Healthcare Sector Comment – May 2015

Date

The global market for unlicensed pharmaceuticals is worth close to €4.5bn and is expected to see continued growth, as the need for a safe way for patients to access unlicensed medicines fuels demand in the under-penetrated market.

The growing demand is also being driven from other directions: from those in emerging markets with limited access to modern medicine to those outside of the US facing the consequences of the ever-present lag between the launch of a drug in the US and its delayed launch elsewhere. Figures from the IMS Institute for Health Informatics illustrate that of the 154 new drugs launched globally between 2008 and 2012, almost half still remained unavailable in the UK by 2013 with 66% unavailable in Japan and almost 80% in China. It is therefore no surprise that the market for unlicensed pharmaceuticals has seen an influx of M&A in recent years.

A recent example saw British company Clinigen – a market leader in the billion dollar industry – complete the €312m acquisition of its biggest rival company, Idis Group, from private equity firm CBPE. With locations in over 120 countries, the group will be able to shape and define the critically important market with many potential opportunities for future growth.

At Clearwater International, we have worked on several transactions in the Pharmaceutical sector including the sale of a respiratory generics business to DCC plc and the sale of a portfolio of generic licences to an India pharmaceutical company.

 

Health & Social Care Deals

NASDAQ-listed Arcadia Healthcare Company, the US operator of in-patient psychiatric facilities, residential treatment centres and substance abuse facilities, acquired three facilities in the UK:

  • Mildmay Oaks, (formerly known as Vista Independent Hospital) which owns and operates rehabilitation facilities for people with intellectual disability and autism spectrum disorder;
  • Pastoral Care Group, which operates hospitals and a range of supported/independent community living facilities that provide specialist mental health services; and
  • Two in-patient psychiatric facilities of Choice Lifestyles with 48 beds.

NMC Health, the United Arab Emirates-based healthcare provider, acquired 90% of Americare Group, a provider of in-home healthcare services in Abu Dhabi, and Dr Sunny Healthcare Group, a network of six medical centres in Sharjah, for a combined value of c. €89m.

Ventas Inc acquired UK nursing care home company Canford Healthcare for a consideration of €75m.

Trinity Care plc, an Ireland-based nursing home group, acquired Cairnhill Nursing Homes, a 41 bed nursing home based in Ireland, for an undisclosed consideration.

India-based multi-speciality hospitals operator CARE Hospitals acquired Alexandria Hospital, a 250 bed hospital based in India, for an undisclosed amount.

Sevacare UK Ltd – a provider of healthcare and support services to older people, people with learning & physical disabilities and people with mental health needs – acquired Basing Care Ltd, the UK-based home care provider, for an undisclosed amount.

Following its acquisition by Tenet Healthcare last month, Aspen Healthcare Ltd acquired a 50% stake in Nova Healthcare – a UK-based hospital operator – for an undisclosed amount. Aspen owns and operates eight hospitals and healthcare centres in the UK.

Concord Medical Services Holdings Ltd acquired Fortis Surgical Hospital, a Singapore-based hospital operator, from Fortis Healthcare International Pte Ltd for a consideration of €37m. Concord Medical Services operates a network of radiotherapy and diagnostic imaging centres in China.

US private equity firm Summit Partners acquired a majority stake in DP Group srl (DentalPro), an Italy-based dental care clinic network, for an undisclosed amount.

 

Pharma & Biotech Deals

AIM-listed Clinigen Group plc acquired Idis Group Holdings Ltd, a UK-based unlicensed medicines company, for an enterprise value of €312m. Clinigen provides speciality pharmaceutical products and services.

IBA Molecular Spain SA, a supplier and distributer of pharmaceutical products, acquired Molypharma SA, a Spain-based radiopharmaceutical products manufacturer, for an undisclosed amount.

Concordia Healthcare Corporation acquired Covis Pharma sarl and Covis Injectables sarl, both Luxembourg-based pharmaceutical preparation manufacturers, for a consideration of €1.1bn. Concordia operates as a healthcare company that focuses on legacy pharmaceutical products and orphan drugs for the diabetic market.

PAREXEL International Corporation acquired Quantum Solutions Pvt Ltd, an India-based pharmaceutical contract research organisation, for an undisclosed amount. PAREXEL is a NASDAQ-listed biopharmaceutical contract research organisation.

Quantum Pharma plc, the UK-based manufacturer of niche medicines and services to the healthcare sector, acquired Lamda Laboratories SA and Lamda Pharmaceuticals SA, both Greece-based providers of contract development services, as well as Lamda (UK) Ltd, a UK-based provider of contract development services, for a total consideration of €10m.

Mallinckrodt plc acquired Ikaria Inc, a US-based company that manufactures a treatment option for the highly vulnerable patient population, for a consideration of €2.1bn. Based in Ireland, Mallinckrodt produces speciality pharmaceutical products including generic drugs and imaging agents.

US-based pharmaceutical company Bristol-Myers Squibb Company acquired Flexus Biosciences Inc, a US-based biotechnology company focused on the discovery and development of novel anti-cancer therapeutics, for a consideration of €1.1bn.

Valeant Pharmaceuticals International, the Canada-based pharmaceuticals company, acquired Salix Phamaceuticals Ltd, a US-based gastrointestinal disorders treatment manufacturer, for a consideration of €12.8bn.

 

Medical Equipment & Supplies Deals

A team of undisclosed Swedish investors acquired Kibion AB from Orexo AB for an undisclosed amount. Sweden-based Kibion manufactures products for the diagnosis of the gastric ulcer bacterium Helicobacter pylori using breath test technology.

Senzime AB, a Sweden-based biotechnological company, acquired MD Biomedical AB, a Sweden-based micro dialysis catheters manufacturer, for a consideration of €0.2m.

InfuSystem Holding Inc, the US-based provider of infusion pumps and related products and services, acquired Ciscura Holding Company Inc, a US-based distributer of ambulatory infusion pumps.

Japanese listed chemicals company Tosoh Corporation acquired Lilac Medicare Pvt Ltd, an India-based manufacturer of clinical diagnostic equipment and reagents, for an undisclosed amount.

Laborie Medical Technologies Inc acquired Medical Measurement Systems BV, the Netherlands-based manufacturer of equipment for urodynamic, gastrointestinal pH, impedance and motility testing, for an undisclosed amount. Laborie Medical Technologies is a manufacturer of medical devices and disposables in urology, gynaecology and colorectal fields.

Drive Medical Ltd, the UK-based subsidiary of Medical Depot Inc, acquired Park House Healthcare Ltd, a UK supplier of specialist pressure area care equipment, hospital beds and moving & handling equipment, for an undisclosed amount. Drive Medical manufactures and distributes durable medical equipment in home healthcare, medical/surgical and rehabilitation markets.

PYREXAR Medical Inc, the US-based manufacturer of hyperthermia treatment systems, acquired the hyperthermia assets of Perseon Corporation for an undisclosed amount. The acquisition included substantially all hyperthermia assets, products, services and related intellectual property.

Norgine BV acquired a 70% stake in Arc Medical Design Ltd, a UK-based developer of healthcare devices for the detection of adenomas and colon cancer. Norgine develops pharmaceutical products.