Firm backed by Italy’s Gruppo San Donato could bid for NMC Health

GKSD Investment Holding confirmed on Tuesday that it could make an offer to buy NMC Health (NMC.L), a day after the London-listed healthcare group revealed approaches from two private equity groups.
GKSD, an investment vehicle backed by sponsors of Italy’s private hospital chain Gruppo San Donato (GSD), said it was in the preliminary stages of considering an offer for NMC.
GKSD is being advised by GK Investment, which made the approach to NMC on its behalf, the firm said. Rothschild & Co and Goldman Sachs are also acting as advisers.

GSD, founded here in 1957, operates research hospitals, general hospitals and clinics in 44 locations across Italy and calls itself the country’s largest private hospital group.
The announcement sent shares in UAE-based NMC as much as 10% lower before they recouped some losses to trade down 1% at 914 pence as of 0839 GMT.
The company’s shares closed 32% higher on Monday after it said KKR (KKR.N) and GK had approached it, giving the stock a boost after falling sharply following queries by Muddy Waters last year over its financial statements.

U.S.-based KKR had declined to comment on NMC’s statement on Monday.
Lugano, Switzerland-based GK, focuses on investments primarily in Africa and the Middle East across multiple sectors. Historically, it has invested in oil service assets in Italy and the Middle East, its website www.gkinvest.com/en shows.
Reuters reported here last year that NMC was also the target of two groups, one backed by China’s Fosun, looking to buy a 40% stake in it.
https://www.reuters.com/article/us-nmc-health-offer/firm-backed-by-italys-gruppo-san-donato-could-make-offer-for-nmc-idUSKBN2050O2

Countries rush to build diagnostic capacity as coronavirus spreads

A week ago, only two laboratories in Africa could diagnose the novel coronavirus that originated in China and is rapidly spreading around the world. As of Sunday, the World Health Organization (WHO) expected every nation in Africa to be able to diagnose the disease.

The rush reflects a global push for diagnostic capabilities, particularly in developing countries, in hopes of averting a global pandemic. But it is being slowed by a desperate need for virus samples necessary to validate the tests.
“Without vital diagnostic capacity, countries are in the dark as to how far and wide the virus has spread and who has coronavirus or another disease with similar symptoms,” WHO chief Tedros Adhanom Ghebreyesus told a news conference in Geneva on Monday.
As of early Monday, there had been 40,235 confirmed cases reported in China and 909 deaths, as well as 319 cases in 24 other countries, including one death.
Most of the testing is being done by public health laboratories. But several companies including Thermo Fisher Scientific Inc, GenScript Biotech Corp and Co-Diagnostics Inc have developed tests and are taking steps to get them validated for clinical use.
Roche is distributing coronavirus tests developed by Tib Molbiol of Berlin for research use on some of its instruments while developing a test of its own. Abbott Laboratories also is working on a test.
WHO has activated a network of 15 referral laboratories that can support national efforts in confirming new cases, and has identified 168 labs globally with the technology to diagnose the virus.
Technicians must be trained to run the tests locally to avoid delays associated with having to send them to centralized labs.
On Tuesday, WHO is convening a two-day meeting of hundreds of researchers and manufacturers to address the outbreak.

WORKLOAD ON LABS IS ‘EXTREME’

Researchers are also working to develop antibody tests that can tell whether someone has been exposed to the virus. They could help answer how broadly this virus has spread, and whether there are milder cases not being detected, Dr. Mike Ryan, head of the WHO emergency program, told reporters.
China appears to have adequate stock of the materials needed to perform diagnostic tests, but there is a limited number of trained technicians who can run them. “The workload on those labs is extreme,” Ryan said.
Outside of China, manufacturers are quickly developing tests based on the genetic code of the virus. Those tests still need to be validated with actual virus samples, for which access has been challenging.
Live isolation of the virus allows a huge advance in diagnostics and potential advances in therapeutics and vaccine development, Ryan said.
GenScript, which has offices in New Jersey and Nanjing, China, has developed a test available to researchers. It cannot be used as a diagnostic until it has been tested in hundreds of virus samples.
“In China, we couldn’t get to the samples directly because we don’t have a lab that can handle the virus,” said Hong Li, a GenScript scientist.
The company has sent its test kits to Chinese health officials to assess their validity. “Because other companies in China are also doing that, we don’t know when it will be our turn,” said Eric Wang, GenScript’s head of marketing.
Utah-based Co-Diagnostics on Monday said it has started shipping its test, which is available for research purposes, to clients. Chief Scientific Officer Brent Satterfield said last week that the company has been struggling to find clinical virus samples to validate the test for use as a diagnostic.
Thermo Fisher developed its tests based on the genetic code of the virus, and ran computer models to validate it.

