Week of June 11, 2018 | Vol. 7, Issue 23
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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.
Johnson & Johnson To Sell Advanced Sterilization Products To FOrtive For $2.8 Billion
Johnson & Johnson received a binding offer to sell its Advanced Sterilization Products (ASP) business to Fortive Corporation 

The deal is valued at $2.8 billion, made up of $2.7 billion in cash from Fortive and $0.1 billion of retained net receivables.  This appears to be another action  on J&J's part to streamline its portfolio after a review of its over-the-counter drugs, diabetes care and some of its medical device products. It has reported  that it was close to selling off its diabetes device unit for $2.1 billion. There has been a focus on building its drug pipeline lately. Last year it bought Actelion  for $30 billion to strengthen its presence in the rare diseases market. In 2017, ASP brought in about $775 million. Dennis Ding, an analyst with Raymond James, said, "J&J over the last couple of months has focused on managing its portfolio a little bit better to offset some of the slower growing assets," Reuters reported. "I would think by offloading this business it should improve overall organic growth." Fortive is based in Everett, Washington, and it manufactures and markets medical instruments and other technologies, including GPS tracking products. In 2016, Fortive spun off from medical and industrial parts manufacturer Danaher Corp.

C ontinue Reading at BioSpace .
Philips To Buy Heart Rhythm Disorder Specialist EOD Solutions For $292.1 Million
The takeover will give Philips a significant position in the rapidly growing market for cardiac arrhythmia ablation procedures within several years
Dutch healthcare technology company Philips said on Tuesday it will buy EPD Solutions, a maker of cardiac imaging and navigation systems used to treat patients with heart rhythm disorders. Philips will pay 250 million euros in cash ($292.1 million) upfront, followed by payments estimated to be worth around 210 million euros if milestones are met. "It will take time to penetrate this market, already worth more than 2 billion euros, as most healthcare providers are conservative", he said. "But EPD has a highly competitive, breakthrough technology, which can really address unmet needs." EPD's system provides surgeons with "unique" detailed 3D anatomical information of the heart during ablation procedures, Van Houten said. Since the separation of its lighting division in 2016, Philips has focused on medical devices and healthcare products. The takeover of EPD Solutions further expands the company's image-guided therapy business, after the multi-billion dollar acquisitions of heart disease devices maker Spectranetics last year and vascular imaging company Volcano in 2015.

C ontinue Reading at Reuters .

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
 9 transactions totaling $446 million 
 Supplies, Equipment & Services
 20 transactions totaling $3,293 million
 Healthcare IT & Managed Care
 3 transactions totaling $637 million
 Healthcare Facilities & Distributors
 6 transactions totaling $77 million

Pharma & Biotech
28 private placements totaling $424 million
Supplies, Equipment & Services
17 private placements totaling $412 million
Healthcare IT & Managed Care
13 private placements totaling $972 million
Healthcare Facilities & Distributors
3 private placements totaling $182 million

 Pharma & Biotech
 23 public offerings totaling $9,100 million
 Supplies, Equipment & Services
 8 public offerings totaling $983 million
 Healthcare IT & Managed Care
 0 public offerings
 Healthcare Facilities & Distributors
 2 public offering totaling $197 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.
Identifying genetic variants that control disease-causing blood proteins isn't an easy task. A team led by scientists at the University of Cambridge and Merck & Co. has created a "genetic atlas" of such genetic links that could help reveal biomarkers for potential drugs to develop.  With this genetic map, the study has identified specific biological pathways-not just the genetic variants-that lead to Crohn's disease and eczema.

June 6, 2018 -  BioSpace
Genentech ,  a Roche  company, and Microbiotica,  in Cambridge, England, signed  a multi-year strategic collaboration to discover, develop and commercialize biomarkers, targets and drugs for inflammatory bowel disease (IBD).
June 6, 2018 -  Fierce Biotech
Gilead has licensed  immunization technologies from Hookipa Biotech for use against hepatitis B and HIV. The big biotech is paying $10 million (€8.5 million) upfront and committing to milestones that could exceed $400 million to snag exclusive rights to two technologies in the indications. 

June 6, 2018 -  Fierce Biotech
Pfizer has committed $600 million to its VC fund. The Big Pharma is setting aside 25% of the money for investments in neuroscience startups, giving it a way to continue participating in the field despite its retreat from in-house R&D.  The plan gives Pfizer Ventures more cash overall and significantly more for investment in neuroscience. Pfizer used to spend $50 million a year on its venture wing, an approach it said made Pfizer Ventures equivalent to a $250 million private fund. Now, Pfizer is making $600 million available and calling out particular therapeutic areas for the first time.
June 5, 2018 -  Fierce Pharma
At last year's American Society of Clinical Oncology annual meeting, AstraZeneca posted Lynparza data that would eventually make it the first in its class to break into breast cancer. This time around, it's trying to grab the same crown in prostate cancer.  The British drugmaker, along with new partner Merck, on Monday touted results  showing that adding Lynparza to Johnson & Johnson prostate cancer fighter Zytiga kept disease at bay for longer than Zytiga on its own. The combo staved off disease progression for 13.8 months, versus just 8.2 months for solo Zytiga.

June 4, 2018 -  Fierce Pharma
For years, the Centers for Medicare & Medicaid Services has been hearing concerns that laughing drug Nuedexta was being aggressively pushed by maker Avenair Pharmaceuticals and some doctors for questionable use on dementia patients. Now, the CMS is asking insurers to be on alert for that kind of suspicious prescribing pattern and to let the agency know ASAP if it has concerns. 

June 4, 2018 -  BioSpace
Quadrant Biosciences Inc. ("Quadrant Biosciences"), a Life Science company focused on functional assessment tools and epigenetic biomarkers for brain health and ChoiceOne/MedSpring, a leading Urgent Care provider, are partnering to offer a new brain health assessment at ChoiceOne/MedSpring centers in Maryland and Texas. The ClearEdge Brain Health Toolkit will be available to patients at select ChoiceOne/MedSpring centers in the Baltimore and Dallas-Ft Worth areas starting June 1.

June 4, 2018 -  Fierce Biotech
Immuno-oncology stole the spotlight again at this year's annual meeting of the American Society of Clinical Oncology (ASCO). Recent data showed that Merck's checkpoint inhibitor Keytruda cuts the risk  of death significantly in newly diagnosed lung cancer patients and Bristol-Myers Squibb made a case  for Opdivo combos.
Current Opportunities Available Through Bourne Partners
Project Ocean 
Sell-side M&A
Northeastern US | CDMO | Approximately $6mm Revenue | EBITDA disclosed with NDA

Project Barracuda
Asset Divestiture
Midwestern US | Consumer Health/OTC | Approximately $31.5mm Revenue | Approximately $12mm EBITDA
Recent Reports Providing Insight Into Healthcare & Related Industries
An Overview of Events Hosted or Attended by the Bourne Partners Team
June 24 - 28, 2018  | Boston, MA
October 2, 2018  | 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
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