Week of November 13, 2017 | Vol. 6, Issue 44
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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.
Drug Distributor McKesson to Buy CVS Health Services Unit, RxCrossroads
McKesson Corp said on Monday it would buy drugstore operator CVS Health Corp's unit, RxCrossroads in a $735 million deal 

The unit, RxCrossroads, provides reimbursement support, integration with network pharmacies, patient adherence programs, specialty logistics services, sales operations support and mail-order pharmacy services.  McKesson said the deal will also add plasma logistics to its manufacturer services, which will allow it "to serve biopharma companies of all sizes and throughout the product life cycle." The deal comes as growing speculation that Amazon.com Inc is planning to enter the prescription drug business has sent tremors through the pharmaceutical supply chain and rattled the shares of the drug distributors, pharmacy benefit managers and drug retailers. Many companies in the industry are preparing for the online retailer's entry, with the latest comments coming from CVS Health itself earlier in the day after it reported a better-than-expected quarterly profit.

Continue Reading at  Reuters .
Sanofi Pays $40M, Commits $765M More for Preclinical MS Drug
Sanofi has commited up to $805 million to license multiple sclerosis drug PRN2246 from Principia Biopharma

The French Big Pharma is paying $40 million upfront to pick up the preclinical asset, with $765 million more to follow if it passes all the milestones that await.  Principia has taken BTK inhibitor PRN2246 up to and into IND-enabling studies. Along the way, the biotech has generated data suggesting the drug triggers the effects on immune cell signaling that have made BTK inhibitors hot property in the autoimmune space. Crucially, Principia has also shown PRN2246 crosses the blood-brain barrier, opening the door to use in multiple sclerosis and other neurological disorders. That attracted the attention of Sanofi, which has built a significant multiple sclerosis franchise through Aubagio and Lemtrada. The French Big Pharma is putting up a tidy sum, for a preclinical asset, to land a drug that could one day bolster that franchise. Interest in BTK, best known as the target of Imbruvica, has broadened in recent years as scientists have generated evidence linking the protein to autoimmune disorders. Merck KGaA is among the companies to respond to the emerging therapeutic opportunity, notably by advancing evobrutinib. The German firm is testing the BTK inhibitor in midphase multiple sclerosis, rheumatoid arthritis and lupus trials. 
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 $590 million 
 Supplies, Equipment & Services
 13 transactions totaling $735 million
 Healthcare IT & Managed Care
 4 transactions totaling $47 million
 Healthcare Facilities & Distributors
 15 transactions totaling $204 million

Pharma & Biotech
23 private placements totaling $203 million
Supplies, Equipment & Services
16 private placements totaling $307 million
Healthcare IT & Managed Care
7 private placements totaling $35 million
Healthcare Facilities & Distributors
2 private placements totaling $1 million

 Pharma & Biotech
 29 public offering totaling $6,331 million
 Supplies, Equipment & Services
 5 public offerings totaling $329 million
 Healthcare IT & Managed Care
 1 public offerings totaling 125 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 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.
New Skin for 7-Year-Old Boy Marks Advance in Gene Therapy 
November 8, 2017 - Wall Street Journal
In a significant advance in organ regeneration and gene therapy, researchers created a new, healthy skin that covers almost the entire body of a 7-year-old boy with a life-threatening genetic disorder associated with skin blistering.  The new skin remains functional after 21 months, and doesn't blister or require ointment or medication, according to the team of scientists and doctors from Austria, Germany and Italy who described the case in a paper in the journal Nature. The child in the study has Junctional Epidermolysis Bullosa (JEB), part of a family of rare, often lethal, skin-blistering diseases. Epidermolysis Bullosa affects only around 1 in every 20,000 births in the U.S.; JEB is a severe form of the disease, often leading to death in early childhood.

San Diego Biotech Progenity Banks $125M for Precision Medicine R&D 
November 7, 2017 -  BioSpace
Privately-held Progenity Inc. snagged $125 million in funding that will allow the company to accelerate development of its gastrointestinal platform.  This morning, the California-based company announced the privately placed Series B funding round, which was led by a fund managed by an existing investor, Athyrium Capital Management. Harry Stylli, 
the founder and board chairman, said the financing round will be used to support the development of its GI platform targeting diagnostics and therapeutics for the GI tract. That new system includes precision molecular diagnostics tools, precision therapeutics, microbiome analytics, and consumer health nutrition.

November 7, 2017 -  Reuters
The world's biggest eyeglass frame maker is planning to merge with the largest lens maker in a tie-up U.S. antitrust experts fear will be bad news for consumers, but could still be approved.  France's Essilor , the prescription lens maker, has asked U.S. regulators to bless its merger with Italy's Luxottica , the leading frame maker, to create a company that would produce everything from Ray-Bans to Giorgio Armani frames, and be the top U.S. eyeglass retail outlet as well as a leading provider of vision insurance.

Takeda, Portal Instruments Ink $100M Deal to Develop Needle-Free Drug Delivery Device
November 7, 2017 -  BioSpace
Takeda Pharmaceuticals Company, based in Osaka, Japan, and Portal Instruments,  headquartered in Cambridge, Mass., inked a  collaboration deal to develop and commercialize Portal's needle-free drug delivery device for use with some of Takeda's biologic medicines. Portal's device was developed by Ian Hunter at the Massachusetts Institute of Technology (MIT). It delivers, without needles, biologics using a pressurized liquid.

November 7, 2017 -  BioSpace
Is artificial intelligence the future of the biotech industry?  Players big and small in the pharma industry are beginning to embrace the idea of artificial intelligence. Some innovators, such as Elon Musk clearly see the use of AI and machine learning as one of the coming cornerstones of the healthcare industry. Earlier this year Musk, the visionary behind companies such as SpaceX and Tesla, launched the biotech company Neuralink which has the lofty goal of linking the human brain with a computer. Musk has an idea of implanting computers into a human brain as a way to merge man-made software with the power of the brain in order to improve memory or as a way to interface with computers. 
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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