Traditions Health Acquires 4 Agencies; Help at Home Buys Adaptive

Traditions adds to post-acute care platform

Traditions Health is adding to its growing post-acute care business.

The College Station, Texas-based home health and hospice provider announced a handful of new acquisitions at the start of January. Financial terms of the transactions were not disclosed.

In Oklahoma, Traditions acquired two home health agencies: Traditions Home Care and Secure Home Care. The provider likewise inked two hospice agencies in Louisiana: Grace Hospice & Palliative Care and Heritage Hospice.

The new hospice acquisitions mark the company’s initial entry into the Louisiana market.

“I am delighted to grow the Traditions family in Louisiana and to deepen our capabilities in Oklahoma through the addition of eastern Oklahoma’s premier home health agencies,” Bryan Wolfe, president and CEO of Traditions Health, said in a statement. “This announcement is a fitting way to cap off what’s been an exciting year for Traditions Health.”

Overall, Traditions — a portfolio company of PE firm Dorilton Capital — provides post-acute care services to 5,000 patients across 14 states. The provider has been particularly active in the hospice market, with seven hospice transactions since June 2020.

Help at Home lands Adaptive

Help at Home is on the M&A hunt. Its latest purchase comes just a few months after it was acquired by a consortium of private equity buyers.

Earlier this month, the Chicago-based Help at Home reportedly executed a deal for The Adaptive Group, a home health, hospice and home care services provider that operates across the state of Indiana. Financial terms of the transactions were not disclosed.

On its end, Help at Home is a home- and community-based services provider with a 13-state footprint that features 160 total locations. Centerbridge Partners and The Vistria Group teamed up to purchase Help at Home from Wellspring Capital Management in November.

Founded in 2011, The Adaptive Group is made up of Adaptive Companion Services, Adaptive Hospice, plus Adaptive Nursing and Healthcare Services. The provider has 23 locations across the Hoosier State.

“The winning combination of Adaptive and Help at Home not only means that we will be able to set the bar for high-quality care and service excellence in the state of Indiana, but also throughout the Midwest and across the broader United States,” Adaptive co-founder Mike Root said in a press release. “By partnering with Help at Home, we are better positioned to execute on our mission — to positively impact as many lives as possible through the delivery of exceptional, patient-centric home care services.”

Amedisys board approves stock repurchase plan

Amedisys Inc. (Nasdaq: AMED) announced at the end of last year that its board of directors has authorized a stock repurchase program, under which the company may repurchase up to $100 million of its outstanding common stock through Dec. 31.

The stock repurchase program gives Amedisys the green light to repurchase its common stock “from time to time, in amounts, at prices, and at such times as the company deems appropriate, subject to market conditions and other considerations.”

As of mid-day trading Thursday, Amedisys stock was listed at $291.73 per share.

Founded in 1982, the Baton Rouge, Louisiana-based Amedisys has 21,000 employees who work across 516 care centers in 39 states and the District of Columbia.

“Given our strong cashflow and low leverage, we feel it is prudent to have authorization to buy-back shares throughout the course of the year, including shares granted under the company’s Omnibus Incentive Plan as they vest in 2021,” CFO Scott Ginn said in a statement. ‘This will become a recurring part of our capital deployment strategy; however, our first priority is and will continue to be accretive acquisitions in both home health and hospice.”

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W20 acquires data technology firms Swoop and IPM.ai

W20 has begun 2021 by buying data technology firms Swoop and IPM.ai, adding to its rapidly growing list of acquisitions.

Representing the ninth acquisition for W2O in just over a year, the company said the acquisitions show its commitment to technology and the role it will play in the future of healthcare.

As part of the announcement, W20 has established a new health tech division that combines W2O’s data and analytics software with the Symplur, Swoop and IPM.ai tech and data assets.

W2O said it has evolved its business and made big bets on tech-enablement over the past few years adding that this is another milestone in its transformation to a healthcare innovation company.

In a statement, W20 said Swoop and IPM.ai are pioneers in using machine learning, artificial intelligence, and real-world data to solve big challenges in healthcare.

Swoop creates precise patient audiences, improving targeting of healthcare engagement and empowering patients to become active participants in their treatment journey.

IPM.ai uncovers the ideal patient, enabling accelerated research, development, and marketing of life-saving therapies in under-defined patient populations.

W20 has been on the acquisition trail since it announced a partnership with New Mountain Capital in 2019.

The company achieved revenues of more than $350 million in 2020, an increase of 50% from the previous year.

W20 was founded in 2001 by Jim Weiss and now employs 1,500 people, using analytics and technology to build insights for clients in the life sciences industry.

