In the March 2007
issue:
February’s Hospital M&A Market - Triad
Hospitals Privatized In $6.4 Billion Deal
February saw a resurgence of for-profit Hospital M&A as Triad Hospitals was
taken private by a group of private equity firms in a transaction worth $6.4
billion. Not-for-profit operators around the country are pondering whether
to stay independent or merge.
...
Pharma Captures Big Bucks - Ten Deals
Announced Worth A Combined $7.5 Billion
Ten Pharma deals were announced in February, totaling $7.5 billion. As
branded drugs go off patent, some are being acquired and re-marketed in
specialty niches. Big pharma continues search for drug candidates to
replenish disappearing blockbusters.
...
In The Departments
Services
February’s M&A Market
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Health Care Services
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Deal Summaries
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Additional Transactions
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Transaction Updates
Technology
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Health Care Technology
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Deal Summaries
Additional Transactions
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Transaction Updates
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Articles Archive
Companies Mentioned in this issue:
March 2007
3i p10
3M p16
A
Acambid plc p10
Acolyte Biomedica p16
Actavis p9
Adeza Biomedical Corporation p15
Adiana p15
Adnexus p10
Advanced Cell Technology p13
Advanced Healthcare p7
AEW Senior Housing p4
Allergan p9
Alta Partners p10
Altana Pharma AG p10
AmSurg Corp. p8
Anaheim Memorial Medical Center p3
Angelo Gordon & Co. p4
ARCH Venture Partners p8
Arrow Therapeutics p10
Astellas Pharma, Inc. p10
AstraZeneca p10
Atlas Venture p10
Aurobindo Pharma Ltd. p9
Aurora Healthcare p7
Avista Capital Partners p7
Azyxxi p15
B
Banc of America Securities p1
Baptist Health System p3
Barr Pharmaceuticals p14
Bear, Stearns & Co. p8
Beaumont Hospitals p3
Bharat Biotech International, Ltd. p10
Bio-Imaging Technologies p8
BioReliance Corp. p7
BioRexis Pharmaceutical Corporation p14
BioSource Europe, S.A. p8
Bon Secours Cottage Health Services p3
Bon Secours Health System p3
Bristol Consultants p7
Bristol-Myers Squibb p10
C
Canyon Creek Development, LLC p4
Caremark Rx p8
Carolinas HealthCare System p2
CB Richard Ellis p4
CCMP Capital Advisors, LLC p1
Cepheid p10
Chartwell Seniors Housing REIT p4
Cipla Ltd. p9
Coloplast A/B p16
Compass Capital p16
Concentra Operating Corp. p7
Core Oncology p16
Coventry Health Care p7
CVS Corporation p8
Cytyc Corporation p15
D
Dako Denmark A/S p15
Dakota Clinic/Innovis Health p3
Datascope Corp. p16
Detroit Medical Center p3
Dr. Reddy’s Laboratories p9
E
EndoArt, SA p16
EQT p15
Essentia Health p3
Excelsis Healthcare p7
Express Scripts p8
F
Familymeds p8
First Check Diagnostic, LLC p16
G
Galderma, S.A. p9
GIMV p10
GlaxoSmithKline p10
Goldman Sachs p1
GS Capital Partners p1
H
Health Management Associates p2
Healthcare Financial Management Association p2
Healthcare Realty Trust p4
Healthcare Transactions Group p4
Heavenrich & Company p7
HemoCue p15
Henry Ford Health System p3
HIG Capital p2
Holladay Care Center p4
I
Ikaria p8
Ikaria Holdings p8
Infigen, Inc. p13
INO Therapeutics p8
Inpatient Services p7
Interim Healthcare of Louisville, Inc. p4
Inverness Medical p16
Invitrogen Corp. p7
IPC-The Hospitalist Co. p7
Ipsen p9
ITX p10
J
Johnson & Johnson p14
K
Kelly Home Care Services p3
Kelly Services p3
Kindred Healthcare p4
Kingsport Consultants p7
L
Larkin Community Hospital p2
