Replies to post #118062 on Biotech Values

[DewDiligence]

This biotech-M&A report by Burrill has an obvious logical flaw:

http://finance.yahoo.com/news/MA-Has-Failed-to-Build-Value-iw-363646390.html?x=0

[DewDiligence]

BAX acquires Prism Pharma for $170M plus $168M earnout:

http://finance.yahoo.com/news/Baxter-Announces-the-bw-3535748513.html?x=0&.v=1

Prism Pharmaceuticals has developed and received U.S. Food and Drug Administration (FDA) approval for multiple presentations of NEXTERONE® (amiodarone HCl), an antiarrhythmic agent. The NEXTERONE product portfolio, which does not contain polysorbate 80 or benzyl alcohol, includes the first and only ready-to-use premixed intravenous (IV) bag formulations as well as vials and a pre-filled syringe.

[DewDiligence]

JNJ Acquires Synthes for $21.5B in Cash+Stock

[The total consideration, 35% cash and 65% stock, is a 22% premium to Synthes’ “unaffected” share price on 4/14/11. This is JNJ’s largest-ever acquisition by a wide margin.

JNJ’s own PR is at http://finance.yahoo.com/news/Johnson-amp-Johnson-and-prnews-539016889.html?x=0&.v=1 . CC today at 8:30am ET.]

http://online.wsj.com/article/SB10001424052748704729304576287622474502438.html

›APRIL 28, 2011
By ANUPREETA DAS, GINA CHON and JONATHAN D. ROCKOFF

Johnson & Johnson will acquire medical-device maker Synthes Inc. for $21.3 billion, giving the U.S. health-products giant a commanding lead in the global market for surgical devices used to treat fractures and traumatic injuries.

The two companies said & Johnson will purchase Synthes for 159 Swiss francs a share, which represents a premium of about 22% to where Synthes stock traded the day before The Wall Street Journal originally reported the talks on April 15.

Under the terms of the deal, each share of Synthes common stock will be exchanged for 55.65 Swiss francs ($63.5) in cash and 103.35 francs in Johnson & Johnson common stock.

The boards of the two companies have backed the merger, which will create, together with the DePuy units of Johnson & Johnson, the largest business within its Medical Devices and Diagnostics segment.

"DePuy and Synthes together will create the most innovative and comprehensive orthopaedics business in the world and enable us to better serve clinicians and patients worldwide," said Bill Weldon, Chairman and Chief Executive of Johnson & Johnson.

Synthes shares closed down 1.4% at 146.50 francs in trading Tuesday on the Swiss exchange.

It's unclear whether Synthes's public shareholders, many of whom now are aggressive hedge-fund traders who move in once a company is in play, will be satisfied with the price J&J is offering for market growth. Many have argued privately in recent days that Synthes is worth at least 165 francs a share.

If completed, the Synthes purchase would be J&J's largest acquisition to date. In 2006, it bought Pfizer Inc.'s consumer health-care business for $16.6 billion. Since then, the company, which has nearly $28 billion in cash and securities, has typically eschewed large deals in favor of a "string of pearls" approach, shelling out as much as a few billion dollars for companies. At the same time, J&J aims for dominant positions in its main markets of consumer products, pharmaceuticals and medical devices and diagnostics.

Synthes, based both in Switzerland and in West Chester, Pa., confirmed last week it was in talks with J&J but declined to give further details. Its search for a buyer was propelled in recent months by 76-year-old Synthes Chairman Hansjörg Wyss, according to people familiar with the matter. Mr. Wyss, a Swiss citizen who lives in the U.S., is ranked No. 154 in the Forbes billionaires list. He and his family own about 48% of Synthes.

Synthes holds a significant portion of one of the medical-device industry's biggest markets—the repair of broken and diseased bones. Often, the plates, screws and other orthopedic implants that Synthes makes are used in emergency and mandatory surgeries rather than elective ones.

As populations age and incomes rise in emerging economies, demand for these devices is expected to grow substantially, analysts say. Last year, Synthes's net sales rose 8.6% to nearly $4 billion. North American sales rose 4.6% to $2.1 billion, while Asia-Pacific sales increased 19% to $424 million.

A combination with Synthes would give J&J a nearly 28% share in the orthopedic-devices market, double that of second place Stryker Corp. [ZMH and Biomet are other large players], according to Wells Fargo Securities. J&J executives consider this $30 billion market among the industry's most attractive, and told investors last year that it is growing 6.4% annually, more than a percentage point faster than medical-equipment sales overall.

J&J, which makes everything from Listerine mouthwash to prescription drugs for cancer and heart ailments, had been looking to expand its narrow lead in the devices market. Last year, it studied the possibility of buying U.K. medical-device maker Smith & Nephew PLC, but those explorations didn't go very far, people familiar with the matter said.