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Itamar buys Spry to add wearable to its sleep apnoea detectors

Israeli company Itamar Medical has agreed to acquire Spry Health, aiming to use the US company’s wearable technology to develop a watch-like remote monitor for sleep apnoea, a potentially life-threatening condition.

Itamar already markets a sensing device called WatchPAT that attaches to the finger during sleep, measuring vital signs like heart and breathing rate, oxygen levels in the blood, and changes the volume of blood pumped during a heartbeat – known as peripheral arterial tone (PAT).

That is only suitable for a single night’s measurement, however, and Itamar hopes that by adding Spry’s wearable technology it will be able to develop a device that would be suitable for continuous monitoring of sleep apnoea over weeks or even months.

That could provide a clearer picture of the seriousness of the condition, and the accumulated burden of sleep apnoea on a patient’s heart and vascular system.

Sleep apnoea is caused when relaxation of the muscles in the throat cause the airway to narrow, reducing the amount of air taken in and out with each breath. Sometimes the airway can be shut off completely, and if that lasts for 10 seconds or more it is classed as obstructive sleep apnoea.

In severe cases, apnoea episodes can occur hundreds of times a night, each causing a brief period of wakefulness or shallower sleep.

Symptoms are snoring and feeling sleepy during the daytime, but the underlying effects can be damaging and can lead to other health problems, including high blood pressure, heart attack, stroke and diabetes. The condition affects around 54 million people in the US alone.

Spry’s Loop System wearable has already been approved by the FDA for the collection of physiological data like oxygen levels, respiration and heart rate in patients with chronic obstructive pulmonary disease (COPD) and other chronic health conditions.

It does so by emitting electromagnetic waves through the skin. It then measures the reflection of light frequencies to define the concentration of specific molecules in the blood.

Repurposing for sleep apnoea should be fairly swift – Itamar reckons it could have approval for the apnoea indication in 2022. There are other advantages as well, including the fact that the device already has the necessary codes for reimbursement in the US healthcare system.

Itamar’s chief executive Gilad Glick said the Loop System is a “perfect fit” with its aim of developing a continuous wearable monitor for sleep apnoea.

“While finger-based monitoring yields the highest accuracy, it is currently not suitable for longer-term wear,” he added. “A device that is designed for the wrist, while potentially less accurate for precise disease diagnostics, is more suitable for monitoring the continuous accumulated burden of sleep apnoea and its potential impact on other diseases.”

The technology also gives Itamar an opportunity to extend its focus into other diseases areas like COPD, addressing a larger slice of the remote patient monitoring (RPM) market that is predicted to reach a value of $2 billion worldwide in 2027.

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European telehealth firm HealthHero buys MyClinic.ie

European telehealth firm HealthHero has bought MyClinic.ie, a rival based in the Republic of Ireland.

Already a major telehealth player in Europe, HealthHero’s services cover 20 million people and 1,000 businesses across Europe.

The acquisition means HealthHero has a direct-to-consumer offer in Ireland, where it was previously providing services through insurance companies and through businesses to their employees.

It follows HealthHero’s acquisition of Doctorlink in December, one of 11 suppliers selected by the UK’s NHS to provide video consultations for primary care during the pandemic.

Founded in Dublin by doctors Daniel Clear, James Ryan, and Terry Deeney, MyClinic’s services include online repeat prescriptions, mental health, physiotherapy and wellbeing products, as well as video consultations with healthcare professionals ranging from GPs, therapists, midwives, physiotherapists, and fertility specialists.

Services include remote access to experienced doctors and expert clinicians directly to patients, insurance-policy holders and employees.

HealthHero only launched in August last year with aspirations to become the biggest company of its kind under the leadership of founder, the entrepreneur and investor Ranjan Singh.

It announced its launch with the acquisition of Berlin-based telemedicine company Fernarzt, which was set up in 2017 and is already offering thousands of online consultations each month in Germany.

Since the onset of COVID-19 HealthHero has seen demand for its UK and Republic of Ireland services increase by over 300%, and MyClinic has reported a similar surge, making it very timely that HealthHero add a direct-to-consumer offering to its services.

No financial details of the deal were disclosed.

Singh is also managing director of digital health for London based investment house MARCOL, which bankrolled the Fernarzt acquisition.

Singh serves as CEO of the group alongside his role as chairman of Medical Consultations, a 20-year-old telemedicine company based in the UK that is at the heart of the HealthHero group. He was named CEO of the UK company in February.

Singh said: “Since the onset of Covid-19 HealthHero saw demand for its UK and Republic of Ireland services increase by over 300%, and MyClinic has reported a similar surge in demand. It’s an exciting time for HealthHero to add a direct-to-consumer offering to our services.”