The company has been providing its test to countries and health ministries with access to virus samples, said Thermo Fisher executive Joshua Trotta. “They will evaluate our kits and make a determination of what is the best test to deploy.”
Meanwhile, Thermo Fisher is scaling up production as countries prepare for more cases. Demand is “growing every day,” Trotta said.
https://www.reuters.com/article/us-china-health-diagnostics-focus/countries-rush-to-build-diagnostic-capacity-as-coronavirus-spreads-idUSKBN2042DV

Congress Proposes ‘Misdirected, Destructive’ Surprise Billing Legislation

The House Ways and Means Committee is trying to pass the Consumer Protections Against Surprise Medical Bills Act, which it claims will “better shield patients from bankrupting surprise medical bills.” It states that its “approach recognizes the importance of the private market dynamics between insurance plans and providers.”
“But there are no private market dynamics between physicians and plans or between patients and plans,” states Jane M. Orient, M.D., executive director of the Association of American Physicians and Surgeons (AAPS). “Physicians are presented with a take-it-or-leave-it contract, and patients with a take-it-or-leave-it plan.”
The provisions in the Committee’s proposal that say they protect patient choice  only refer to their choice of “participating providers.”
“Doctors may reject the contract because of onerous administrative demands, restrictions that prevent providing the best care, or pay rates that don’t even cover costs,” Dr. Orient explained. “But with this bill, the federal government would force doctors to accept terms of contracts they have not signed.”
“People who have paid a huge premium for their insurance plan—maybe even more than their mortgage payment—are understandably outraged when they learn that it does not cover what they were led to expect,” Dr. Orient states. “They are not informed that their plan’s narrow network may mean an ‘in-network’ facility cannot provide needed services without out-of-network physicians, who bill independently.”
“Corporations, with government back-up, will effectively dictate what patients can receive,” she noted. “If people can only pay for a Yugo or a Trabant, decent cars will disappear.”
Physician compensation is only about 8 percent of total spending. “Cutting doctors’ pay would not in itself make much difference,” Dr. Orient pointed out. “But if insurers can drive them out of business or keep them from ordering expensive care, the insurance industry will become even more profitable.”
“There is no balance bill for treatment you did not get. But rationed care might not be your preference,” she concluded.
“What we really need are honest price signals (‘transparency’) and free choice of care and of a wide variety of clearly explained insurance products.”
The Association of American Physicians and Surgeons (AAPS) is a national organization representing physicians in all specialties since 1943.

Congress Proposes Misdirected, Destructive “Surprise Billing” Legislation

Singapore expects 25-30% drop in visitors this year due to virus

Singapore expects visitor numbers to drop 25-30% this year due to the new coronavirus outbreak, with a significant decline in Chinese travel to the city state expected to extend to other key markets, its tourism board said on Tuesday.
The city-state has reported 45 cases of the virus, which has claimed over 1000 lives in China, while some countries such as Kuwait and Qatar have already started advising their citizens against travel to the Southeast Asian business hub.
Visitor arrivals rose 3.3% to 19.1 million visitors in 2019, with receipts up 0.5% to S$27.1 billion ($19.52 billion).
https://www.reuters.com/article/us-singapore-economy-tourism/singapore-expects-25-30-drop-in-visitors-this-year-due-to-virus-idUSKBN205075

Coronavirus could trim 1 percentage point from China GDP growth

The coronavirus outbreak could trim China’s full-year economic growth rate by as much as 1 percentage point in 2020, a senior member of a Chinese government think tank said in comments published on Tuesday.

Zeng Gang, vice chair of the National Institute for Finance and Development, compared the current crisis with the SARS epidemic of 2003, when China’s growth declined by about 2 percentage points in a single quarter.
“The impact of this epidemic on the economy in the first quarter is expected to be comparable,” Zeng said in a commentary published in the 21st Century Business Herald newspaper.
“At present, according to different scenario assumptions, researchers expect the negative impact of the epidemic on full-year GDP growth to be in the range of 0.2% to 1%.”
If the official response to the epidemic is timely and effective at limiting its spread, long-term growth trends would not be significantly affected, Zeng said.

“But in the short term, the epidemic’s impact on economic activity cannot be ignored, especially with tertiary industries and small enterprises with tight cash flows facing greater pressures,” Zeng said.
Zeng said difficulties for small companies could prompt a rise in bankruptcies and put upward pressure on the unemployment rate in the first quarter.
“The employment situation is not optimistic. This will also pose a serious challenge to the macro policy goal of ‘employment first’,” he said.
Chinese President Xi Jinping said on Monday that the government would prevent large-scale layoffs, Chinese state television reported.
China’s central bank has taken steps to support the economy, including reducing interest rates and flushing the market with liquidity. It has also said it will provide special funds for banks to lend to businesses.

