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June 2, 2014 Issue:
Recent Health Care M&A Deals
Biotechnology
Acquirer
Target
Price
OncoCyte Corporation
License to blood samples
N/A
Janssen Biotech, Inc.
Aduro BioTech, Inc.
$365 million
E-Health
Ebix, Inc.
Healthcare Magic
$6 million
Medical Record Associates, LLC
Cancer registry division
N/A
Laboratories, MRI and Dialysis
Novacyt
Lab21
Merger
Technology Deal of the Week
St. Jude Medical (NYSE: STJ) finally pulled the trigger to exercise its option to buy the 81% of CardioMEMS it doesn’t already own. Back in September 2010, STJ paid $60 million for 19% of CardioMEMS, which was developing the CardioMEMS HF System (the HF stands for heart failure). Four years later, the FDA approved the system, and St. Jude Medical will pony up the remaining $375 million it agreed to pay back then. BofA Merrill Lynch will act as financial advisor and Gibson, Dunn & Crutcher LLP as legal counsel to St. Jude Medical. Morgan Securities LLC will act as financial advisor to CardioMEMS and Cooley LLP as legal counsel……….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
Deal volume in May was on par with April’s 74 deals. Our preliminary data for the month shows a total of 69 deals announced, and we’re confident the true total will match or surpass that of April. The Services sector was buoyed by the return of Long-Term Care deals, which slowed considerably in April after setting a torrid pace in the first quarter. For all the hoopla over the unconsummated deals in the Pharmaceutical sector, the Technology side slid to just 32 deals in May, with Biotechnology showing the steepest decline. But as we said, this is an early look at May’s deals. Stay tuned for more data, next week.
Deal Volume by Sector, May vs. April 2014
May 2014
April 2014
Sector
Deals
Deals
Change
Services
Behavioral Health Care
1
0
100.0%
Home Health & Hospice
1
5
-80%
Hospitals
1
3
-67%
Labs, MRI & Dialysis
1
3
-67%
Long-Term Care
19
9
111%
Managed Care
3
3
0%
Physician Medical Groups
4
9
33%
Rehabilitation
1
1
0%
Other
6
6
0%
Services subtotal
37
33
12%
Technology
Biotechnology
6
12
-50%
eHealth
6
7
-14%
Medical Devices
6
7
-14%
Pharmaceuticals
14
15
-7%
Technology subtotal
32
41
-22%
Grand total
69
74
-7%
Source: The Health Care M&A News, May 2014
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Services Deal of the Week
2014 is proving to be a break-out year in several healthcare sectors, and Physician Medical Group is yet another example. Last week, AMSURG Corp. (NASDAQ: AMSG) and Sheridan Healthcare, a portfolio company of Hellman & Friedman, LLC, announced the latter’s purchase for $2.35 billion. Sheridan is a national provider of multi-specialty outsourced physician services to hospitals and ambulatory surgery centers, among others. It also providers anesthesiology and pediatric services, with strong operations in radiology and emergency medicine, as well. The combined company will have a total addressable market of about $70 billion and will encompass more than 4,600 physician relationships across 38 states. Citi is serving as financial advisor to AMSURG and Bass, Berry & Sims PLC is providing legal counsel. Barclays, Credit Suisse and Goldman, Sachs & Co. are serving as financial advisors to Sheridan and Simpson Thacher & Bartlett LLP is providing legal counsel………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
Gene therapies are drawing PE investors like flies to honey. Last week, several funds plowed $72.8 million into Philadelphia-based Spark Therapeutics, a late-stage company that’s developing gene-based therapies for “a wide range of rare, debilitating diseases.” The Series B financing was led by Sofinnova Ventures, which was joined by new investors Brookside Capital, Deerfield Management Company, Rock Springs Capital, funds and accounts managed by T. Rowe Price Associates, Inc., Wellington Management Company LLP, and two undisclosed dedicated healthcare funds. The Children’s Hospital of Philadelphia, a co-founder of Spark, also participated significantly in the round. The funds will be used to advance the company’s deep pipeline of gene therapy programs, including development of its lead Phase 3 program to address RPE65-related retinal dystrophies, a form of inherited blindness……..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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