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59% of Health Care CFOs See Home Care as Key Investment Area

The majority of health care financial leaders view home care as a key area of investment.

That’s according to a recent survey from BDO, a Chicago-based accounting, tax, financial advisory and consulting organization. Released Monday, the survey includes the responses of 100 CFOs at U.S. health care organizations, including home health providers, with revenues ranging from $250 million to $3 billion.

Specifically, 12% of the CFOs surveyed were leaders at home health or hospice organizations.

The COVID-19 virus is among the drivers making home care a priority. One of the impacts of the public health emergency is that it forced many health care organizations to reevaluate their areas of focus and specialties in order to address patient needs.

When looking toward 2021, 59% of surveyed CFOs identified home care as a priority investment.

This finding further suggests that home-based care providers demonstrated their value in delivering care during the past several months. As the U.S. still faces ongoing COVID-19 surges, the demand for home-based care will likely continue to grow.

“The home health setting has seen many significant contributions to the value-based care supply chain,” Steven Shill, partner and national leader of the BDO Center for Healthcare Excellence & Innovation, told Home Health Care News in an email. “I think the pandemic has just served to confirm an already valuable process.”

Aside from home care, 56% of surveyed financial executives identified elder care as a priority investment.

Another 77% of CFOs said they’re looking to fund primary care.

“A significant number of in-home primary care users are the elder population,” Shill said. “As there is a transition to Medicare Advantage, you will see an acceleration of in-home primary care. The reason is that, when a physician, nurse or [physician’s assistant] visits higher-risk patients in their homes, patients are less likely to need emergency room visits, acute care hospitalizations or institutionalization in a [skilled nursing facility] for example. This will likely reduce the overall costs.”

In addition to identifying key investment areas, the survey also touched on emerging trends. From an M&A perspective, for example, 42% of surveyed CFOs said they believe the COVID-19 emergency will cause increased consolidation throughout health care.

In fact, many health care organizations went into the public health emergency with already weakened balance sheets, according to Shill.

Many have been able to stay afloat thanks to the Paycheck Protection Program (PPP) and CARES Act funding, but eventually, those wells will run dry.

“The focus on consumerism, the move towards value-based care and a major drive toward digitization in health care — trends that existed prior to the pandemic — all contributed to consolidation,” Shill said. “Many health care organizations pre-pandemic did not have the resources to address these trends, which in turn caused them to have weakened positions in the marketplace, increasingly inefficient operations and significant losses to patient volumes, all ultimately resulting in them becoming financially weakened and forcing them to either merge, be acquired or shut down.”

Additionally, BDO’s survey found that partnerships will likely take center stage in 2021.

About 31% of surveyed CFOs said they had plans to acquire physician practices. Another 28% said they planned on merging with another organization, with 24% planning to form a joint venture.

In the home-based care space, this move toward partnerships could be a business opportunity for providers.

“The home health sector has historically been heavily fragmented, often lacking professional leadership and appropriate levels of capital investment,” Shill said. “That is why, in the few years prior to the pandemic, it was getting a lot of attention from private equity. As institutional health care continues focusing on value-based care and overlaying it with the impact of the pandemic, it would seem that this type of partnership will likely see an acceleration.”

BDO’s survey was conducted by Rabin Research Company, an independent marketing research firm.

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Sanofi buys UK’s Kymab and inflammatory disease hopeful for $1.45bn

Sanofi is to acquire UK biotech Kymab in a deal worth up to $1.45 billion as the big French pharma seeks to add to its pipeline of drugs that treat inflammatory diseases and cancer.

Cambridge-based Kymab is one of several rising stars on the UK biotech scene, with technology that uses transgenic mice to develop antibodies optimised for the human immune system.

It has previously signed a bi-specific immune-oncology antibody deal with China’s EpimAb and had begun early research with The Scripps Research Institute in California about a potential new approach to an HIV vaccine.

Kymab has attracted the interest of Sanofi with its fully human monoclonal antibody, KY1005, which has a novel mechanism of action and has the potential to treat a wide variety of immune-mediated diseases and inflammatory disorders.

In August last year Kymab said KY10005 had met both primary endpoints in a phase 2 trial in moderate to severe atopic dermatitis, otherwise known as eczema.

KY1005 demonstrated a consistent treatment effect versus placebo across various key endpoints, including in the Eczema Area and Severity Index (EASI) and additional objective clinical measures.

KY1005 works by bonding to the OX40-Ligand (OX40-L), which forms an important part of the process that activates the immune system.

Interaction between OX40-L and its binding partner OX40 have been shown to play a central role in several inflammatory and autoimmune diseases.

