Week of December 12, 2016 | Vol. 5, Issue 50
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Lonza Group AG on Thursday said it had agreed to buy Capsugel, a New Jersey-based maker of drug capsules, from private-equity company KKR & Co., in a deal valued at $3.5 billion excluding debt refinancing.
The Basel, Switzerland-based pharmaceutical company said it expected the deal to accelerate growth and boost earnings in the first full year after closing. The transaction, which also includes the refinancing of about $2 billion of Capsugel's existing debt, has already been approved by the boards of both companies.
News of the deal came just days after
Lonza confirmed it was in talks to acquire Capsugel, after
The Wall Street Journal reported that KKR was nearing an agreement to sell the business.
Capsugel, based in Morristown, N.J., makes capsules used for the delivery of drugs and food supplements. Its designs are used in vitamins, over-the-counter drugs, dietary supplements and prescription medicines. KKR bought Capsugel from pharmaceutical giant
Pfizer
Inc.
for $2.4 billion in 2011.
Lonza produces a wide range of chemical, health care and personal-care products and has been scouring for a possible deal. The acquisition of Capsugel will broaden the range of manufacturing and development services it can provide to drugmakers.
The company said it expected to achieve operating synergies of 30 million Swiss francs ($31.6 million) and tax synergies of 15 million francs a year by 2019 from the deal and 100 million francs a year in top line synergies in the mid-to-long term.
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Sanofi, Actelion could reach $30B deal by next week: Bloomberg
A transaction between the two could be announced as soon as next week, Bloomberg's sources
said, and it could see Actelion net $275 per share-a price that would value the company at $29.6 billion. That price may include a contingent value right (CVR), a security that pays out only if pipeline meds hit certain targets.
As for which pipeline meds would be involved, that's one thing the companies are still working out-but ponesimod, Actelion's relapsing multiple sclerosis candidate, is among the possibilities, sources told the news service.
Of course, negotiations could still fall apart, the sources cautioned. After all, an eleventh-hour request from Actelion CEO Jean-Paul Clozel for a bumped-up price reportedly scuttled his company's potential J&J tie-up. With
sale-shy
Clozel
reluctant
to hand over the company he founded outright, the New Jersey pharma giant
announced
Tuesday it was quitting on talks that had reportedly been going on informally for two months.
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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.
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Pharma & Biotech
11 transactions totaling $6,238
million
Supplies, Equipment & Services
23 transactions totaling $1,926 million
Healthcare IT & Managed Care
5 transactions totaling $18 million
Healthcare Facilities & Distributors
17 transactions totaling $760 million
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Pharma & Biotech
17 private placements totaling $454 million
Supplies, Equipment & Services
15 private placements totaling $123 million
Healthcare IT & Managed Care
3 private placements totaling $19 million
Healthcare Facilities & Distributors
3 private placements totaling $15 million
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Pharma & Biotech
2 public offerings totaling $18 million
Supplies, Equipment & Services
3 public offerings totaling $8 million
Healthcare IT & Managed Care
2 public offerings totaling $1,494 million
Healthcare Facilities & Distributors
1 public offering totaling $102 million
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 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.
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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.
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December 15, 2016 -
Fierce Pharma
With $14 billion socked into its Medivation buy, Pfizer will be under pressure to deliver with Xtandi, which it shares 50-50 with the Japan-based drugmaker Astellas. Along with a late-stage candidate talazoparib, Xtandi was Medivation's
chief lure to potential buyers.
Though the new data was just one route to growing the drug, it's a route that might have led not only to extending treatment duration, but sharpening Xtandi's edge in the market share battle with Johnson & Johnson's Zytiga, analysts said.
The 500-patient Plato study was designed to assess Xtandi combined with Johnson & Johnson's Zytiga against Xtandi alone, in patients whose prostate specific antigen (PSA) levels progressed after Xtandi treatment. Patients in both arms of the study also took the steroid prednisone, and none had been treated with standard chemotherapy.
The idea was that, rather than cycling off of Xtandi when PSA levels progressed, Xtandi patients might add Zytiga to their Xtandi regimens instead. But the Xtandi-plus-Zytiga combo proved no better at keeping cancer at bay than the Xtandi regimen did.
Health-Care Website Saw Busiest Sign-Up Day Ever Thursday, Obama Says
December 16, 2016 -
Wall Street Journal
President Barack Obama said the website selling coverage under his signature health law had seen its busiest day ever on Thursday, with 670,000 people using HealthCare.gov to renew or obtain health plans ahead of a year in which Republicans have pledged to begin dismantling the law.
The president announced the numbers early into his final press conference of 2016, listing them as one of the achievements of his eight years in office that he said he was proud to leave to his successor.
Mr. Obama and top administration officials have used the weeks since the elections that gave Republicans control of Congress and the White House to
push a twin message about the Affordable Care Act: People should keep signing up for coverage, and fight GOP lawmakers in their bid to repeal the 2010 health-care overhaul.
December 14, 2016 - Fierce Pharma
Score a big win for Pfizer and its $4.5 billion buyout of Anacor Pharmaceuticals. The FDA Wednesday approved Anacor's eczema treatment that is projected to be a $2 billion blockbuster.
The FDA
approved Eucrisa (crisaborole) ointment to treat mild to moderate atopic dermatitis, better know as eczema, in patients two years and older. The condition results in red, scaly and extremely itchy crusted bumps.
The phosphodiesterase 4 (PDE-4) inhibitor was tested in two placebo-controlled trials with a total of 1,522 participants that ranged in age from two to 79 years. The FDA said overall, participants receiving Eucrisa achieved greater response with clear or almost clear skin after 28 days of treatment. The FDA said the most common side effect was burning or stinging when the gel was applied.
Pfizer pointed out that approximately 90% of people living with AD have the mild to moderate form of the condition. "The approval of Eucrisa is great news for the children and adults suffering from mild to moderate eczema, a community that has not had a new prescription treatment for more than 10 years," Albert Bourla, group president, Pfizer Innovative Health, said in a
statement
.
Pfizer closed its buyout of Anacor in June, a bite-sized deal it
knocked off
shortly after it halted its planned buyout of Allergan. The company abandoned that plan after tax rule changes made them it less appealing.
December 14, 2016 -
Fierce Pharma
Just a month after details of a wide-ranging generics price fixing probe made their way to the public, the Justice Department has stepped forward with its first charges. Prosecutors are determined they won't be the last.
Two former execs at New Jersey-based Heritage Pharmaceuticals, Jeffrey Glazer and Jason Malek, face charges of conspiring to "fix prices, rig bids and allocate customers" for the antibiotic doxycycline hyclate for more than two years. Authorities also claim the men "conspired to fix prices and allocate customers" for the diabetes drug glyburide for more than a year.
"Conspiring to fix prices on widely-used generic medications skews the market, flouts common decency-and very clearly breaks the law," Special Agent in Charge Michael Harpster of the FBI's Philadelphia Division said in a
statement.
Glazer previously served as CEO of New Jersey-based Heritage Pharmaceuticals while Malek was president there, according to past
releases
and
web records
. Bloomberg
reports
the suspects plan to plead guilty.
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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
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