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June 16, 2014 Issue:
Recent Health Care M&A Deals
Behavioral Health Care
Acquirer
Target
Price
Harbor, Inc.
Behavioral Connections
of Wood County, Inc.
Merger
Biotechnology
Kite Pharma, Inc.
License for T-Cell Receptor
N/A
Celsion Corporation
EGEN, Inc.
$14 million
NovaDigm Therapeutics
Rights to 3 antigens
N/A
Hospitals
Stanford Hospital
Valley Care Health System
Merger
Technology Deal of the Week
The hepatitis C virus (HCV) is rocking pharmaceutical M&A, starting last Monday with Merck’s (NYSE: MRK) offer of $3.85 billion for Idenix Pharmaceuticals (NASDAQ: IDIX). The price, representing $24.50 per share, was a 235% premium to IDIX’s prior-day closing price of $7.23. Idenix’s big draw was its three hepatitis C drug candidates, all in clinical development, and the fact that Gilead Sciences (NASDAQ: GILD) got away with pricing its highly successful HCV drug, Sovaldi, at $1,000 per pill. The next day, Achillion Pharmaceuticals (NASDAQ: ACHN) announced that the FDA removed the clinical hold on its experimental HCV treatment, making it the subject of takeover rumors. On Wednesday, OraSure Technologies (NASDAQ: OSUR) maker of point-of-care diagnostics, announced an agreement with AbbVie (NYSE: ABV) to co-promote its OraQuick HCV Rapid Test in the United States, worth up to $75 million in exclusivity payments through 2019. This virus is contagious, for sure. . ……….Want to read more news? Click here for a free trial to The Health Care M&A Information Source and download the current issue today.
Charted Territory
Interest in health care on the part of private equity firms is at a fever pitch, judging by the number of conferences on the subject. So far this year, PE firms and portfolio companies have spent $7.1 billion in the healthcare space. The momentum isn’t building, however. In Q1:14, we recorded 116 deals announced by private firms, with a total of $4.9 billion in disclosed prices. With about two weeks left to go in Q2:14, just such 75 deals have crossed our radar, with a total of $2.2 billion in disclosed prices. It’s too early to tell if this trend will play out through the rest of the year. Judging by the talk we’ve heard at some of those conferences, though, PE players may start looking elsewhere for better values.
Top 5 Health Care Transactions by Private Equity Firms, through June 13
Acquirer
Target
Price
Cinven Capital Management
Medpace, Inc.
$915 million
Clayton, Dubilier & Rice, LLC
Healogics Holding Corp.
$910 million
Montagu Private Equity
Rexam’s healthcare units
$805 million
Sterigenics International, LLC
Nordion Inc.
$758 million
Summit Partners
ABILITY Network
$550 million
Source: The Health Care M&A News, June 2014
Want to read more news? Click here for a free trial to The Health Care M&A Information Source and download the current issue today
Services Deal of the Week
Despite the slowdown in PE investing noted above, PE firms are still focused on the services side of healthcare. Last week Stone Point Capital LLC, through one of its Trident Funds, acquired managed care company LTCG, formerly known as Long Term Care Group. LTCG is the largest provider of comprehensive outsourcing and claims management to long-term care insurers. It administers over 1.4 million policies, representing nearly 20% of all private long-term care insurance……..Want to read more news? Click here for a free trial to The Health Care M&A Information Source and download the current issue today.
In the Pipeline
Aduro BioTech, Inc., a clinical-stage biotech company based in Berkeley, California, closed a $55 million Series C financing last week, thanks to its biggest benefactor, Johnson & Johnson (NYSE: JNJ). M&A fans will recall the May 29 announcement by JNJ subsidiary Janssen Biotech that it would pay Aduro BioTech $365 million, including upfront license fees, milestones and royalties, for the worldwide license to certain product candidates specifically engineered to treat prostate cancer. The C-round funding included Johnson & Johnson Development Corporation and the Morningside group, as well as new and existing investors……..Want to read more news? Click here for a free trial to The Health Care M&A Information Source and download the current issue today.
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