GSK Commences Tender Offer for TESARO

GlaxoSmithKline plc (LSE/NYSE: GSK) (‘GSK’) today announced that it is commencing a cash tender offer for all of the issued and outstanding shares of common stock of TESARO, Inc. (NASDAQ: TRSO) (‘TESARO’) for a price of $75.00 per share. The tender offer is being made pursuant to an Offer to Purchase, dated December 14, 2018, and in connection with the previously announced Agreement and Plan of Merger, dated December 3, 2018, among GSK, Adriatic Acquisition Corporation, an indirect wholly-owned subsidiary of GSK (‘AAC’) and TESARO (the ‘Merger Agreement’).

The tender offer commenced on December 14, 2018 and will expire at one minute past 11:59 P.M., Eastern Time, on January 14, 2019 (the ‘Expiration Date’), unless otherwise extended or terminated. Any extensions of the tender offer will be followed as promptly as practicable by public announcement thereof, and such announcement will be made no later than 9:00 A.M., Eastern Time, on the next business day after the previously scheduled Expiration Date.

GSK, GlaxoSmithKline LLC (‘GSK LLC’) and AAC have filed a tender offer statement on Schedule TO with the United States Securities and Exchange Commission (the ‘SEC’). The Offer to Purchase contained within the Schedule TO sets out the terms and conditions of the tender offer.

TESARO will file a Solicitation/Recommendation Statement on Schedule 14D-9 (the ‘Schedule 14D-9’) with the SEC, which includes, among other things, the recommendation of TESARO’s board of directors that TESARO stockholders tender all of their shares in the tender offer.

As soon as practicable following the completion of the tender offer, AAC will acquire all remaining TESARO shares through a merger at the tender offer price.

The tender offer and the merger are subject to customary closing conditions, including (i) the tender by TESARO stockholders of at least one share more than 50% of the issued and outstanding shares of TESARO (as calculated pursuant to the terms of the Merger Agreement) and (ii) required regulatory approvals, including the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, having expired or been terminated. The tender offer is subject to other important conditions set forth in the Offer to Purchase.

Concurrently with entering into the Merger Agreement, GSK and AAC entered into Tender and Support Agreements with each of Mary Lynne Hedley, Ph.D., New 15 Opportunity Fund, L.P., Leon O. Moulder, Jr., KPCB Holdings, Inc. and New Enterprise Associates 13, L.P. (collectively, the ‘Supporting Stockholders’), pursuant to which such Supporting Stockholders agreed to tender their shares into the tender offer. As of December 10, 2018, the Supporting Stockholders collectively, directly and indirectly own approximately 25.7% of all issued and outstanding shares of TESARO.

https://www.marketscreener.com/GLAXOSMITHKLINE-9590199/news/GlaxoSmithKline-GSK-Commences-Tender-Offer-for-TESARO-Inc-27755358/

HCA on Track for Largest Percent Decrease Since November 2016

HCA Healthcare Inc. (HCA) is currently at $127.75, down $8.57 or 6.29%

— Would be lowest close since Oct. 25, 2018, when it closed at $127.06

— On pace for largest percent decrease since Nov. 9, 2016, when it fell 10.78%

— Snaps a two-day winning streak

— Down 11.28% month-to-date

— Up 45.43% year-to-date; on pace for best year since 2014, when it rose 53.83%

— Up 44.42% from 52 weeks ago (Dec. 15, 2017), when it closed at $88.46

— Third-worst performer in the S&P 500 today

https://www.marketscreener.com/HCA-HOLDINGS-HOSPITAL-CO-7534808/news/HCA-Healthcare-Down-Over-6-on-Track-for-Largest-Percent-Decrease-Since-November-2016-Data-Talk-27756478/

J&J $40B loss in market cap on talc report ‘seems excessive,’ says Wells Fargo

Wells Fargo analyst Lawrence Biegelsen believes Johnson & Johnson shares have been oversold based on today’s Reuters article suggesting that the company knew about asbestos in its baby powder for decades but never told the FDA. He believes any potential settlement should be manageable for J&J, noting that even if all 11,700 talc cases were settled at the highest per case settlement amount among the cases he has tracked, the total liability would be $3.3B. He estimates that the stock has lost over $40B of its market cap so far, which seems excessive based purely on the potential outcomes of the talc litigation. Biegelsen keeps an Outperform rating on Johnson & Johnson shares.
https://thefly.com/landingPageNews.php?id=2837467

