Week of December 5, 2016 | Vol. 5, Issue 48
|
|
The specialty pharmaceutical sector continues to offer strong future growth as specialty pharmaceuticals become an ever increasing piece of the global healthcare puzzle. Worldwide Spec Pharma sales reached $655 billion in 2015. Prescription drug sales are expected to reach almost one trillion dollars by 2020 (CAGR: 4.8% between 2014 and 2020).
Despite a decrease in equity performance over the last twelve months, the Spec Pharma market has experienced high growth in the last five years. After a spike in M&A activity and record-high multiples in 2014 and 2015, the market has returned to normalized levels. The recent slowdown can also be attributed to the negative publicity surrounding pricing practices, which has become a political issue in the election year.
The full report includes a detailed market overview, current market trends, headwinds and tailwinds facing industry participants, industry trading and transaction comps, recent deal profiles, and a collection of future growth drivers within the space.
|
House Passes Health Bill to Speed Drug Approvals, Boost Biomedical Research
The House on Wednesday passed far-reaching legislation aimed at bolstering federal funds for biomedical research and speeding up drug and medical-device approvals by the Food and Drug Administration, a goal long sought by the pharmaceutical industry.
The measure also wraps in separate legislation that contains an extensive program to promote treatment of mental illness and would provide $1 billion to prevent and treat the national scourge of opioid addiction. These provisions helped to rally lawmakers from both sides of the aisle around the bill, which passed 392-26.
The bill, with a price tag totaling $6.3 billion, also includes $4.8 billion for the National Institutes of Health over 10 years and $500 million for the new programs within the FDA. The Senate is expected to take up the legislation early next week, and it looks likely to pass. Late Tuesday, the White House said it "strongly supports passage" of the bill. President Barack Obama has endorsed the "cancer moonshot" program led by Vice President Joe Biden and a precision-medicine initiative endorsed by NIH Director Francis Collins.
|
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 $308
million
Supplies, Equipment & Services
21 transactions totaling $2,084 million
Healthcare IT & Managed Care
6 transactions totaling $69 million
Healthcare Facilities & Distributors
12 transactions totaling $376 million
|
|
|
|
|
|
Pharma & Biotech
17 private placements totaling $656 million
Supplies, Equipment & Services
23 private placements totaling $95 million
Healthcare IT & Managed Care
7 private placements totaling $70 million
Healthcare Facilities & Distributors
2 private placements totaling $588 million
|
|
|
|
|
Pharma & Biotech
4 public offerings totaling $233 million
Supplies, Equipment & Services
4 public offerings totaling $12 million
Healthcare IT & Managed Care
1 public offering totaling $10 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 subsectors
For a complete trading comp analysis (including the individual equities that comprise the subsectors), click on the table to the right or use the download link from the top of this newsletter.
Note: data reflects prior week close.
|
RECENT INDUSTRY HEADLINES
A Sampling of Relevant Industry Headlines from the Last Week
Below are snippets from relevant industry news articles from the past week presented in chronological order. For additional information or the article's complete text, click the headline link to view the original publication.
|
December 2, 2016 -
CNN
A federal jury in Dallas has ordered Johnson & Johnson and its subsidiary DePuy Orthopaedics to pay more than $1 billion to a group of plaintiffs over artificial hip replacements.
A lawyer for the six plaintiffs said they suffered "serious medical complications caused by defective" metal-on-metal Pinnacle implants. The jurors found that the companies failed to warn patients and their doctors about risks related to the defectively designed product.
Each of the patients had to undergo a second, or revision, surgery to replace the devices and repair tissue damage and bone erosion. At least one had received double hip implants.
The jury awarded more than $30 million in actual damages and more than $1 billion in punitive damages. Jurors ruled that Johnson & Johnson and DePuy were negligent in designing the implant; failed to warn physicians and patients about concerns over the product; failed to recall it; and intentionally misrepresented the product's effectiveness to patients and their doctors.
December 2, 2016 -
Fierce Pharma
Drugmakers haven't been shy this week about sharing their views on drug pricing and how pharma should proceed in that arena going forward. Thing is, they don't all agree.
Tensions were on full display Thursday when a panel of biopharma CEOs at the Forbes Healthcare Summit was asked to shed light on why people dislike the industry. The "real reason," according to Regeneron CEO Len Schleifer? "We as an industry have used price increases to cover up the gaps in innovation," he said, as
quoted
by Business Insider. Using acquisitions or price hikes to boost revenue instead of new, innovative products is "not the business I want to be in," he continued.
Pfizer CEO Ian Read, though, argued that the industry features a variety of different business models-some, for instance, more appropriate for the $38.79 billion Regeneron, and others for $192.23 billion Pfizer. "The total cost of drugs as a percentage of healthcare has not changed in two decades," he said.
December 1, 2016 - Fierce Biotech
AstraZeneca
has penned a pact to develop bicyclic peptides with Bicycle Therapeutics. The value of the upfront payment, R&D funding and milestones could swell to $1 billion in the unlikely event all programs in the multitarget respiratory, cardiovascular and metabolic disease collaboration come to market.
The agreement tasks Bicycle with identifying bicyclic peptides against an undisclosed number of targets put forward by AstraZeneca. Bicycle will then pass responsibility for further development of the candidates to its Big Pharma partner.
Interest in the peptides stems from evidence they combine the affinity and target specificity of antibodies with the molecular weight of small molecules. In oncology, Bicycle's in-house area of focus, this combination gives bicyclic peptides the potential to penetrate tumors faster and in greater numbers than antibodies can achieve. Working with AstraZeneca, Bicycle plans to show its platform can also support the creation of effective inhaled therapeutics.
November 28, 2016 -
Wall Street Journal
Newly unsealed court testimony shows health insurers
Anthem
Inc. and
Cigna
Corp. have significant disagreements about their proposed merger, offering fresh details about a rift that is highly unusual for two companies seeking to press ahead with such a deal.
A trial on the planned merger began last week after the Justice Department decided to challenge it on antitrust grounds. Substantial parts of the case have been open to the public, but U.S. District Judge Amy Berman Jackson closed the courtroom for crucial portions of testimony by Anthem Chief Executive Joseph R. Swedish and Cigna CEO David Cordani, after the companies said confidential business information could be involved.
The judge ordered the transcripts of the testimony unsealed Monday, however, after seven media organizations, including The Wall Street Journal, raised objections to keeping it sealed.
|
 |
|
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.
Sincerely,
The Bourne Partners Team
Bourne Partners
550 South Caldwell Street
Suite 900
Charlotte, NC 28202
704-552-8407
|
STAY CONNECTED
|
|
|
|
|