Analysts had been expecting J&J to use its cash pile, most of which is overseas, to fund the Synthes acquisition. But under the proposed deal structure, J&J would use more stock than cash, which could dilute its earnings in the short term, given that J&J shares trade at a lower price-to-earnings multiple than Synthes shares.

The people described the negotiations between Synthes and J&J, which lasted a few months, as cordial, with the independent directors of the medical-device company playing an active role.

Goldman Sachs Group Inc. and law firm Cravath, Swaine & Moore LLP are advising J&J. Credit Suisse Group AG and law firm Shearman & Sterling LLP are advising Synthes, these people said.‹

[DewDiligence]

Recent Biotech Buyouts of Publicly Traded Companies

[Added TEVA-CEPH and JNJ-Synthes.]

 
 Acquired         ‡Premium   *Deal        iHub  
 Company  Buyer   to Market  Value  Date  Reference  
 GNLB     GSK       465%     $57M  10/08  #msg-33209281 
 MEMY     Roche     319%     $50M  11/08  #msg-33787598 
 SYNB     PFE       240%     $10M  12/10  #msg-58221573 
 KOSN     BMY       233%     $190M  5/08  #msg-29647147 
 MGRM     LH        171%     $155M  6/09  #msg-38960958 
 COLY     PFE       167%     $165M 11/07  #msg-24600805 
 CYPB     Ramius    160%     $255M 12/10  #msg-57780859 
 NTMD     Deerfld  z158%    z$36M   1/09  #msg-35132470 
 EYE      ABT       149%     $2.8B  1/09  #msg-34762429 
 IOMI     Intercell 147%     $190M  5/08  #msg-29232165 
 CPEX     FCB Hldgs 142%     $77M   3/11  #msg-61326856 
 BTRX     Stiefel   136%     $150M  6/08  #msg-30201906 
 Tepnel   GPRO      126%     $132M  1/09  #msg-35221710 
 SGXP     LLY       119%     $64M   7/08  #msg-30547648 
 ENCY     PFE       118%     $350M  2/08  #msg-26978155 
 TRCA     Ipsen     104%     $660M  6/08  #msg-29795183 
 CRY.to   MDT        97%     $380M  9/08  #msg-32421462 
 Speedel  NVS        94%     $880M  7/08  #msg-30588524 
 MNT      JNJ        92%     $1.1B 11/08  #msg-33879830 
 MEDX     BMY        90%     $2.1B  7/09  #msg-39801273 
 SIRT     GSK        85%     $620M  4/08  #msg-28705020 
 ZGEN     BMY        84%     $885M  9/10  #msg-54152162 
 CVTX     GILD       76%     $1.4B  3/09  #msg-36225695 
 MOVET.BR Shire      74%     $560M  8/10  #msg-52918245 
 IDEV     ENDP       74%     $370M  1/09  #msg-34592416 
 LEVP     VPHM      y73%    y$510M  7/08  #msg-30704409 
 TARG     MDCO       72%     $42M   1/09  #msg-34774402 
 Ventana  Roche      72%     $3.4B  1/08  #msg-30912677 
 Jerini   Shire      71%     $520M  7/08  #msg-30452872 
 APNO     Cell Bio   70%     $20M   9/09  #msg-43348606 
 AAH.AX   CEPH       69%     $207M  2/09  #msg-35956544 
 OSTE     MDT        65%     $123M  8/10  #msg-53410183 
 TLCR     Grifols    64%     $3.4B  6/10  #msg-50961841 
 FACT     ABT        64%     $450M  3/10  #msg-47606240 
 Acambis  SNY        64%     $550M  7/08  #msg-30990498 
 JAV      HSP        64%     $141M  4/10  #msg-48881292 
 Synthes  JNJ        61%     $21.5B 4/11  #msg-62473819 
 SCRX     Shionogi   61%     $1.4B  9/08  #msg-31859174 
 BFRM     Merz       60%     $253M  1/10  #msg-45071380 
 CXS.AX   CEPH       59%     $163M  3/11  #msg-61453144 
 CRXL     JNJ        58%     $2.4B 12/10  #msg-57504349 
 MTXX     HIG Captl  56%     $75M  12/10  #msg-57778844 
 ASPM     COV        56%     $210M  9/09  #msg-43348479 
 OSIP     Astellas   55%     $4.0B  5/10  #msg-50234451 
 IDMI     Takeda     55%     $75M   5/09  #msg-37898204 
 BSMD     MMSI       54%     $96M   5/10  #msg-50161877 
 ATSI     MDT        54%     $370M  4/10  #msg-49617936 
 ALO      KG         54%     $1.6B 11/08  #msg-33763449 
 MEDI     AZN        53%     $15.2B 4/07  #msg-19020387 
 MLNM     Takeda     53%     $8.8B  4/08  #msg-28365383 
 TRBN     EBS        52%     $97M   8/10  #msg-53271836 
