Week of February 12, 2018 | Vol. 7, Issue 6
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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.
Janssen, Theravance Ink GI Pact Worth Up To $1B
Janssen and Theravance Biopharma are teaming up to develop a JAK inhibitor for inflammatory bowel disease. 

Theravance will pick up $100 million up front, with the potential to earn another $900 million in milestone payments and royalties.  Under the agreement, Theravance will conduct a phase 2 study of the candidate, TD-1473, in Crohn's disease, as well as a phase 2b/3 induction and maintenance study in ulcerative colitis, both slated to start this year. If all goes well, Janssen may pull the trigger on an exclusive license agreement for the program and take the lead on developing the drug in Crohn's, according to a statement. If the drug is approved, Janssen will be responsible for ex-U.S. marketing, with Theravance receiving tiered royalties, while the pair has the option of co-commercializing within the U.S. They will also split profits in the U.S., as well as development costs, with Janssen picking up 67% of the tab.

C ontinue Reading at  Fierce Biotech.
Pieris, Seattle Genetics Pen $1.2B Biobucks Pact For Next-Gen cancer Drugs
Upfront the cost is much smaller at $30 million; but if everything goes well and there are approvals and big sales, this could swell into $1.2B in biobucks terms

The deal sees the biotechs work together on developing a series of targeted bispecific immuno-oncology treatments for solid tumors and blood cancers.  Pieris brings to the table its "agonistic costimulatory Anticalin proteins," that it says when fused to a tumor-targeting antibody can "activate the immune system preferentially in the tumor micro environment." The Anticalin proteins are engineered versions of endogenous low-molecular weight human proteins called lipocalins. Pieris thinks the nature of its proteins give them high affinity and specificity, and make them suitable for use in bispecific therapeutics. Seattle Genetics, meanwhile, will bring its work in antibody-drug conjugates (ADCs), which targets and tumor-specific mAbs, from which programs will be selected for the collab. The bispecific drug candidates coming out of this pact will be designed to enable the patient's immune cells to specifically attack tumors, the pair said in a statement. 

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
 8 transactions totaling $87 million 
 Supplies, Equipment & Services
 26 transactions totaling $347 million
 Healthcare IT & Managed Care
 5 transactions 
 Healthcare Facilities & Distributors
 12 transactions totaling $202 million

Pharma & Biotech
22 private placements totaling $149 million
Supplies, Equipment & Services
14 private placements totaling $41 million
Healthcare IT & Managed Care
9 private placements totaling $1,186 million
Healthcare Facilities & Distributors
1 private placement totaling $22 million

 Pharma & Biotech
 18 public offerings totaling $1,689 million
 Supplies, Equipment & Services
 4 public offerings totaling $124 million
 Healthcare IT & Managed Care
 0 public offerings
 Healthcare Facilities & Distributors
 5 public offerings totaling $1,597 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.
February 9, 2018 -  BioSpace
Elastagen Pty Limited, a clinical stage company developing medical device products based on recombinant tropoelastin, today announced that it has entered into a definitive agreement under which Allergan  a leading global biopharmaceutical company, has agreed to acquire Elastagen for an upfront payment of US$95M plus contingent, commercial payments." Elastagen's revolutionary technology is based on recombinant human tropoelastin, the precursor of elastin which is a key component of youthful skin. 

February 8, 2018 -  The Wall Street Journal
The Labor Department has identified 44 million people who might be eligible to participate in AHPs. Of course the AHP rules could be an invitation for stripping away coverage (e.g., maternity, mental health). But the rules might also be an opportunity to disrupt pricing. It is an article of faith in American health policy that "it's the prices" that add to our overall health expenses and differentiates us from other advanced societies. Not higher utilization, not lower quality, but higher prices. But why are the prices so high?

The Latest Way to Woo Workers: Fertility Benefits
February 7, 2018 -  The Wall Street Journal
Companies are turning to bigger and better fertility-treatment benefits to help lure the best and the brightest.  With the tightest U.S. labor market in two decades , employers are scouring for ways to stand out in the war for top talent. Many say they've found an edge not just by helping employees pay for costly in vitro fertilization , or IVF, and other assisted-reproduction treatments but by making existing coverage more generous and accessible than before.

2 Biotechs That Plunged More Than 20% Yesterday   
February 6, 2018 - BioSpace
After yesterday's big plunge in the stock market, and today with the Dow Jones Industrial Average dropping  more than 500 points after opening, but mostly recovering (so far), volatility appears to be the key word to describe the stock market. However, broadly, biotech companies have dropped 3.5 percent for the fifth straight day, which is generally better than the overall stock market at the moment.

Chinese upstart DL Medicine forges alliance with Pfizer
February 6, 2018 -  Fierce Biotech
Chinese biotech NetVation DL Medicine has arrived on the scene with a two-year alliance with Pfizer, plus an equity investment from the big pharma group.  There's not a lot of information around about DL Medicine, which emerges with backing from HitGen Pharma and the Chinese Academy of Sciences' Anlong venture fund. The discovery-stage biotech says it will "screen and collaborate with Pfizer in producing new chemical entities against pre-selected targets from multiple therapeutic areas."

Breyer Leads $25 Million Bet on Health-Care AI Startup
February 5, 2018 -  The Wall Street Journal
When Jim Breyer invested in Facebook in 2005, he never expected social networking to be where it is today. Now he's betting the intersection of artificial intelligence and medicine is poised for its own big breakout.  Mr. Breyer and his firm, Breyer Capital, are leading a $25 million Series A round for Paige.AI, a startup applying AI to pathology to improve diagnosis and treatment of cancer.
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
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
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