UP­DAT­ED: An­oth­er big CRO deal has land­ed as Ther­mo Fish­er ac­quires PPD for $17.4B

Con­sol­i­da­tion among big CRO play­ers is con­tin­u­ing to churn.

Fol­low­ing a Wednes­day af­ter­noon re­port from the Wall Street Jour­nal say­ing a deal was close, Ther­mo Fish­er has an­nounced plans to ac­quire PPD for $17.4 bil­lion. WSJ had re­port­ed that the par­ties could wrap up an agree­ment as soon as this week. It’s the sec­ond CRO M&A deal in as many months, fol­low­ing the Icon-PRA Health Sci­ences deal in late Feb­ru­ary.

Thurs­day morn­ing, Ther­mo Fish­er an­nounced the trans­ac­tion would ac­count for $17.4 bil­lion in cash plus an as­sump­tion of about $3.5 bil­lion in net debt. That to­tal rep­re­sents a per share price of $47.50, good for a 24% pre­mi­um on PPD’s clos­ing price from Tues­day af­ter­noon.

In a state­ment, Ther­mo Fish­er CEO Marc Casper said:

Phar­ma and Biotech is our largest and fastest grow­ing end mar­ket, and our cus­tomers val­ue us as a strate­gic part­ner and an in­dus­try leader. The ac­qui­si­tion of PPD is a nat­ur­al ex­ten­sion for Ther­mo Fish­er and will en­able us to pro­vide these cus­tomers with im­por­tant clin­i­cal re­search ser­vices and part­ner with them in new and ex­cit­ing ways as they move a sci­en­tif­ic idea to an ap­proved med­i­cine quick­ly, re­li­ably and cost ef­fec­tive­ly. Longer term, we plan to con­tin­ue to in­vest in and con­nect the ca­pa­bil­i­ties across the com­bined com­pa­ny to fur­ther help our cus­tomers ac­cel­er­ate in­no­va­tion and dri­ve pro­duc­tiv­i­ty, while dri­ving fur­ther val­ue for our share­hold­ers.

In the wake of WSJ’s re­port, PPD $PPD shares rose 12% be­fore the mar­ket closed Wednes­day af­ter­noon, and it was up an­oth­er 3% af­ter hours. Ther­mo Fish­er’s stock $TMO had large­ly been down for the day and closed down 1.4%.

As part of the merg­er there were lots of cost “syn­er­gies” that Ther­mo Fish­er plans to re­al­ize — like­ly re­sult­ing in sig­nif­i­cant cuts over the next three years. Ther­mo Fish­er said it plans to save $75 mil­lion over that time pe­ri­od from cuts. They al­so ex­pect an ad­di­tion­al $50 mil­lion in “rev­enue-re­lat­ed syn­er­gies.”

Ther­mo Fish­er is hard­ly new to these types of deals, com­ing a long way from its start as an R&D in­stru­ments and ma­te­ri­als com­pa­ny sell­ing things like lab equip­ment. Back in 2017, Ther­mo Fish­er bought Patheon — a ma­jor con­tract man­u­fac­tur­er — to start pro­vid­ing clin­i­cal tri­al ser­vices and lo­gis­tics.

Then last month, the com­pa­ny dropped $600 mil­lion to shore up its man­u­fac­tur­ing sup­ply chain in the wake of a sharp rise in Covid-19 work. Funds were di­rect­ed to­ward its short-term Covid-19 projects and more than dou­ble its ca­pac­i­ty for the fu­ture.

Though tak­en pri­vate about a decade ago, PPD went pub­lic again in Feb­ru­ary 2020 in a $1.62 bil­lion IPO that at the time was the largest of the year. The com­pa­ny had been look­ing to cap­i­tal­ize not on­ly on an in­crease in out­sourc­ing and R&D spend­ing, but growth in the biotech sec­tor as a whole.

Most of the IPO funds went to­ward re­deem­ing bonds, which were is­sued in a re­cap­i­tal­iza­tion project en­gi­neered by its biggest pri­vate eq­ui­ty back­ers in 2017, its S-1 said. In ad­di­tion to its role as a CRO, PPD al­so of­fers lab­o­ra­to­ry ser­vices.

Con­tract re­search M&A had seen sig­nif­i­cant moves sev­er­al years ago, but large­ly cooled off in the years lead­ing up to the pan­dem­ic. That all changed in Feb­ru­ary with the Icon-PRA deal, a merg­er that com­bined the 5th- and 6th-largest CROs by 2020 rev­enue to cre­ate the 2nd-biggest CRO. The cash and stock deal to­taled rough­ly $12 bil­lion.

Health­care Dis­par­i­ties and Sick­le Cell Dis­ease

In the complicated U.S. healthcare system, navigating a serious illness such as cancer or heart disease can be remarkably challenging for patients and caregivers. When that illness is classified as a rare disease, those challenges can become even more acute. And when that rare disease occurs in a population that experiences health disparities, such as people with sickle cell disease (SCD) who are primarily Black and Latino, challenges can become almost insurmountable.

