Week of May 14, 2018 | Vol. 7, Issue 19
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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.
Bourne Partners Advises Endo On Sale Of Generic Products To Lannett
Lannett has acquired 23 approved and one pending drug product applications from a subsidiary of Endo International plc

The portfolio primarily consists of oral solutions with a few semi-solid products.  For the 12 months ended  March 2018 , combined sales of the acquired products were in excess of  $175 million , according to IMS. "This transaction perfectly dovetails with our strategy to grow our top and bottom lines and diversify our product offering by complementing internal development efforts with the acquisition of commercially ready products," said Tim Crew, chief executive officer of Lannett.  "The acquired products, combined with our planned launches of our previously approved and other recently acquired products, create new, near-term revenue and profitability streams.  We expect to begin launching the products, under the Lannett label, as soon as the transfer activities are completed and appropriate regulatory filings are made, currently estimated to be in the second half of fiscal 2019.  We believe there is an abundance of similar opportunities in the market today; our team is in various stages of negotiation on a number of transactions to add products to our portfolio." Crew went on to say that the acquired portfolio of products will be manufactured at Lannett's liquid generics facility in Carmel, New York, which has the capacity, capability and expertise. Bourne Partners acted as lead financial advisor to Endo International plc for this transaction.  

C ontinue Reading at PR Newswire .
Takeda To Vault Into Big Pharma With $62B Shire Buyout And Mega Merger Cuts Are On The Way
The deal will vault Takeda into the top 10 pharma companies worldwide and add tens of billions to its debt load 
Shire and Takeda have finally, officially, agreed on a deal.  After weeks of bidding, the Japanese drugmaker agreed  to shell out $62 billion on the rare disease specialist, 46% cash, 54% stock-roughly the same terms Takeda disclosed when it announced its fifth  bid. A fair share of industry watchers initially expected that Takeda wouldn't make it to the finish line since snapping up Shire would mean taking on a hefty debt load. And prospects looked increasingly dim after news of Takeda's interest sent its shares south and Shire's soaring. The deal is among biopharma's largest ever. The way Jefferies analyst Peter Welford sees it, "the offer value is reasonable." It represents a 60% premium to the share price low from before Takeda confirmed its interest in a buy, he wrote in a Tuesday note to clients. Takeda shareholders will have to agree, though, and the deal hasn't been popular with investors so far. The company's shares are down significantly since the company first went public with its buyout interest. 

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
 19 transactions totaling $3,973 million 
 Supplies, Equipment & Services
 10 transactions totaling $86 million
 Healthcare IT & Managed Care
 5 transactions totaling $6,938 million
 Healthcare Facilities & Distributors
 13 transactions totaling $168

Pharma & Biotech
22 private placements totaling $433 million
Supplies, Equipment & Services
14 private placements totaling $37 million
Healthcare IT & Managed Care
10 private placements totaling $630 million
Healthcare Facilities & Distributors
4 private placements totaling $355 million

 Pharma & Biotech
 9 public offerings totaling $315 million
 Supplies, Equipment & Services
 7 public offerings totaling $450 million
 Healthcare IT & Managed Care
 1 public offerings totaling $1,800
 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.
May 11, 2018 -  The Wall Street Journal 
President Donald Trump pledged Friday to  rein in drug prices  with dozens of initiatives, saying that skyrocketing prescription costs represented a threat to Americans. "The drug lobby is making an absolute fortune at the expense of American consumers," Mr. Trump said from the White House Rose Garden. "Previous leaders turned a blind eye to this incredible abuse. But under this administration, we are putting American patients first."

May 10, 2018 -  Fierce Biotech
Eli Lilly is ponying up about $1.6 billion to get its hands on Armo Biosciences and its lead asset, pegilodecakin, which has shown promise both as a single agent and in combination treatments for multiple tumor types.  The all-cash deal is slated to close by the end of the second quarter, Lilly said  in a statement. Armo, which filed in January to raise up to $86 million  in its Nasdaq IPO, came on the scene  in 2013 with $20 million and a discarded Merck drug. Pegilodecakin, a PEGylated form of the anti-inflammatory cytokine IL-10, is currently in a phase 3 trial in pancreatic cancer. It's also in the clinic for lung and renal cell cancer, melanoma and other solid tumor types.