Sanofi and Regeneron’s Dupixent (dupilumab) has already built a blockbuster presence as an injected drug for eczema and asthma.

Regeneron also uses similar technology based on transgenic mice to develop its drugs, and Kymab is therefore a good fit that could allow Sanofi to develop a new generation of immunology drugs in-house.

Kymab’s pipeline also includes the oncology asset KY1044, an ICOS agonist monoclonal antibody, currently in early phase 1/2 development as monotherapy and in combination with an anti-PD-L1.

It’s the latest acquisition from Sanofi as the company looks to build on the success of Dupixent, focusing on cancer and inflammatory diseases drugs while turning its back on the market for diabetes drugs after its big-selling insulin Lantus lost ground to cheaper competitors.

The Kymab deal comes after Sanofi agreed to buy US biotech Principia Biopharma for $3.4 billion in August last year, adding several BTK inhibitor drugs to its pipeline to treat autoimmune disorders.

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Sanofi to Acquire Kymab for ~$1.45B

Shots:

  • Sanofi to acquire Kymab for $1.1B up front and ~$350M following the achievement of certain milestones. The transaction is expected to be completed in H1’21
  • The acquisition will add KY1005 to Sanofi’s pipeline and will expedite its presence in the field of immunology
  • Sanofi will get the global rights of KY1005 which is a mAb targeting OX40-ligand, currently being evaluated in early P-I/II study as monothx. and in combination with an anti-PD-L1 for immune-mediated diseases and inflammatory disorders

Click here ­to­ read full press release/ article | Ref: GlobeNewswire | Image: Bloomberg

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Bioclinica boosts digital trial credentials with Saliency buy

With the ink barely dry on its last merger agreement, clinical trial and imaging specialist Bioclinica is on an expansive drive once again, buying digital clinical trial specialist Saliency.

Silicon Valley-based Saliency adds an artificial intelligence (AI) powered software platform that speeds up analysis of medical images and is used to support trials of pharmaceuticals and medical devices.

Just before the New Year, Bioclinica announced its merger with ERT, ramping up the digitisation of its clinical imaging platform with ERT’s expertise in electronic clinical outcome assessment, cardiac safety, respiratory and wearables.

That deal was directed squarely at improving endpoint data collection in clinical trials, and adding Saliency to the platform takes that effort up a gear.

According to Bioclinica, the AI technology will “dramatically accelerate [its] image processing and quality control capabilities to support a wide range of therapeutic areas”.

The last few years has already seen a big increase in the use of digital technologies to improve subject recruitment retention and access, boost engagement, harvest data and improve the blinding of controlled trials. That trend came even more to the fore in 2020, as the coronavirus pandemic hit face-to-face clinical work.

Digital promises to improve the efficiency of trials, getting results more quickly whilst also reducing costs and – in theory at least – speeding up the time it takes to get new medicinal products approved and onto the market.

Saliency’s platform uses proprietary algorithms to build and train AI models from a small number of de-identified images. The models can be used to screen, redact, or interpret medical images and will be embedded in Bioclinica’s imaging tools.

“Clients rely on us for time-sensitive expert-level image interpretation for their clinical trials so they can focus on outcomes,” said Dan Gebow, chief innovation officer at Princeton, New Jersey-based Bioclinica.

“We evaluated a variety of medical imaging AI platforms and know the Saliency platform is head and shoulders above others in the market in its ability to deliver value for our clients.”

Saliency’s co-founders, Stanford researchers Kevin Thomas and Łukasz Kidziński, will join Bioclinica’s image science team.

The shift towards virtual clinical trials accelerated by the pandemic has also stimulated a flurry of M&A activity amongst technology providers in the last few months.

Last November, for example, digital trial specialist VirTrial was acquired by Signant Health, which provides clinical trial management systems (CTMS), while in the prior month clinical trial data company Medidata snapped up sensor maker MC10’s digital biomarker and wearables business.

ERT meanwhile bought wearable specialist APDM ahead of the merger with Bioclinica, while private equity firm GI Partners took a majority stake in Clinical Ink, which offers a platform for capturing and integrating electronic data from clinical sites.

