Week of January 23, 2017 | Vol. 6, Issue 2
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Lilly buys migraine biotech CoLucid, and the drug it outlicensed, for $960M
Eli Lilly says it will spend nearly $1 billion to buy out CoLucid Pharmaceuticals and get its hands on its late-stage acute migraine candidate, which Lilly outlicensed to the company back in 2005.
The all-cash transaction works out to $46.50 a share, after trading at $34.90 at end of play yesterday.
Lilly said in a
statement
that this will "enhance its existing portfolio in pain management for migraine," while also adding a potential near-term launch to its late-stage pipeline.
This drug, lasmiditan, is an oral 5-HT1F agonist and has already finished the first of two pivotal phase 3 trials.
A data readout for the second test, known as SPARTAN, is expected in the second half of 2017. "If this trial is positive, submission of lasmiditan for U.S. regulatory approval could occur in 2018," the pair say.
Lasmiditan was originally discovered at Lilly and was outlicensed to CoLucid 12 years ago. "At the time lasmiditan was out-licensed, pain management was not a strategic area of focus for Lilly," the company said, but added that it has "since reorganized its research and development efforts to focus on migraine as part of its emerging therapeutic area of pain."
The Big Pharma figures that as many as 36 million people suffer from migraine in the U.S. and sees lasmiditan, if approved, as being a first-in-class therapy to treat migraine through a new mechanism of action, and without vasoconstriction.
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Republican Governors Warn Lawmakers About Repeal of Affordable Care Act
In recent comments and letters to Republican House leaders who sought input from state officials on potential health-system changes, several governors have voiced concerns about the effects of abruptly scrapping the 2010 law. Nine governors and two lieutenant governors attended a Thursday roundtable held by Senate Finance Committee Republicans on the future of the health law's Medicaid expansion.
Ohio Gov. John Kasich, who attended Thursday's meeting, has been outspoken about the potential jolt to 700,000 people covered by the expansion of Medicaid in his state under the law. He has said this group includes drug addicts and the mentally ill.
In a letter to Congress Wednesday, Mr. Kasich, who ran unsuccessfully for the 2016 GOP presidential nomination, cited problems with the current health law, but warned of destabilizing consequences if Congress repeals that law without a simultaneous replacement.
"There's room for improvement, but to repeal and not to replace, I just want to know what's going to happen to all those people who find themselves left out in the cold," Mr. Kasich said at a recent news conference.
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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
15 transactions totaling $1,253
million
Supplies, Equipment & Services
19 transactions totaling $771 million
Healthcare IT & Managed Care
3 transactions totaling $- million
Healthcare Facilities & Distributors
9 transactions totaling $4 million
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Pharma & Biotech
5 private placements totaling $34 million
Supplies, Equipment & Services
11 private placements totaling $76 million
Healthcare IT & Managed Care
6 private placements totaling $73 million
Healthcare Facilities & Distributors
0 private placements
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Pharma & Biotech
11 public offerings totaling $293 million
Supplies, Equipment & Services
4 public offerings totaling $272 million
Healthcare IT & Managed Care
0 public offerings
Healthcare Facilities & Distributors
0 public offerings
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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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January 18, 2017 -
Wall Street Journal
Irish drugmaker
Mallinckrodt PLC and a U.S. subsidiary will pay $100 million and agree to other conditions to settle government antitrust allegations they unlawfully prevented competition for Acthar, a drug that has seen enormous price spikes in recent years.
The Federal Trade Commission and attorneys general from New York and four other states alleged the U.S. subsidiary, formerly known as Questcor Pharmaceuticals, violated antitrust laws when it acquired the rights to a competing drug, Synacthen, that threatened its monopoly in the U.S.
The Food and Drug Administration originally approved Acthar, an injected drug, in 1952, and it eventually became used as a treatment for many conditions including multiple sclerosis.
Generics set to undercut blockbusters from Merck, Novartis and Bristol-Myers
January 17, 2017 -
Fierce Pharma
Several blockbusters are set to take a nosedive this year as patent losses hit Novartis, Merck & Co., Bristol-Myers Squibb and other top pharma companies.
Dickson Data has
compiled
a list of major drugs losing their IP protection this year, and standing at the top is Novartis' Sandostatin LAR with $1.6 billion in annual sales. Used to treat acromegaly and severe diarrhea and flushing associated with carcinoid syndrome, the drug will quickly face generic erosion from a slew of companies, including Teva, Sun Pharma, Sagent Pharmaceuticals and Wockhardt.
Behind Sandostatin LAR is Merck's antibiotic Cubicin, a key prize in the New Jersey pharma giant's $9.5 billion
purchase
of Cubist Pharmaceuticals back in 2014. The drug currently tallies $1.17 billion in sales, according to Dickson, and is set to face cheaper rivals from Hospira, Teva and Crane Pharma, FDA records show.
January 16, 2017 - Fierce Pharma
Pharma is fast becoming President-elect Donald Trump's favorite whipping boy. Last month, Trump vowed to
bring down drug prices. Last week, he
slammed the industry for "getting away with murder." And Saturday, he promised the Washington Post he'd subjugate drugmakers with the power of the tweet.
"They're politically protected, but not anymore," Trump
told
the newspaper.
Whereas Trump last week declared he'd institute competitive bidding to control the prices government programs pay for drugs, he reverted over the weekend to Medicare price negotiation, a mainstream proposal he'd
backed during his campaign.
This time, the president-elect told the Post that he'd push for price negotiation in both Medicare and Medicaid, though the latter program is already entitled to pharma's lowest prices.
January 17, 2017 -
Fierce Pharma
Sanofi and Regeneron have made their bid for a Praluent reprieve. In the wake of a district judge's patent ruling that could push the partners' new cholesterol drug off the market, the two companies are asking the Federal Circuit Court to delay long enough to hear their appeal in the case.
Earlier this month, U.S. District Judge Sue Wilson granted rival drugmaker Amgen's request for an injunction blocking Praluent from the market. The two drugs work to dramatically lower "bad" LDL cholesterol by inhibiting the PCSK9 protein, and Amgen claims that Praluent steps on its PCSK9 patents.
Before that injunction was granted, Sanofi and Regeneron had been expected to strike a royalties deal with Amgen, giving the Big Biotech a share of their Praluent yield. But now, analysts are discounting the prospect of a settlement. In less than 45 days, Amgen's Repatha could have the PCSK9 market all to itself-and analysts say that would give Amgen the power to negotiate better prices with payers, in addition to capturing every PCSK9 prescription.
If Sanofi and Regeneron's appeal doesn't succeed, that is. In addition to appealing the lower court's decision validating Amgen's patents, the two companies are asking the Federal Circuit to postpone the date the injunction takes effect long enough for their appeal to be heard.
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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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