May 10, 2018 -  Fierce Biotech
Astellas is paying  Aquinox Pharmaceuticals $25 million upfront for regional rights to rosiptor. The deal gives Astellas the right to develop the phase 3 SHIP1 activator in Japan and certain other nations in Asia. Aquinox thinks rosiptor can reduce inflammation and associated pain by dialing down the PI3K cellular signaling pathway, which is linked to the concentration of pro-inflammatory signaling molecules in tissues. A midphase trial of the drug in patients with bladder pain syndrome/interstitial cystitis (BPS/IC) missed its primary endpoint in 2015. But Aquinox still moved into phase 3 in the indication.

Genentech forms $1B discovery collaboration with soil-prospector Lodo Therapeutics
May 9, 2018 -  Fierce Biotech
Genentech signed a broad, open-ended drug discovery collaboration with Lodo Therapeutics that could be worth nearly $1 billion, focused on deriving unique, natural products from the microbial DNA found in soil.  The drugmaker plans to use Lodo's metagenome-prospecting platform to identify novel small molecules with therapeutic potential against a wide range of diseases and targets. While the upfront payment was not disclosed, Lodo is eligible for development milestone bonuses totaling up to $969 million, as well as tiered royalties based on future sales.

New engineering method could overcome barriers in diabetes cell therapy
May 8, 2018 -  Fierce Biotech
Pancreatic cell transplants have the potential to be a permanent treatment for Type 1 diabetes. Problem is, the cells have trouble forming the blood vessel networks they need to thrive and provide insulin to patients. So scientists in the U.S. and Japan devised a new tissue engineering method to tackle this blood-supply problem in pancreatic cell transplantation. Using the method, they created pancreatic islets that cured severe Type 1 diabetes when they were transplanted into mice. 
AstraZeneca continues yard-sale strategy with $538M Seroquel rights deal
May 8, 2018 - Fierce Pharma
AstraZeneca is back at it again with asset sales. The company, which has taken some flak for a series of deals to offload asset rights, inked an agreement with Luye Pharma for legacy antipsychotic Seroquel and an extended-release version.  The agreement covers Seroquel and Seroquel XR rights in the U.K., China and other markets such as Brazil, Australia, Saudi Arabia and Mexico. AstraZeneca will get $260 million when the deal closes-expected by the end of the quarter-plus up to $278 million in milestones for a total value of up to $538 million. 

May 8, 2018 -  Fierce Pharma
Johnson & Johnson's Darzalex just vaulted ahead of its myeloma competitors-and it has plenty of them.  Monday, the FDA greenlighted  the drug-in combination with Takeda's Velcade and prednisone-in first-line multiple myeloma patients who are transplant ineligible, making it the first monoclonal antibody to ring up an approval in newly diagnosed patients.

May 8, 2018 - Reuters
Chinese online healthcare solutions platform WeDoctor, which is backed by tech giant Tencent Holdings Ltd,  said on Wednesday it had raised $500 million from several investors, valuing the firm at $5.5 billion ahead of a listing this year. The investment round was led by AIA Company Ltd, part of Hong Kong-listed insurer AIA Group Ltd, and infrastructure and services group NWS Holdings Ltd.

May 7, 2018 -  Reuters
Canadian landlord NorthWest Healthcare Properties REIT  announced a $312 million strategic investment in Australian hospital operator Healthscope as part of a plan to buy its real estate amid a private equity takeover bid for the firm. NorthWest said on Tuesday it has acquired a 10 percent interest in Healthscope through a derivative transaction. The A$416 million ($312 million) deal gives it 10.1 percent of the voting rights at the Australian company.
Current Opportunities Available Through Bourne Partners
Project Limestone
Asset Divestiture
Southeastern US | ANDAs | ANDA Revenue disclosed with NDA

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

Project Longhorn 
Sell-side M&A
Southeastern US | CDMO | Approximately $85mm Revenue | Approximately $8mm EBITDA
Recent Reports Providing Insight Into Healthcare & Related Industries
An Overview of Events Hosted or Attended by the Bourne Partners Team
BIO International Convention
June 4 - 7, 2018  | Boston Convention Center |  Boston, MA
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
550 South Caldwell Street
Suite 900
Charlotte, NC 28202