Week of December 4, 2017 | Vol. 6, Issue 47
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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.
Astellas Buys DMD Drug In $450M Mitochondrial Takeover
The takeover gives Astellas full control of a phase 1 DMD drug in return for $225 million upfront and the same again down the line. 

Tokyo, Japan-based Astellas first hooked up with Mitobridge, then known as Mitokyne, in 2013 to access a source of candidates designed to improve mitochondrial function. That landed Astellas an option to buy Mitobridge at certain points over the next five years as part of a package that could ultimately be worth $730 million to the biotech and its investors.  Astellas' decision to take up its option means it will pay at least a sizable slice of that amount. The upfront component of the takeover is valued at $225 million, although Astellas will only pay $165 million once its existing stake in Mitobridge is factored in. Astellas is on the hook for a further $225 million in clinical milestones. The centerpiece of the acquisition is MA-2011, a PPAR-delta modulator that moved into phase 1 tests in healthy volunteers earlier this year. If all goes to plan, MA-2011 will advance into testing in patients with DMD. 

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
 13 transactions totaling $694 million 
 Supplies, Equipment & Services
 22 transactions totaling $864 million
 Healthcare IT & Managed Care
 3 transactions 
 Healthcare Facilities & Distributors
 11 transactions totaling $102 million

Pharma & Biotech
22 private placements totaling $886 million
Supplies, Equipment & Services
14 private placements totaling $321 million
Healthcare IT & Managed Care
7 private placements totaling $44 million
Healthcare Facilities & Distributors
2 private placements 

 Pharma & Biotech
 16 public offering totaling $229 million
 Supplies, Equipment & Services
 12 public offerings totaling $1,412 million
 Healthcare IT & Managed Care
 0 public offerings 
 Healthcare Facilities & Distributors
 4 public offering totaling $1,366 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.
December 1, 2017 -  Fierce Pharma
The buzz about Amazon's potential play in the drug business has persisted despite the e-retailing giant's refusal to comment. Now, CNBC reports  the company has had discussions with generic drugmakers-Mylan and Sandoz among them-about strategies for entering the industry. The discussions have been preliminary and high-level, according to CNBC, but the news signals that Amazon is continuing to investigate whether and how it could shake up the drug industry. Previous reports have said the tech and retail giant has had discussions with pharmacy benefit managers as it eyes pharmaceuticals.

November 30, 2017 -  Fierce Biotech
MorphoSys has found  a buyer for the Chinese rights to multiple myeloma candidate MOR202. The deal puts I-Mab Biopharma in charge of developing the CD38 antibody in China and neighboring territories in return for $120 million in upfront and milestone payments. I-Mab is handing over the first $20 million straightaway, with the remaining $100 million and tiered double-digit royalties to follow if MOR202 clears clinical and commercial milestones. Responsibility for taking MOR202 past those milestones in China, Hong Kong, Macao and Taiwan will fall squarely on I-Mab.

KKR Raises $1.45 Billion to Support Growing Health-Care Companies
November 29, 2017 -  The Wall Street Journal
KKR & Co., one of the world's oldest and largest private-equity firms, has raised $1.45 billion for its first fund focused exclusively on small yet growing health-care companies, which the firm believes are underserved by investors.  KKR itself is contributing $265 million to the KKR Health Care Strategic Growth Fund through a combination of the firm's own balance sheet and employee commitments, according to a news release by the firm.  Ali Satvat, KKR member and head of KKR Health Care Strategic Growth, said the investment makes KKR the largest investor in the fund.

November 29, 2017 - Fierce Biotech
Decibel Therapeutics has forged an unusual alliance with Regeneron that gives it access to the big biotech's scientific expertise-without giving away rights to its drug candidates for hearing loss and tinnitus.  Decibel Therapeutics has forged an unusual alliance with Regeneron that gives it access to the big biotech's scientific expertise-without giving away rights to its drug candidates for hearing loss and tinnitus.

Fresenius Kabi to invest $100M, add 445 jobs in North Carolina as U.S. investments top $5B
November 27, 2017 - Fierce Pharma
With plans for a major expansion of its North Carolina site, Fresenius Kabi's investments aimed primarily at the U.S. generics market now top $5 billion as the German drugmaker bets on growth in sterile injectables.  Fresenius Kabi says  it will spend more than $100 million and add 445 jobs at the syringe and drug-making site in Wilson, North Carolina, that it acquired  in 2016 from Becton Dickinson. Fresenius has agreed to add the jobs over five years in exchange for about $7.2 million in state aid over 12 years. The company will build a second manufacturing facility there as well as add to the current facility. 

November 27, 2017 -  Fierce Biotech
Biogen has struck  a deal to protect its blockbuster multiple sclerosis franchise Tecfidera from the threat of Alkermes' ALKS 8700. The deal gives Biogen the exclusive worldwide rights to a candidate designed to match the efficacy and better the safety of a cornerstone of its commercial operation. Cambridge, Massachusetts-based Biogen is paying Alkermes $28 million upfront to cover half of what its new partner has spent on developing the drug this year. Alkermes is also set to receive the first $50 million of the up to $200 million in milestones tied to the deal before the end of 2017. And it will free itself of the cost of developing ALKS 8700 in January, when Biogen will take full responsibility for funding its progress. 
Current Opportunities Available Through Bourne Partners
Project Longhorn 
Sell-side M&A
Southeastern US  |  CDMO  |  Approximately $85mm Revenue  |   Approximately $8mm EBITDA

Project Crimson 
Sell-side M&A
Southeastern US  |  CMO  |  Approximately --- Revenue  |   Approximately --- EBITDA

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

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

Project Barracuda 
Sell-side M&A
OTC Product  |  Approximately $31mm Revenue  |   Approximately $12mm Contribution Margin
An Overview of Events Hosted or Attended by the Bourne Partners Team
36th Annual J.P.Morgan Healthcare Conference
January 8-11, 2018 | San Francisco, CA
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
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