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Tuesday, November 12, 2019

JPMorgan puts a number to a Walgreens buyout

JPMorgan crunches the numbers on what a leveraged buyout of Walgreen Boots Alliance (WBA +0.5%) would look like.
“We believe a potential deal could be valued at up to ~$75 per WBA share, based on our assumptions around maximum lease-adjusted leverage and minimum IRR to private equity owners. We assume a maximum lease-adjusted leverage ratio immediately post the deal close of 6.5x (what the company could potentially support based on our discussions with our JPM credit counterparts). Further, we also assume private equity owners would require a minimum IRR of 15% over a five-year period. We also assume an exit multiple of 10.0x forward EBITDA after five years. Using those parameters, we believe that could imply a maximum transaction value of ~$85 billion, which would imply an equity value of ~$74.97 per share (or a ~20% premium to yesterday’s closing price).”
The firm sees some uncertainties that could impact a potential Walgreens deal – including exposure to opioid settlements, Brexit and the political/regulatory environment in the U.S. It’s also unclear if private equity could raise the ~$22B needed based off the JP analysis.

Michigan teen with vape-related illness undergoes double lung transplant

A 17-year-old boy in Michigan is believed to be the first patient to undergo a double lung transplant as a result of irreversible damage done to his organs via vaping. In a press conference on Tuesday, surgeons at Henry Ford Hospital said that without the transplant he would have died.
The teen, pictured during the hospital transfer, "faced certain death" without the transplant.
The teen, pictured during the hospital transfer, “faced certain death” without the transplant. (Henry Ford Hospital)

“Our teen patient would have faced certain death if it were not for the lung transplant happening,” Dr. Hassan Nehmeh, a thoracic surgeon and the hospital’s thoracic surgical director, said at the news conference.

On Sept. 6, the then-16-year-old, who was not identified due to the family’s request for privacy, was admitted to Ascension St. John Hospital in Detroit, where he was treated for suspected pneumonia. When his condition worsened, he was transferred to Children’s Hospital of Michigan, where he was placed on an extracorporeal membrane oxygenation (ECMO) machine to help his lungs heal.
His condition continued to deteriorate, prompting his medical team to contact the lung transplant team at Henry Ford Hospital and begin coordinating his transfer. On Oct. 3, three doctors from Henry Ford placed a portable ECMO machine in their personal car and drove to Children’s Hospital of Michigan. After the youth was switched to the mobile machine, paramedics transported him via ambulance to Henry Ford. There, he went on the transplant waiting list.
Pictured left are the teens severely damaged lungs filled with damaged tissue.
Pictured left are the teens severely damaged lungs filled with damaged tissue. (Henry Ford Hospital)

Nehmeh said the teen’s lungs were firm and thick with damaged tissue that had no chance of healing. The medical team declined to comment on what type of vaping products the teen had been using, or for how long he had been using them.

“This is an evil I have not seen before,” Nehmeh said.
On Oct. 15, the teen underwent a double lung transplant; he has since been taken off a ventilator and is mobile in the hospital but faces weeks of recovery.
Dr. Lisa Allenspach, a pulmonologist at the hospital, read a statement from the family that repeated the request for privacy. They did express the hope that the details of the teen’s ordeal would dissuade others from picking up the vaping habit.
“We are here today to beg the public to pay special attention to the steps that were taken in this case,” said Dr. Nicholas Yeldo, an anesthesiologist at the hospital who has advocated for smoking cessation aimed at teens. “Without the heroic measures, in this case, this young patient would have died there is no doubt about it. I beg of you, this was not just the unlucky one. This is happening way, way too much for us to turn our heads to this.”

The medical team repeated Centers for Disease Control and Prevention (CDC) statistics about the deadly dangers of vaping; there have been 39 fatalities nationwide, and over 2,000 instances of illnesses.
“This is a senseless disease process and preventable death,” Nehmeh said.

Omeros EPS beats by $0.05, beats on revenue

Omeros (NASDAQ:OMER): Q3 GAAP EPS of -$0.33 beats by $0.05.
Revenue of $29.9M (+548.6% Y/Y) beats by $2.71M.

Halozyme Q3 top line up 80%, guidance cut

Halozyme (NASDAQ:HALOQ3 results:
Revenues: $46.2M (+80%) increase mainly due to bulk rHuPH20 sales to Janssen of $20.1M.
Net loss: ($25.0M) (+10%); loss/share: ($0.17) (+11%).
2019 guidance: Revenues: $195M -205M from $205M – 215M.

ViewRay EPS beats by $0.06, beats on revenue

ViewRay (NASDAQ:VRAY): Q3 GAAP EPS of -$0.21 beats by $0.06.
Revenue of $20.86M (+18.1% Y/Y) beats by $0.2M.

Catalyst Pharmaceuticals EPS beats by $0.02, misses on revenue

Catalyst Pharmaceuticals (NASDAQ:CPRX): Q3 GAAP EPS of $0.13 beats by $0.02.
Revenue of $30.9M misses by $2.29M.
Shares -8.4%.

BeiGene Q3 product sales up 30%; cash consumption doubles

BeiGene (NASDAQ:BGNEQ3 results:
Product revenue: $50.1M (+30%). Collaboration revenue dried up due to end of Celgene collaboration on tislelizumab.
Net loss: ($307.4M) (-113%); loss/share: ($0.39) (-105%).
Cash consumption: ($265.0M) (-100%).
Shares down 1% after hours.