A look at a few recent merger and acquisition deals in the pharma world
There’s already been some awfully significant activity in this year in terms of merger and acquisition (M&A) deals, and we haven’t even gotten past March yet. Just last issue, we discussed the Bristol-Myers Squibb (BMS) agreement to pay $74 billion for Celgene, and an $8-billion deal for Eli Lilly and Co. to acquire Loxo Oncology.
And now there are three more deals with big names involved: GE Life Sciences, Roche Group and Merck & Co. Let’s start with GE, because even though it’s “only” a bit under a third the size of the BMS-Celegene deal, that’s still a lot of money.
Feb. 25 saw news that Danaher Corp. had entered into a definitive agreement with General Electric Company (GE) to acquire the Biopharma division of GE Life Sciences for a cash purchase price of approximately $21.4 billion.
GE Biopharma is a leading provider of instruments, consumables and software that support the research, discovery, process development and manufacturing workflows of biopharmaceutical drugs. The business is comprised of process chromatography hardware and consumables, cell culture media, single-use technologies, development instrumentation/consumables and service. GE Biopharma is expected to generate annual revenue of approximately $3.2 billion in 2019, with approximately 75 percent of these revenues considered recurring.
The business will be established as a stand-alone operating company within Danaher’s $6.5-billion Life Sciences segment, joining the company’s Pall, Beckman Coulter Life Sciences, SCIEX, Leica Microsystems, Molecular Devices, Phenomenex and IDT businesses.
“GE Biopharma is renowned for providing best-in-class bioprocessing technologies and solutions. This acquisition will bring a talented and passionate team as well as a highly innovative, industry-leading product suite to our Life Sciences portfolio, providing an excellent complement to our current biologics workflow solutions,” said Danaher’s president and CEO, Thomas P. Joyce Jr. “We expect GE Biopharma to advance our growth and innovation strategy in an important and highly attractive life science market. We see meaningful opportunities to harness the power of the Danaher Business System to further provide GE Biopharma’s customers with end-to-end bioprocessing solutions that help enable breakthrough development and production capabilities.”
The transaction is expected to be completed in the fourth quarter of calendar year 2019.
Spark Therapeutics set to join Roche
PHILADELPHIA—The same day of the Danaher-GE M&A news brought word that Spark Therapeutics, a fully integrated, commercial gene therapy company dedicated to “challenging the inevitability of genetic disease,” had entered into a definitive merger agreement for Roche to fully acquire it at a price of $114.50 per share in an all-cash transaction. This corresponds to a total equity value of approximately $4.8 billion on a fully diluted basis, inclusive of approximately $500 million of projected net cash expected at close. The merger agreement has been unanimously approved by the boards of both Spark and Roche.
Under the terms of the merger agreement, Roche will promptly commence a tender offer to acquire all outstanding shares of Spark’s common stock, and Spark will file a recommendation statement containing the unanimous recommendation of the Spark board that Spark shareholders tender their shares to Roche.
“As the only biotechnology company that has successfully commercialized a gene therapy for a genetic disease in the U.S., we have built unmatched competencies in the discovery, development and delivery of genetic medicines. But the needs of patients and families living with genetic diseases are immediate and vast,” remarked Jeffrey D. Marrazzo, CEO of Spark Therapeutics. “With its worldwide reach and extensive resources, Roche will help us accelerate the development of more gene therapies for more patients for more diseases and further expedite our vision of a world where no life is limited by genetic disease.”
“Spark Therapeutics’ proven expertise in the entire gene therapy value chain may offer important new opportunities for the treatment of serious diseases,” added Severin Schwan, CEO of Roche. “In particular, Spark’s hemophilia A program could become a new therapeutic option for people living with this disease. We are also excited to continue the investments in Spark’s broad product portfolio and commitment to Philadelphia as a center of excellence.”
Spark Therapeutics will continue its operations in Philadelphia as an independent company within the Roche Group.
Merck to acquire Immune Design
KENILWORTH, N.J., SEATTLE & SOUTH SAN FRANCISCO, Calif.—Merck & Co., known as MSD outside the United States and Canada, and Immune Design announced just a few days before those other two deals that they had entered into a definitive M&A agreement under which Merck, through a subsidiary, will acquire Immune Design for $5.85 per share in cash for an approximate value of $300 million.
“Scientists at Immune Design have established a unique portfolio of approaches to cancer immunization and adjuvant systems designed to enhance the ability of a vaccine to protect against infection, which could meaningfully improve vaccine development,” said Dr. Roger M. Perlmutter, president of Merck Research Laboratories. “This acquisition builds upon Merck’s industry-leading programs that harness the power of the immune system to prevent and treat disease.”
Immune Design is a late-stage immunotherapy company employing next-generation in-vivo approaches to enable the body’s immune system to fight disease. The company’s proprietary technologies, GLAAS and ZVex, are engineered to activate the immune system’s natural ability to generate and/or expand antigen-specific cytotoxic immune cells to fight cancer and other chronic diseases.
“Merck has a rich history of discovery and innovation and a strong track record of developing meaningful therapeutics and vaccines,” said Dr. Carlos Paya, president and CEO of Immune Design. “We believe this agreement creates shareholder value by positioning our technologies and capabilities for long-term success with a leading, research-driven biopharmaceutical company.”
The transaction is expected to close early in the second quarter of 2019.