Lexington Memorial Hospital p2
L’Oréal p9
M
Marcus & Millichap p4
Maternal Child Health p4
McKesson Corp. p14
Medical Associates Health Centers p7
Medical Personnel Pool of Louisville, Inc. p4
Medstory p15
Memorial Health Services p3
Mentor Corp. p16
Merck & Co. p8
Merck KgaA p9
Merit Medical Systems p16
Merlin BioMed Group p10
Merrill Lynch p8
Metropolitan Health Community Services p2
Microsoft p15
Mitsubishi Chemical Holding p1
Mitsubishi Pharma Corp. p1
Modern Medical Modalities p15
MTI-II Partners, LP p15
N
National Home Health Care p4
Nestlé p9
New Mountain Capital p8
New River Pharmaceuticals p1
NIF Partnership p10
Nightingale Informatix Corporation p14
NorthEast Medical Center p2
Novartis p9
Novo Nordisk p15
Nycomed p10
O
Oakwood Healthcare System p3
P
Pan American Hospital p2
Paradise Preservation Group p3
Paradise Valley Hospital p2
Pediatric Services of America p4
Pfizer p13
Physician Micro Systems p15
Pliva p14
Practice Partner p14
Premier Home Health Care Service p4
Presbyterian Healthcare p2
Prime Healthcare Services p2
ProHealth Care p7
Promesan, S.r.L. p16
Q
Quest Diagnostics p15
R
Ranbaxy Laboratories p9
Regency Care p4
ResCare p3
ResVerlogix p13
RevolutionHealth p15
S
Salix Pharmaceuticals p8
Sandoz p9
Sangtec Diagnostics p10
sanofi-aventis p10
Senior Lifestyle Corporation p4
Shire Pharmaceuticals Group plc p1
Sistema de Salud Metropolitano p2
Sound Inpatient Physicians p7
Southern Home Care Services p4
St. John Health System p3
Sun Healthcare Group p7
SunBridge Healthcare p7
T
Tanabe Seiyaku Co. p1
Teva p9
The Ensign Group p4
The Heritage p4
The Linde Group p8
The Ryerson Company p4
The Village at Lake Norman p4
Theralys p8
Triad Hospitals p1
Trilogy Long-Term Care p4
TVM Capital p10
U
Unibio p10
United Health Care p2
V
Valeant Pharmaceuticals p9
VantageMed p14
Venrock Associates p8
W
Walgreen Co. p8
Walton Street Capital, LLC p4
WellPoint p7
Wellspring Partners p3
Wilkerson Health Care p4
WSL Heritage Investors V p4
X
XenoPort p10 |
Pharma Captures Big Bucks - Ten Deals
Announced Worth A Combined $7.5 Billion
Email Editor
The Pharmaceutical sector
generated 10 deals in February, worth a combined total of $7.5 billion.
Two of the 10 were billion-dollar deals. The largest involves the $4.3
billion combination of Tanabe Seiyaku Co. (T: 4508) and
Mitsubishi Pharma Corp., a subsidiary of Mitsubishi Chemical
Holding (T: 4188). The transaction was discussed in last month’s
column, but is included in this month’s statistics.
Shire Pharmaceuticals Group plc
(NASDAQ: SHPGY) is acquiring New River Pharmaceuticals (NASDAQ:
NRPH) for $64.00 per share, for a total purchase price of $2.6 billion.
New River is a specialty pharma company based in Virginia and focused on
developing novel drugs. While on a trailing 12-month basis, NRPH generated
revenue of just $32.0 million and a net loss of $17.2 million, it is
codeveloping a promising drug with Shire to treat ADHD, Vyvanse,
which should significantly boost revenue if approved.
This deal gives Shire full
control of the ADHD drug that the two collaborators have been developing.
So far, the drug has received two approvable letters from the FDA. It is
fervently hoped that Vyvanse will prove to be a worthy successor to
Shire’s Adderall XR ADHD treatment—which is due to lose patent protection
in 2009—and generate $1.0 billion a year. The purchase price offers NRPH
shareholders a 10 percent premium to the stock’s prior-day price. The
founder of New River has pledged his 50.2 percent stake in the company to
the deal. Bear, Stearns & Co. and Merrill Lynch are serving
as financial advisors to NRPH in this transaction.