Pfizer announces new $10B share repurchase program

The board of directors of Pfizer authorized a new $10B share repurchase program to be utilized over time. This new program is in addition to the $4.9B remaining under the company’s current authorization.
https://thefly.com/landingPageNews.php?id=2837483

Abbott raises quarterly dividend 14% to 32c per share

The board of directors of Abbott increased the company’s quarterly common dividend to 32c per share, marking a 14% increase. The cash dividend is payable Feb. 15, 2019, to shareholders of record at the close of business on Jan. 15, 2019.
https://thefly.com/landingPageNews.php?id=2837451

Tesaro proxy documents point to interest in PARP economics, says Leerink

Leerink analyst Andrew Berens noted that GlaxoSmithKline (GSK) and Tesaro (TSRO) disclosed background details for their deal agreement in a filing this morning. The documents show several parties were interested in a strategic transaction with Tesaro at various points over the last year, though the strategic interest appears to have been driven by Glaxo and one additional company, identified as “Party A”, Berens said. It is not clear why the six other contacted parties were not interested in pursuing a strategic transaction, but he thinks Party A’s co-promote proposal and the initial interest of other potential acquirers indicates strategic interest in the economics surrounding a PARP. Berens, who continues to see Clovis (CLVS) being well-positioned as the remaining stand-alone PARP-focused company, keeps an Outperform rating on Clovis and Market Perform rating on Tesaro.

https://thefly.com/landingPageNews.php?id=2837449

Clovis drops after Tesaro filing shows interest, but no bids

Shares of Clovis Oncology (CLVS) dropped in morning trading in response to a regulatory filing from Tesaro (TSRO) that showed no other bidders for the company besides GlaxoSmithKline (GSK), which announced a $75 per share offer on December 3.

TESARO FILING: According to a regulatory filing by Tesaro detailing its $75 per share takeover offer from GlaxoSmithKline, Tesaro evaluated a potential co-development collaboration with respect to Zejula, as well as potential financing alternatives available to the company to fund its long-range plan. While several parties were interested in a strategic transaction with Tesaro at various points over the last year, true strategic interest in the company was likely driven by GlaxoSmithKline and one additional company, “Party A,” a large biopharmaceutical company with global expertise in oncology R&D and commercialization. The company’s review of strategic alternatives found that the majority of companies were more interested in buying royalty, licensing or co-development rights instead of pursuing an outright acquisition. On December 3, GlaxoSmithKline said it would buy cancer-focused drug company Tesaro for about $4.16B. In acquiring Zejula, Tesaro’s ovarian cancer drug, GlaxoSmithKline will compete with AstraZeneca’s (AZN) market-leading Lynparza, as well as a poly ADP ribose polymerase, or PARP, inhibitor from Clovis Oncology. Zejula’s sales have lagged behind rivals, with doctors and industry officials saying the treatment’s side-effect profile is worse than the other drugs. Tesaro unsuccessfully explored a potential sale more than a year ago, with four companies — not including Glaxo — executing non-disclosure agreements and performing due diligence, but ultimately failing to reach an agreement.

ANALYST COMMENTARY: Gabelli analyst Je Hing recently highlighted Clovis as a likely takeout target, telling investors earlier this week in a research note that with the Tesaro  acquisition by GlaxoSmithKline, Clovis will become the only standalone PARP. He named Bristol-Myers (BMY), Sanofi (SNY) and Roche (RHHBY) as the most interested buyers. Leerink analyst Andrew Berens said on Friday that he sees “Party A’s” interest, including the final offer of $2.34B including upfront and contingent payments for a 50/50 profit split, as validating for interest in the PARP class and valuation. He thinks Clovis shares might see some weakness today, as investors may have been hopeful that the filing would have included additional interested parties or acquisition offers for Tesaro, suggesting a competitive process. The analyst said investors may interpret the lack of additional takeover offers in the home stretch as suggesting there is no buyer for Clovis, but caution that Clovis would likely receive different types of suitors than Tesaro because of differences in the the companies’ profiles.

https://thefly.com/permalinks/entry.php/id2837459/CLVS;TSRO;GSK;RHHBY;AZN;BMY;SNY-Clovis-drops-after-Tesaro-filing-shows-interest-but-no-bids