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PerkinElmer to Acquire Oxford Immunotec for ~$591M

Shots:

  • PerkinElmer to acquire Oxford Immunotec for $22/ share with a premium of ~28.3% to the closing price/ share of $17.15 on Jan 5, 2021, making a total deal value $591M. The transaction is expected to be completed in H1’21
  • The acquisition allows the PerkinElmer to strengthen its portfolio of advanced infectious disease testing solutions to include tuberculosis detection for better serving across the globe
  • The deal will enable PerkinElmer to combine its channel expertise & workflow and testing capabilities with Oxford Immunotec’s proficiencies in T cell immunology with its test kits for latent tuberculosis

Click here ­to­ read full press release/ article | Ref: BusinessWire | Image: NB Herard

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Angelini and Arvelle create neurology player with $960m merger

There’s a new player in the neurology and mental health drugs market after Italy’s Angelini Pharma merged with Switzerland’s Arvelle Therapeutics in a deal worth up to $960 million based around the anti-seizure drug cenobamate.

Angelini is an international pharma company that is part of the privately-owned Italian Angelini Group, while Arvelle is focused on bringing innovative treatments to patients suffering from CNS disorders.

The deal gives Angelini an exclusive European license to market cenobamate, a drug being developed for drug-resistant focal-onset seizures in adults.

It is already in the late stages of development and expected to be approved in Europe later this year.

The license covers the European Union and other countries in the European Economic Area, such as Switzerland and the UK. As a result the all-cash deal will see Angelini pay $610 million following regulatory approval of cenobamate, followed by a further payment of $340 million.

Arvelle was founded in 2019 and has been focused on developing cenobamate, which has already been designated as a Promising Innovative Medicine by the UK regulator, the Medicines and Healthcare products Regulatory Agency (MHRA).

It is a small molecule with a dual action, which stimulates the γ-aminobutyric acid (GABAA) ion channel while also inhibiting voltage-gated sodium currents.

Study findings so far have shown cenobamate can produce a significantly greater reduction in median seizure frequency and more patients achieving a 50% or greater reduction in seizure frequency compared to the placebo group.

It is already approved by the FDA as an anti-seizure drug for partial-onset (focal onset) seizures in adults, where it is available under the brand name Xcopri and marketed by SK Biopharmaceuticals, which discovered and developed it.

SK Biopharmaceuticals, a pharmaceutical company listed on the Korea Stock Exchange, announced that it has agreed to sell its 12% stake in Arvelle Therapeutics to Angelini Pharma.

SK Biopharmaceuticals will remain eligible to receive all payments inherited by a license agreement signed between Arvelle Therapeutics and SK Biopharmaceuticals in February 2019.

Revenue share payments due to certain of the Arvelle shareholders will be assumed by Angelini Pharma.

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Hologic to Acquire Biotheranostics for ~$230M

Shots:

  • Hologic acquires Biotheranostics to speed up its entry in the oncology market. The transaction is expected to be completed in Feb’2021
  • The acquisition will provide Hologic access to Biotheranostics’ CLIA lab and will aid in accelerating market development for novel tests
  • The acquisition allows Hologic to leverage commercial capabilities and expertise in molecular diagnostics automation to accelerate growth and deliver more personalized treatment for women

Click here ­to­ read full press release/ article | Ref: Business Wire | Image: Business Wire

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Merck KGaA Acquires AmpTec to Strengthen its mRNA Capabilities for Vaccines, Treatments and Diagnostics

Shots:

  • The acquisition will integrate AmpTec’s PCR-based mRNA technology with Merck’s expertise in lipids manufacturing, providing combine offering across mRNA value chain
  • The deal will expand Merck’s capabilities to develop & manufacture mRNA for use in vaccines, treatments, and diagnostics applicable in COVID-19 and many other diseases. Additionally, AmpTech’s diagnostic business focusing on customized long RNAs and DNAs for IVDs, complements existing Merck’s portfolio
  • The addition of AmpTech’s PCR-based technology to Merck allow the companies to offer innovative technologies, products, and services, advancing life-enhancing therapies

Click here ­to­ read full press release/ article | Ref: Merck KGaA | Image: Glassdoor

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Stryker Acquires OrthoSensor and its Knee Surgery Sensor Technology

Shots:

  • Stryker acquires OrthoSensor and its Verasense intraoperative sensor tech, enhancing the ortho giant’s Mako robots
  • The acquisition allows Stryker to empower surgeons with comprehensive data-driven solutions. The sensor tech will boost Mako surgical robotics systems, enhancing workflow through one complete data-driven feedback mechanism
  • Moreover, OrthoSensor’s MotionSense remote patient monitoring wearables and mobile application combined with the OrthloLogIQ cloud-based data platform will enhance Stryker’s data analytics capabilities

Click here ­to­ read full press release/ article | Ref: GlobeNewswire | Image: WKBN.com

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LHC Group Finalizes Three Acquisitions; A-1 Preferred Sources Buys On The Mark Services

LHC Group finalizes hospice, palliative care purchases

LHC Group Inc. (Nasdaq: LHCG) has finalized acquisition agreements in Arizona and Oklahoma.