The End­points 11: They've got mad mon­ey and huge am­bi­tions. It's time to go big or go home

These days, selecting a group of private biotechs for the Endpoints 11 spotlight begins with a sprint to get ahead of IPOs and the M&A teams at Big Pharma. I’ve had a couple of faceplants earlier this year, watching some of the biotechs on my short list choose a quick leap onto Nasdaq or into the arms of a buyer.

Vividion, you would have been a great pick for the Endpoints 11. I’m sorry I missed you.

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Dave Lennon, former president of Novartis Gene Therapies

So what hap­pened with No­var­tis Gene Ther­a­pies? Here's your an­swer

Over the last couple of days it’s become clear that the gene therapy division at Novartis has quietly undergone a major reorganization. We learned on Monday that Dave Lennon, who had pursued a high-profile role as president of the unit with 1,500 people, had left the pharma giant to take over as CEO of a startup.

Like a lot of the majors, Novartis is an open highway for head hunters, or anyone looking to staff a startup. So that was news but not completely unexpected.

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Who are the women su­per­charg­ing bio­phar­ma R&D? Nom­i­nate them for this year's spe­cial re­port

The biotech industry has faced repeated calls to diversify its workforce — and in the last year, those calls got a lot louder. Though women account for just under half of all biotech employees around the world, they occupy very few places in C-suites, and even fewer make it to the helm.

Some companies are listening, according to a recent BIO survey which showed that this year’s companies were 2.5 times more likely to have a diversity and inclusion program compared to last year’s sample. But we still have a long way to go. Women represent just 31% of biotech executives, BIO reported. And those numbers are even more stark for women of color.

FDA au­tho­rizes Pfiz­er's vac­cine boost­er for se­niors, those at high risk for se­vere Covid-19

The Biden administration’s goal of kicking off its booster shot drive for the entire US population this week is not quite going as planned.

First, Pfizer applied for approval of a supplemental application for the booster shots, but since last Friday’s adcomm reviewing them, the plan has devolved into an EUA, which the FDA issued late Thursday evening.

The population that is now eligible for the booster, six months after receiving the first pair of Pfizer-BioNTech vaccines, also narrowed from what Pfizer applied for (everyone who’s eligible for the initial Pfizer shots) to just those who are 65 or older, or at high-risk of a Covid infection, including health care workers and others with occupational hazards.

Stéphane Bancel, AP Images

Fi­nal analy­sis of US-fund­ed Mod­er­na Covid vac­cine tri­al shows 98% ef­fi­ca­cy against se­vere dis­ease

A final look at the results of the placebo-controlled Moderna trial in the New England Journal of Medicine, published Thursday afternoon, shows how the vaccine continues to prevent Covid-19 and severe cases after more than five months following the second shot.

Of the more than 30,000 enrolled in the trial that ultimately led to the vaccine’s EUA, only two people in the vaccine group got a severe form of the disease, compared to 106 in the placebo group — leading to an efficacy of 98%.

Emma Walmsley, GlaxoSmithKline CEO (Credit: Fang Zhe/Xinhua/Alamy Live News)

The fire un­der Glax­o­SmithK­line's Em­ma Walm­s­ley grows as an­oth­er well-known ac­tivist in­vestor grabs its pitch­fork — re­port

Bluebell Capital Partners, a proxy brawler fresh off a campaign to oust global food giant Danone’s CEO and most of its board of directors, has bought a stake in UK drugmaker GlaxoSmithKline with its eyes trained directly on Emma Walmsley, the Financial Times reported Wednesday.

The London-based hedge fund joins another notorious activist firm in Paul Singer’s Elliott Management, which earlier this year called for a shakeup in leadership at GSK to handle what the company described as a wealth of riches across the drug giant’s portfolio hindered by limited vision from top staff.

FDA+ roundup: Bs­U­FA III ready for show­time, court tells FDA to re-work com­pound­ing plan, new guid­ance up­dates and more

The FDA has now spelled out what exactly will be included in the third iteration of Biosimilar User Fee Act (BsUFA) from 2023 through 2027, which similarly to the prescription drug deal, sets fees that industry has to pay for submitting applications, in exchange for firm timelines that the agency must meet.

This latest deal includes several sweeteners for the biosimilar industry, which has yet to make great strides in the US market, with shorter review timelines for safety labeling updates and updates to add or remove an indication that does not contain efficacy data.

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Paul Hudson, Sanofi CEO (Raphael Lafargue/Abaca/Sipa USA; Sipa via AP Images)

In­side look: How a po­ten­tial part­ner­ship turned in­to a $1.9B buy­out for Sanofi

A couple of months before the FDA was set to make a decision on Kadmon’s so-called “knock-your-socks-off kind of results” for its chronic graft-versus-host disease drug, Sanofi put out feelers for a potential collaboration. But an early approval triggered an offer to buy the company outright — and Sanofi didn’t win without a fight, according to an inside look.

Sanofi’s head of business development and licensing Matthieu Merlin reached out to Kadmon on June 26 with a simple request: He wanted to introduce himself and explore potential partnerships, according to an SEC filing. It had been several months since Kadmon’s belumosudil arrived on the FDA’s doorstep, and after delaying their decision once, regulators said they’d have an answer by Aug. 30. But Sanofi wasn’t the only company interested in getting to know the execs over at Kadmon.

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