has just found a partner for a third candidate in a deal that could earn it more than $125 million in milestones. 

Caladrius snags heart disease stem cell therapy from Shire
March 6, 2018 - Fierce Biotech
Caladrius Biosciences picked up the worldwide rights to Shire's late-stage CD34+ stem cell therapy for refractory angina, while the big pharma will receive an undisclosed upfront fee, milestones and a royalty on product sales.  The New Jersey-based biotech now has its hands on preclinical and clinical data through phase 3 for the therapy as a treatment for refractory angina, as well as the relevant regulatory filings, according to a statement. It could become a treatment for patients with angina who have run out of therapeutic options.
CVS Readies $44 Billion Bond Sale
March 6, 2018 -  The Wall Street Journal
Pharmacy chain CVS Health Corp. plans to sell about $44 billion of bonds as soon as Tuesday to help pay for its $69 billion acquisition of health insurer Aetna Inc.  -the largest corporate bond sale in more than two years and a bellwether for the health of the corporate bond market. Yields of corporate bonds jumped in tandem with U.S. interest rates this year triggering a fall in bond prices and a decline in overall debt sales. Issuance of investment-grade corporate bonds amounted to $217 billion in January and February compared with $256 billion in the same period last year, according to data from S&P Global.

Attendo may sell Finnish healthcare operations ahead of government reform
March 5, 2018 - Reuters
Nordic health care company Attendo said on Monday it had started to evaluate options, including a potential divestment, for its Finnish healthcare and dental care business ahead of major reforms in the sector.  Attendo's primary care, specialist care and dental clinics in Finland had sales of 234 million euros ($288 million) last year. The assessment will be carried out during the first half of the year.
Current Opportunities Available Through Bourne Partners
Project Longhorn 
Sell-side M&A
Southeastern US  |  CDMO  |  Approximately $85mm Revenue  |   Approximately $8mm EBITDA

Project Ocean 
Sell-side M&A
Northeastern US  |  CDMO  |  Approximately $6mm Revenue  |   EBITDA disclosed with NDA

Project Magnolia 
Sell-side M&A
Mid-Atlantic US  |  CRO  |  Approximately $25mm Revenue  |   EBITDA disclosed with NDA

Project Limestone
Asset Divestiture
Southeastern US  |  ANDAs and Manufacturing Equipment  |  ANDA Revenue disclosed with NDA
An Overview of Events Hosted or Attended by the Bourne Partners Team

April 30 - May 6, 2018  | Quail Hollow Club Charlotte, NC
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. 


The Bourne Partners Team

Bourne Partners
550 South Caldwell Street
Suite 900
Charlotte, NC 28202