Analysts at Citi said they expect growth to slow significantly despite expectations of more proactive fiscal policy and more accommodative monetary policy.
“Assuming the virus is contained by the end of March, we revise down our 20Q1 GDP growth forecast considerably to 3.6% and the annual growth modestly to 5.3%”, Citi analysts said in a note. Citi previously forecast first-quarter growth of 4.8% and full-year growth of 5.5%.
https://www.reuters.com/article/us-china-economy-health/coronavirus-could-trim-1-percentage-point-from-china-gdp-growth-government-researcher-idUSKBN20506X

China to speed up provision of medicines seen to be effective against coronavirus

China will speed up the provision of medicines that show clinical effects against the coronavirus, state media reported on Monday, citing a meeting chaired by Chinese Premier Li Keqiang.
https://www.reuters.com/article/us-china-health-medicines/china-to-speed-up-the-provision-of-medicines-seen-to-be-effective-against-coronavirus-state-media-idUSKBN204157

NMC Health reveals KKR, GK approaches as founder Shetty steps back

NMC Health Plc (NMC.L) disclosed preliminary buyout approaches from private equity firms KKR & Co Inc (KKR.N) and GK Investment on Monday, lifting its shares, which have dropped dramatically since Muddy Waters last year queried its financial statements.
The largest private healthcare company in the United Arab Emirates said separately that its co-chair and founder BR Shetty had stepped back from its board after he informed NMC of potentially inaccurate reporting of his holdings.
Commenting on the healthcare company’s disclosure that its co-chairman’s stake was under legal review, Britain’s markets watchdog said it is “making enquiries” from NMC.
“We are aware of the situation and are making enquiries with the relevant parties”, a Financial Conduct Authority (FCA) spokesman said in a statement.
Shetty was not immediately available for comment on the NMC statement, which said the company was investigating.
NMC, which joined the London Stock Exchange in 2012 and was promoted to the blue chip FTSE 100 index in 2017, operates clinics and hospitals, specialized maternity and fertility clinics, and long-term care homes hospitals across 19 countries.
But it has lost more than two-thirds of its value since U.S.-based short-seller Muddy Waters questioned its financial statements in December, prompting major shareholders to sell out.
“Today’s bizarre disclosures about even more pledges and debt validate that the cockroach theory is alive and well – what we found is likely just the tip of the iceberg,” Muddy Waters’ Carson Block said in a statement.
“As for the notion that NMC might receive private equity bids, it’s hard for us to believe they would survive due diligence,” he added.
NMC declined to comment on the short-seller’s statement.
However, earlier NMC said: “The Company’s operations continue to perform strongly, and the Company expects to report full-year 2019 results in-line with management’s expectations.”

Former FBI boss Louis Freeh is leading a separate independent review committee appointed by London-listed NMC to investigate the Muddy Waters allegations.
NMC said it has not had talks on the terms of any potential offer. KKR declined to comment, while GK could not be reached.
“Just when you thought it couldn’t get any stranger with NMC Health, there are two new twists in the tale of the troubled hospital operator…Taking the business private might be the best thing to happen to NMC as it has lost credibility with the market and it will take a lot to rebuild trust with investors,” Russ Mould, investment director at AJ Bell, said.
NMC shares were up 6.7% at 747.2 pence at 1327 GMT.

SHETTY HOLDINGS

NMC said the ongoing review into inaccurate disclosures in the past would also affect the interests of two other major NMC shareholders, vice-chair Khaleefa Al Muhairi and Saeed Al Qebaisi.
Based on the initial probe, the Indian billionaire’s stake in NMC will likely come down by 9.58%, NMC said. A spokesman for NMC declined further comment.
Shetty owned 19.22% stake as of May last year, while NMC vice-chair Muhairi and Qebaisi had 15.82% and 7.66%, respectively, as of Jan. 28, Refinitiv data showed.
Muhairi and Qebaisi also sold some shares in NMC and Finablr (FINF.L) last month. The payments firm is also co-chaired by Shetty.
Finablr on Monday said that independent directors were reviewing arrangements between Shetty and the two shareholders and it could impact its shareholding structure.

Shetty had pledged over half of Finablr’s stock as security against debts it incurred in buying Travelex, the company disclosed last month. He owned nearly 63% of Finablr as of August.
https://www.reuters.com/article/us-nmc-health-offer/nmc-health-reveals-kkr-gk-approaches-as-founder-shetty-steps-back-idUSKBN2040PT