By doing so, the Lafayette, Louisiana-based home health, hospice and personal care services giant expands its scope of services in the Phoenix area while entering the Oklahoma hospice market for the first time.

Specifically, LHC Group has finalized its acquisition Grace Hospice in Tulsa, Oklahoma, a move expected to add annualized revenue of about $12.1 million moving forward. The purchase agreement was first announced in November.

Meanwhile, in Mesa, Arizona, LHC Group has completed its purchase of East Valley Hospice and East Valley Palliative Care. The Arizona deal, expected to add annualized revenue of about $4.8 million, was likewise first announced in November.

Overall, LHC Group’s existing hospice footprint spans more than 110 locations around the U.S. Broadly, its M&A strategy is largely focused on tri-locating home health, hospice and personal care services in key markets.

A-1 Preferred Sources acquires On The Mark Services

A-1 Preferred Sources has acquired On The Mark Services Inc. Financial terms of the deal were not disclosed.

Headquartered in Columbus, Ohio, A-1 Preferred Sources is a home health provider that cares for individuals throughout central Ohio, offering a range of in-home care services to both adult and pediatric patients. On The Mark Services is a supported-living agency that serves the same region.

With close to 50 employees, On The Mark supports adult patients with developmental disabilities across Franklin and Delaware counties. As a result of the acquisition, A-1 will be able to provide a seamless connection for its pediatric patients transitioning into adult care services, according to company leadership.

“We have these great kids we’ve been working with. We’ve seen them grow and have had caregivers with them for years, and now we can help them get out into the community as adults,” Sanjay Patel, president and owner of A-1 Preferred Sources, said in a statement. “On The Mark provides us with that foundation.”

On The Mark’s founder, Mark Stuntz, will join A-1 Preferred Sources in a new role.

“A-1 can offer our employees new opportunities by training as a home health aide and working on additional supported living sites,” Stuntz said. “Plus, the [our same] clients now have the added benefit of receiving all services from one provider.”

WelbeHealth announces rebrand

WelbeHealth — a Program of All-Inclusive Care for the Elderly (PACE) operator based in Melo park, California — is uniting all of its brands under the “WelbeHealth” name. The new branding is meant to emphasize the organization’s “cohesion across geographic areas,” according to the company.

Individual brands included programs formerly known as Stockton PACE, Pacific PACE and LA Coast PACE.

“From our shared mission and values to our remote home-based care model through the pandemic, we’ve always operated as one WelbeHealth,” founder and CEO Dr. Si France said in a statement. “Joining our programs more clearly under the WelbeHealth name will help us convey this unity to our participants and our communities.”

Effective Jan. 1, the organization’s programs will operate formally as WelbeHealth Sierra PACE, WelbeHealth Pacific PACE, WelbeHealth Coastline PACE and WelbeHealth Sequoia PACE.

PACE is a Medicare and Medicaid program that provides comprehensive medical and social services enabling older adults to live in the community instead of a long-term care facility.

Similar to other PACE operators, WelbeHealth shifted to a mostly remote home-based care model at the onset of the COVID-19 pandemic. Traditionally, PACE models have often revolved around a center or hub, with wrap-around services also delivered in the home.

New Town Square location opens in Florida

There is a new Town Square location opening in the Sunshine State.

Town Square, pioneered by the George G. Glenner Alzheimer’s Family Center, is the center-based, reminiscence-therapy franchising model launched out of Senior Helpers.

Florida TS1 LLC, a franchisee of Town Square, will bring the concept’s first Florida location to Sarasota, having signed an 11,120-square-foot lease in the Oaks Plaza shopping center. Town Square Palmer Ranch, expected to open this summer, will be a 1950s-themed day center for seniors with Alzheimer’s and dementia.

Similar to other Town Square locations, the new facility will have a diner, theater, library, pub, city hall, health club and other storefronts. That’s on top of core care offerings.

Currently, Town Square concepts are open in Perry Hall, Maryland, and San Diego, California, with other locations expected to open soon in six other cities across the U.S.

Senior Helpers CEO previously described the Town Square model as an effective and affordable alternative to one-to-one home care for certain individuals.

“You have the 30, 40 or 50 million people who are in the [middle market] and might not have the money to pay for home care at $25 or $26 dollars an hour,” Ross previously told Home Health Care News. “They don’t qualify for Medicaid. They are not a veteran or a long-term care insurance policyholder. What do you do for them? I think Town Square offers that group a care option.”