 PCOP     LGND       52%     $75M   9/08  #msg-32404474 
 CLZR     ELOS       51%     $65M   9/09  #msg-41293512 
 OMRI     JNJ        51%     $465M 11/08  #msg-33762745 
 IMCL     LLY        51%     $6.5B 10/08  #msg-32662830 
 MYOG     GILD       50%     $2.5B 10/06  #msg-13712121 
 MIL      Merck KGaA 50%     $7.2B  3/10  #msg-47249493 
 CRGN     CLDX       50%     $40M   5/09  #msg-38262967 
 BEC      Danaher    46%     $6.8B  2/11  #msg-59624646 
 PHRM     CELG       46%     $2.9B 11/07  #msg-24645394 
 BRL      TEVA       42%     $9.0B  7/08  #msg-30792830 
 AGAM     STJ        41%     $1.3B 10/10  #msg-55673504 
 KG       PFE        40%     $3.6B 10/10  #msg-55425514 
 CEPH     TEVA       39%     $6.8B  5/11  #msg-62636692 
 ORCH     LH         39%     $85M   4/11  #msg-61801828 
 MOGN     Eisai      39%     $3.9B 12/07  #msg-25163775 
 GENZ     SNY       v37%    v$20.1B 2/11  #msg-59975091 
 MATK     Royal DSM  35%     $1.1B 12/10  #msg-57987049 
 AMMD     ENDP       34%     $2.9B  4/11  #msg-61948007 
 CLRT     GE         34%     $580M 10/10  #msg-55864640 
 SGP      MRK        34%     $41B   3/09  #msg-36140327 
 HTRN     ENDP       34%     $223M  5/10  #msg-49838813 
 SMTS     COV        32%     $250M  6/10  #msg-51344183 
 TOMO     ARAY       31%     $277M  3/11  #msg-60697854 
 CGPI     Galderma   30%     $420M  2/08  #msg-28286522 
 WYE      PFE        29%     $68B   1/09  #msg-35077617 
 APPX     Fresenius  29%     $940M  7/08  #msg-30498388 
 CRA      DGX        28%     $330M  3/11  #msg-61103240 
 SEPR     Dainippon  28%     $2.6B  9/09  #msg-41143301 
 GXDX     NVS        27%     $330M  1/11  #msg-59092015 
 ISPH     MRK        26%     $430M  4/11  #msg-61724403 
 Zentiva  SNY        26%     $2.6B  9/08  #msg-32327005 
 NOVN     Hisamitsu  22%     $428M  7/09  #msg-39515681 
 DNEX     TMO        21%     $2.1B 12/10  #msg-57686719 
 CLDA     FRX        19%     $1.2B  2/11  #msg-60171753 
 PPCO     ENDP       19%     $168M  8/10  #msg-53137069 
 EVVV     COV        19%     $2.6B  6/10  #msg-50797343 
 ABII     CELG       17%     $2.9B  6/10  #msg-51844360 
 ACL      NVS       x17%    x$49.7B 1/10  #msg-45072999 
 CGRB     JNJ        16%     $970M  5/09  #msg-38039851 
 DNA      Roche      16%    w$46.8B 3/09  #msg-36224175 
 ARI.to   Roche      15%     $190M  7/08  #msg-30904056 
 SENO     BCR        14%     $213M  5/10  #msg-49838776 
 EURX     Axcan       9%     $583M 12/10  #msg-57543845 
 CEGE     BPAX        6%     $38M   6/09  #msg-39163410 
 MEND     JNJ         6%     $480M  7/10  #msg-52176337 
 VXGN     OXGN       (4%)    $33M  10/09  #msg-42578130 
 AVGN     MNOV       (7%)    $38M   8/09  #msg-40769841 
 VRX      BVF        (7%)    $3.9B  6/10  #msg-51505172 
 PGLA     Avexa       ®        ®   12/08  #msg-34341452 
 NUVO     ARCA        ®        ®    9/08  #msg-32420015 
 NOVC     TSPT        ®        ®    9/08  #msg-31869987 
 VSGN     IPC         ®        ®    8/09  #msg-40603745 
  
 * Includes assumption of debt where relevant. 
  
 ‡ Relative to “unaffected” share price in cases where 
 a buyout offer or auction was made public; excludes 
 contingent values unless otherwise specified. 
  
 ® Reverse merger with private or non-US company.  
  
 v Excluding CVR of $4-14/sh; premium relative to 7/22/10 close. 
  
 w For 44% of DNA not already owned. 
  
 x Price includes entire deal in three stages; 17% premium is the 
 blended avg price of NVS’ purchases ($164) relative to ACL’s market 
 price 4/4/08 immediately prior to announcement of first stage of deal. 
  
 y Includes $0.45/sh of contingent payments. 
  
 z Liquidated by Deerfield following failed merger with Archemix.

[IB2011]

Dew, could you please provide us with the source for this list? Thanks very much.