The Linde Group
(DE: LIN), based in Wiesbaden, Germany, is selling INO Therapeutics,
a Clinton, New Jersey-based specialty pharma company, to Ikaria, a
Seattle-based biotech, for €380.0 million ($498.7 million), or 2.9x
revenue. INO specializes in therapies that utilize gaseous drugs, such as
inhaled nitric oxide for treating hypoxic respiratory failure in newborns.
Including the amount to be paid to shareholders of Ikaria, the total
transaction value rises to about $670.0 million. The combination of the
two companies, under Ikaria Holdings, an investment company, will
create a leading therapeutic gases and critical care company, to be
headquartered in Clinton, New Jersey. The seller will retain a 17 percent
equity position in the combined company. This merger is being financed by
private equity and venture capital firms, including New Mountain
Capital, ARCH Venture Partners and Venrock Associates.
Salix Pharmaceuticals
(NASDAQ: SLXP) is paying up to $61.0 million to acquire the U.S.
prescription product rights to the gastrointestinal drugs Pepcid
and Diuril oral suspension from Merck & Co. (NYSE: MRK).
Consideration consists of a $55.0 million upfront payment and $6.0 million
in potential sales-based milestone payments. This acquisition, valued at
3.1x revenue, expands SLXP’s portfolio and diversifies its revenue
sources. SLXP hopes to squeeze out the last bit of value from these
relatively mature drugs by marketing them in a well-defined niche: the
company intends to add them to an institutional product portfolio of drugs
that concentrates on the pediatric and hospitalized patient populations.
France’s Ipsen (PA:
IPN) is granting exclusive rights to develop and market Dysport as
an anti-wrinkle treatment to Galderma, S.A. for $39.5 million. A
joint venture between Nestlé (SWX: NESN) and L’Oréal (PA:
OREP), Galderma is headquartered in Switzerland and is involved in
therapeutic, corrective and esthetic solutions for dermatology patients.
Dysport is a botulinum toxin type A drug, known as Reloxin
in the U.S. esthetic market.
Under terms of the deal,
Galderma is to pay €10.0 million in an upfront payment and €20.0 million
in certain milestone payments. Royalties are also stipulated in the
transaction. According to the agreement, Galderma is to develop and market
a specific formulation for the esthetic use of Ipsen’s botulinum toxin
type A drug, which was originally developed as a treatment for movement
disorders or muscle spasticity. The new formulation is intended to rival
Allergan’s (NYSE: AGN) Botox in the European Union, Russia,
Eastern Europe and the Middle East. The royalties paid to Ipsen would be
approximately 40 percent of Galderma’s net sales of the product.
Dysport is currently approved for esthetic purposes in 20 countries.
Cambridge Laboratories is
selling rights to Nabilone in the United Kingdom and Europe to
Valeant Pharmaceuticals (NYSE: VRX) for $14.0 million. Nabilone
is used to treat nausea and vomiting associated with cancer chemotherapy
in certain patients. VRX currently sells it both in Canada, where it has
an 87 percent share of the cannabinoid market, and in the United States.
Nabilone is the only licensed cannabinoid in the United Kingdom.
Generic Pharma.
Merck KgaA (DE: MRCG) is expected to auction off its generic pharma
business in March in a deal that could fetch up to €4.0 billion. Several
Indian companies have lined up to bid, including Ranbaxy Laboratories
(BSE: RANB), Dr. Reddy’s Laboratories (NYSE: RDY) and Cipla Ltd.
Iceland’s Actavis (ISE: ACT), Israel’s Teva (NASDAQ: TEVA)
and Novartis’ (NYSE: NVS) Sandoz unit are also likely
bidders. However, both Teva and Novartis are looking to invest into India,
as well. The two are in a race to buy a strategic stake in Aurobindo
Pharma Ltd. (BO: ARVN).
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