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Hologic to Acquire Somatex for ~$64 M

Shots:

  • Hologic acquired Somatex Medical Technologies for ~$64M. The acquisition of Somatex’s differentiated products will enable Hologic to strengthen & expand its breast marker portfolio
  • The acquisition allows the company to expand its biopsy portfolio with the improvement in the biopsy experience for their patients. The acquisition provides Hologic additional expertise and capabilities to continue to grow its breast health portfolio
  • Somatex specializes in the development & manufacturing of minimally invasive devices in the areas of tumor diagnostics, biopsy and interventional specialties and includes the Tumark family of tissue markers, which were distributed by Hologic in the US prior to the acquisition

Click here ­to­ read full press release/ article | Ref: Hologic | Image: Mass Device

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WellSky Completes $1.35B Purchase of CarePort Health

WellSky announced Thursday that it has completed its acquisition of care coordination software company CarePort Health.

Under terms of the deal — first announced in October — WellSky purchased CarePort from Allscripts Healthcare Solutions (Nasdaq: MDRX) for a price tag of $1.35 billion. Allscripts is a health care information technology provider.

CarePort’s platform helps health systems and hospitals connect with post-acute care providers, including home health agencies.

“We take what is primarily a manual process with nurses and discharge planners, calling around trying to figure out if a provider can take on a patient based on their needs … and we make that into an electronic process,” Lissy Hu, CEO of CarePort, told Home Health Care News.

The Boston-based company currently serves 1,000 hospitals and health systems, as well as 110,000 post-acute provider locations.

Over the years, Hu has seen an increase in the need for home-based care services. That need has only accelerated during the public health emergency.

WellSky — a company that serves more than 15,000 client sites internationally — brings a strong network of home-based care services to the table.

“I think over the next couple years, even as we look post-COVID, we are going to see a lot more patients needing these home-based services,” Hu said. “WellSky delivers home-based care services to about a quarter of home health patients. They have a really robust community-based and social determinants of health network. Those are all the areas that we see post-hospital care going. That’s one of the reasons why the alignment was so natural.”

Additionally, the deal will give CarePort the ability to add further scale. Besides giving CarePort access to a greater referral network, the sale allows the company to grow its team.

Over the next six to 12 months, CarePort will be looking to hire roughly 40 to 50 new employees, according to Hu.

CarePort currently has about 200 employees.

“WellSky is going to be making an investment in CarePort,” Hu said. “They’ve always had a really strong reputation for investing in R&D and innovation in technology. We’re really excited about the commitment that WellSky made, not only to our customers and their benefit, but to our team as well.”

For CarePort, the COVID-19 emergency has only underscored the necessity of the services the company provides.

Hu noted that, prior to the public health emergency, liaisons from home health agencies or other post-acute care providers were able to enter the hospital and screen patients. This has changed drastically.

“As we shifted to hospitals being really restricted to all but the most essential workers, … the need to be able to coordinate this care electronically is even more important,” she said. “It’s even more important to make sure that the places you’re sending patients and the services you’re matching them up with get delivered.”

Ultimately, Hu believes companies like CarePort will play a key role in ensuring the delivery of care.

“We can’t just be satisfied that the patient who was supposed to get home health services actually had a visit,” she said. “The standard with home health is that the first visit occurs within the first 24 to 48 hours of discharge. Having technology that brings together hospitals and post-acute care providers makes sure that those transitions are efficient and high-quality.”

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Servier beefs up in cancer, buying Agios’ oncology business for $1.8bn

French pharmaceutical company Servier has swooped on Agios Pharma’s marketed and experimental cancer drugs, buying the entire franchise in a deal that leaves the US biopharma focused on genetic disorders.

It’s a major change of direction for Boston-based Agios, which has been concentrating on the oncology market since its inception in 2008, bringing the Bristol Myers Squibb-partnered Tibsovo (ivosidenib) for IDH1-mutant acute myeloid leukaemia to the US market.

It also shares commercial rights to BMS’ Idhifa (enasidenib), also for AML, and according to Bloomberg the two drugs should bring in around $244 million in revenues to Agios’ top line this year. Agios hit a setback for Tibsovo in Europe this year however after the EMA rejected the marketing application for the drug.

Servier is paying $1.8 billion upfront for the oncology assets, with the total value of the deal potentially rising to $2 billion if Agios’ key pipeline candidate vorasidenib – a dual inhibitor of mutated IDH1 and IDH2 in trials for a form of brain cancer called glioma – delivers as expected.

That will give Agios the financial resources it needs to develop mitapivat, a potential treatment for the inherited disease pyruvate kinase (PK) deficiency, as well as sickle cell disease and beta thalassaemia, that hit the mark in a phase 3 trial earlier this month. It’s hoping to launch mitapivat in the US and Europe in 2022.

