On March 4, the board of Nightstar Therapeutics (NITE) and Biogen Switzerland Holdings, a subsidiary of Biogen (BIIB), announced that they had reached agreement on the terms of a recommended acquisition whereby the entire issued and to be issued share capital of Nightstar will be acquired by Tungsten Bidco, a subsidiary of Biogen Switzerland. The acquisition is to be effected by means of a court-sanctioned scheme of arrangement under Part 26 of the Companies Act 2006 and is subject to the terms and conditions set out in the scheme document relating to the acquisition. Nightstar announced that the scheme document is being sent, or made available, to Nightstar Shareholders immediately. The scheme document contains, amongst other things, a letter from the chairman of Nightstar, the full terms and conditions of the scheme and the acquisition, an explanatory statement pursuant to section 897 of the Companies Act 2006, an expected timetable of principal events and details of the actions to be taken by Nightstar shareholders, together with the forms of proxy for the court meeting and the general meeting. Completion of the acquisition also remains conditional on the satisfaction or waiver of the other conditions set out in the scheme document and the approval of the court. The acquisition is expected to become effective during the middle of the year.
Tuesday, April 9, 2019
What Livongo and Change Healthcare’s IPOs means for digital health competitors
Digital healthcare investors have been opening their wallets, with the hopes that devices, algorithms and patients’ desire to control their personal health data will equal big business. Now these same investors are ready to see the payouts as these companies file for initial public offerings, according to CNBC.
Livongo, a provider of services and tools for patients to monitor chronic medical conditions, is leading the digital health IPO pack. The company has reportedly hired bankers for its IPO. It is expected to take time for public market investors to determine if the company’s business model can generate predictable revenue.
“There hasn’t [been] a true digital health IPO,” Marc Albanese, senior director of research at CB Insights, told CNBC. “So, there is a bit of pressure on Livongo.”
Change Healthcare is also leading the digital IPO trail. The company, which provides technology to reduce the costs of healthcare, filed its prospectus in March.
“To have a well-funded digital health company performing well and going public, it validates the digital health thesis,” Blake Wu, a health investor at venture capital firm New Enterprise Associates told CNBC.
Many of the digital health companies that have filed for IPOs have been familiar to Wall Street. Veeva Systems and AthenaHealth sell cloud-based software and Fitbit sells devices. Both business models were common knowledge on Wall Street.
The digital health companies making a push for IPOs now are a little different as they emphasize the combination of technology and services, according to CNBC. This might include app-based behavioral coaching or nudges to promote healthy behavior.
“Livongo is truly a cross between health and tech,” Mr. Albanese said. “Its performance will set the tone for how similar companies are received, which makes it so important.”
China online plastic surgery marketplace So-Young Intl files for $150M US IPO
So-Young International, a China-based online marketplace for plastic surgery services, filed on Monday with the SEC to raise up to $150 million in an initial public offering.
The Beijing, China-based company was founded in 2013 and booked $92 million in revenue for the 12 months ended December 31, 2018. It plans to list on the Nasdaq under the symbol SY. So-Young International filed confidentially on December 26, 2018. Deutsche Bank and CICC are the joint bookrunners on the deal. No pricing terms were disclosed.
Cancer biotech Turning Point Therapeutics sets terms for $125M IPO
Turning Point Therapeutics, an early stage biotech developing tyrosine kinase inhibitors for treating cancer, announced terms for its IPO on Monday.
The San Diego, CA-based company plans to raise $125 million by offering 7.4 million shares at a price range of $16 to $18. Insiders intend to purchase $50 million worth of shares in the offering (40% of the deal). At the midpoint of the proposed range, it would command a fully diluted market value of $524 million.
Turning Point Therapeutics was founded in 2013 and plans to list on the Nasdaq under the symbol TPTX. Goldman Sachs, SVB Leerink and Wells Fargo Securities are the joint bookrunners on the deal. It is expected to price during the week of April 15, 2019.
Immuno-oncology biotech Hookipa Pharma sets terms for $100 million IPO
Hookipa Pharma, a Phase 2 biotech developing T cell immunotherapies for various cancers, announced terms for its IPO on Monday.
The New York, NY-based company plans to raise $100 million by offering 6.7 million shares at a price range of $14 to $16. Insiders intend to purchase $40 million worth of shares in the offering (40% of the deal). At the midpoint of the proposed range, Hookipa Pharma would command a fully diluted market value of $412 million.
