Week of September 3, 2018 | Vol. 7, Issue 35
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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.
Medical Device Maker Stryker To Buy K2M Group For About $1.4 Billion
Stryker Corp will buy smaller rival K2M Group Holdings Inc, adding K2M's fast-growing spinal implant technology to its business. 

Stryker's offer of $27.50 per K2M share represents a premium of 26 percent to K2M Group's Wednesday closing price. K2M shares rose 25 percent to $27.27 in early trading, while those of Stryker were marginally down at $170.03.  "If one were to have asked us where we would have expected Stryker's next tuck-in deal to materialize, we would have pointed to Spine (division)," Leerink analyst Richard Newitter said. Analysts said Stryker's spine unit, which accounted for 6 percent of the company's $3.32 billion second-quarter revenue, has been struggling of late. K2M, which raked in nearly $300 million in 2017, is a relatively small player in the medical devices market dominated by companies such as Johnson & Johnson and Zimmer Biomet, but has been rapidly capturing market share.

C ontinue Reading at Reuters .
HCA Healthcare To Buy North Carolina's Mission Health For $1.5 Billion
HCA Healthcare Inc,  the biggest hospital operator in the United States, said it would buy Mission Health, a non-profit health system in North Carolina.

Under the deal, Nashville, Tennessee-based HCA will own Mission Health's hospitals in Asheville, Marion, Franklin, Brevard, Spruce Pine and Highlands.  All proceeds from the deal will go to Dogwood Health Trust of Western North Carolina, Mission Health said in a statement. HCA would pay $430 million over five years to cover capital expenditure for the completion of the Mission Hospital for Advanced Medicine, building a replacement hospital for Angel Medical Center and a new behavioral health hospital.  It will also contribute $25 million along with Mission Health for a $50 million innovation fund.  Mission Health operates six hospitals and several outpatient and surgery centers.

C ontinue Reading at Reuters .
Emergent BioSolutions To Buy Narcan Maker Adapt for $735 Million
After its $270 million deal for PaxVax, the frequent government contractor is buying Adapt Pharma and its opioid overdose-reversing drug Narcan.
The Maryland-based firm is paying $635 million upfront and up to $100 million for potential sales-based milestones through 2022. Narcan, the only FDA-approved nasal spray of naloxone, has been on the market since 2016. Emergent  estimates the drug will contribute  $200 million to $220 million to the company's top line in 2019. In addition to Narcan and an opioid overdose-focused pipeline, about 50 Adapt employees will come aboard Emergent. The deal, plus the recently announced PaxVax buyout, will vault Emergent to $1 billion in revenue by 2020, a goal the company has been looking to achieve through M&As focused on public health threats. PaxVax, which has typhoid fever vaccine Vivotif and cholera vaccine Vaxchora, could deliver around $70 million to $90 million next year, per Emergent's estimate. Narcan could see more upside since President Donald Trump declared the opioid crisis a public health emergency last October. The U.S. Surgeon General, Jerome Adams, in April issued a public health advisory urging more Americans to carry naloxone, which can be lifesaving for people who overdose. After that, more first responders and police officers are carrying naloxone products with them.

C ontinue Reading at Fierce Pharma .
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
 18 transactions totaling $1,574 million
 Supplies, Equipment & Services
 15 transactions totaling $1,967 million
 Healthcare IT & Managed Care
 3 transactions
 Healthcare Facilities & Distributors
 9 transactions totaling $45 million

Pharma & Biotech
33 private placements totaling $1,062 million
Supplies, Equipment & Services
25 private placements totaling $67 million
Healthcare IT & Managed Care
10 private placements totaling $182 million
Healthcare Facilities & Distributors
4 private placements totaling $53 million

 Pharma & Biotech
 12 public offering totaling $1,109 million
 Supplies, Equipment & Services
 3 public offerings totaling $487 million
 Healthcare IT & Managed Care
 0 public offerings 
 Healthcare Facilities & Distributors
 3 public offerings totaling $34 million

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.
August 30, 2018 -  BioSpace
United Therapeutics Corporation (NASDAQ: UTHR) ("United Therapeutics") today announced that it has closed the merger of SteadMed Ltd.  (NASDAQ: STDY) ("SteadyMed") with a subsidiary of United Therapeutics. Pursuant to the merger, United Therapeutics acquired all of the outstanding ordinary shares of SteadyMed. As a result of the merger, SteadyMed ordinary shares are no longer publicly traded on the NASDAQ Stock Market.

August 30, 2018 - Fierce Biotech
10x Genomics has acquired its first startup since coming out of stealth just over three years ago-the epigenetics startup Epinomics-and plans to add its technology to its single-cell sequencing product set to launch by the end of the year, aimed at biotech researchers and pharma companies.
August 28, 2018 -  Fierce Biotech
Genentech is handing over $96 million (€82 million) in upfront and near-term payments to work with Affimed on NK and T-cell engagers. The deal  features $5 billion in milestones and royalties that could land in Affimed's bank account if the immunotherapies succeed.

August 28, 2018 -  Fierce Pharma
The clock is ticking for a Teva plant in Israel that will be closed as part of the drugmakers massive cost-cutting plan. The 175 jobs that will be lost at the plant are a fraction of the 14,000 workers Teva is letting go worldwide.

August 27, 2018 -  Fierce Biotech
Wright Medical Group announced plans to snatch up its competitor Cartiva, along with its synthetic cartilage implant for treating arthritis in the big toe, for $435 million in upfront cash. Wright plans to fully fund the purchase through sales of equity securities, before the transaction is expected to close in the fourth quarter of this year. 

August 27, 2018 -  Fierce Biotech
Novartis is licensing  a treatment for Netherton syndrome, a rare genetic disorder, to LifeMax Laboratories, a biotech based in the San Francisco area looking to address diseases that have limited treatment options.
August 27, 2018 -  BioSpace
Centogene today announced that Evotec AG  and Centogene AG entered into a global strategic collaboration agreement for joint drug discovery projects, developing compounds to treat rare genetic diseases. Centogene and Evotec initiated the collaboration to develop a strategic high-throughput platform for testing novel small molecules in rare hereditary metabolic diseases.
Recent Reports Providing Insight Into Healthcare & Related Industries
An Overview of Events Hosted or Attended by the Bourne Partners Team
September 27 - 28, 2018 | New Brunswick, NJ
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

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