Hookipa Pharma was founded in 2011 and plans to list on the Nasdaq under the symbol HOOK. BofA Merrill Lynch, SVB Leerink and RBC Capital Markets are the joint bookrunners on the deal. It is expected to price during the week of April 15, 2019.
Monday, April 8, 2019
Novartis CEO figures M&A’s the way toward ‘transformative’ innovation
When Novartis acquired AveXis for $8.7 billion last year, it was betting the smaller company’s gene therapy for spinal muscular atrophy could soar to blockbuster levels. That therapy, Zolgensma, is closing in on FDA approval—and Novartis CEO Vas Narasimhan has ambitious plans for more M&A.
Narasimhan is just one year into his stint as CEO of the Swiss pharma giant, but he’s already established himself as a dealmaker. He not only engineered the AveXis deal last year, he also picked up the radiotherapy company Endocyte for $2.1 billion.
And now, Narasimhan says he plans to spend at least $10 billion a year on acquisitions. “We’ll have to be on top of the next wave of innovations,” he told Bloomberg, adding that he’s searching for acquisition targets that would have a “transformative effect” on Novartis.
He figures Novartis has more to offer than money, too. In anticipation of Zolgensma’s launch, Novartis acquired a former AstraZeneca manufacturing site in Colorado last week. The purchase came just weeks after the company announced plans to double the size of a manufacturing plant it’s building in North Carolina.
The additional manufacturing capacity, particularly in Colorado, could be a selling point for small gene therapy companies that might be looking to make deals with Novartis, Narasimhan told Bloomberg.
The company’s widening presence in gene and cell therapies has not come without difficulties, however. Novartis has yet to disclose its pricing plans for Zolgensma, but the expectation of a $2 million price tag has already generated controversy.
The Institute for Clinical and Economic Research (ICER) used $2 million as a placeholder price in assessing Zolgensma, and the group concluded last week that it wouldn’t be cost effective at any price over $1.5 million.
AveXis president Dave Lennon told FiercePharma that the company supports alternative payment models for Zolgensma, such as installments spread over time or outcomes-based reimbursement plans. Narasimhan echoed that sentiment in the recent interview—and provided more details about how the payment model for Zolgensma might work.
Narasimhan told Bloomberg that the payment scheme would allow payers to spread reimbursement over five years. If any patient showed signs that the gene therapy had failed within that period, Novartis would pay the insurance company back.
“We want something with a massive effect in order to make a credible case to society to invest in these medicines,” Narasimhan told Bloomberg. “I think ultimately payers will come around.”
That confidence in the payer community’s willingness to fund high-priced therapies will no doubt drive Novartis’ M&A strategy going forward. The company is looking for “bolt-on” deals to build its market share in key areas of focus like neurology and metabolic disease.
During Novartis’ fourth-quarter earnings call in January, one analyst asked Narasimhan to explain his goal of spending $10 billion a year on acquisitions. The CEO replied that the goal is actually “to do M&A in the range of up to 5% of our market cap,” which would amount to $10 billion.
The main goal, however, is to build upon “these new … advanced therapy platforms where we want to lead,” he said, adding “bolt-on M&A has to be part of that strategy.”
Novartis Spins Off Alcon, Eyes Innovative Medicines Margin Improvements
Novartis AG (NOVN.EB) said Tuesday it has completed its spinoff of the Alcon eye-care devices business and said it plans to improve core margins in innovative medicines by 2022.
The Swiss pharmaceutical company said the Alcon spinoff was carried out via a dividend-in-kind distribution to Novartis shareholders and American Depository Receipts holders. Each holder received one Alcon share for every five Novartis shares or ADRs held at the close of business on April 8, the company said.
Novartis said the spinoff gives it a financial profile close to that of its industry peers, and said it is well-positioned for sustained top- and bottom-line growth. The company plans to improve innovative medicine core margins into the mid-30s by 2022.
Vas Narasimhan, chief executive of Novartis, said: “We continue to reimagine ourselves as a leading medicines company powered by breakthrough medicines, data science and advanced therapy platforms.”
Novartis said it plans to continue paying a “strong and growing” annual dividend up from the 2.85 Swiss francs ($2.85) a share paid in 2019, with no adjustments for the Alcon spinoff.
The company said it expects to complete its previously announced share-buyback program of up to $5 billion by the end of the year.
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