With Tibsovo, Servier gets a drug that hasn’t made the headway expected in the marketplace since its launch two years ago, although the French company will be able to ramp up the commercial drive for the drug through its own oncology sales force – which in the US will now be bulked up by Agios reps.

Tibsovo also has potential in newly-diagnosed AML, which would expand the market for the drug significantly.

Cancer is a key area for the French company, which sells products like Pixuvri (pixantrone) for non-Hodgkin lymphoma (NHL) and colorectal cancer therapy Lonsurf (trifluridine/tipiracil) and devotes around half its R&D budget to oncology with around a dozen candidates in clinical development.

The Agios deal comes just a day after Servier announced a strategic alliance with Celsius Therapeutics to find new drug targets for colorectal cancer. This year it’s also doubled down on an alliance with off-the-shelf CAR-T specialist Cellectis, and bought Danish cancer biotech Symphogen.

Agios will retain a royalty stream on Tibsovo and vorasidenib of 5% and 15% respectively until the drugs lose their patent protection.

Agios CEO Jackie Fouse said in a statement: “The result of a deliberative strategic review, this decision reflects the progress we have made understanding and harnessing the science and promise of PK activation and captures the full value of our oncology assets.”

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AccentCare, Seasons Finalize Merger Aimed at Streamlining Patient Care

AccentCare and Seasons Hospice & Palliative Care have cleared all regulatory hurdles and officially merged, the post-acute care providers announced Tuesday.

The Dallas, Texas-based AccentCare is ranked as the fifth-largest home health provider in the nation in terms of overall market share, according to LexisNexis statistics. Similarly, the Rosemont, Illinois-based Seasons is listed as the fifth-largest hospice provider in the U.S.

The two providers — along with AccentCare’s private equity sponsor, Advent International — were able to finalize their merger agreement in a little over a month’s time. The companies initially unveiled their industry-shaping plans on Nov. 16, with AccentCare CEO Steve Rodgers digging into the strategy during the Home Health Care New Capital+Strategy event on Dec. 8.

“We’ve had a very successful hospice business internally at AccentCare,” Rodgers said at the event. “But it hasn’t necessarily been one at scale.”

Prior to the merger, those operations formed “about a $70 million hospice business,” the CEO noted. That number will grow substantially with Seasons, which offers compassionate care through 31 programs in 19 states.

AccentCare leadership began identifying areas to invest in last year. After deciding to “go big” on hospice, the company weighed tuck-in options while also reviewing some of the larger, high-quality providers up for grabs.

Seasons’ reputation, investment in its workforce and geographic footprint made it a natural fit, Rodgers said.

“From a culture standpoint, they’re very culturally aligned with AccentCare, which is one of the No. 1 things we always look for,” he said. “The second piece, though, really had to do with them being in big urban marketplaces, just like AccentCare tends to be in larger urban marketplaces.”

Together, the combined organization will operate more than 225 sites of care across 26 states, employing nearly 30,000 workers.

Additionally, the merged enterprise will maintain several dozen joint ventures and partnerships with health systems, physician practices and payers.

The combined AccentCare-Seasons will be headquartered in Dallas, with its hospice division still based out of Rosemont. It will care for more than 175,000 patients and families each year.

“Season gives us the whole continuum of care, kind of across the board, in addition to being able to supplement these partnerships we have out there in the marketplace,” Rodgers said. “We can bring new services into [those partnerships].”

Seasons subsidiaries included in the merger include Health Resource Solutions, a home health provider in Illinois, Nebraska and Indiana with a patient census of about 2,500. Gareda, a personal care business in Illinois that serves about 4,500 clients a year, is also included.

“The last piece, I’d say, that got us excited about [Seasons] is they have a very mature palliative care group,” Rodgers added. “And I think we all know that the complexity of the patients we are responsible for taking care of is increasing.”

Guggenheim Securities served as the exclusive financial advisor to Seasons Hospice & Palliative Care in the transaction.

“We’re thrilled to head into the New Year as one organization,” Seasons CEO Todd Stern said in a Tuesday press release. “The impact that we’re able to have together, with combined resources and new technologies, will only enhance the patient experience and quality of care for the individuals we serve and the partners who count on us.”

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Servier to Acquire Agios’ Oncology Business for ~$2B

Shots:

  • Agios to receive ~$1.8B upfront in cash & ~$200M as regulatory milestones for Vorasidenib along with 5% royalties on sales of Tibsovo in the US from transaction close through the loss of exclusivity and 15% royalties on sales of vorasidenib in the US from first commercial sale through the loss of exclusivity
  • The acquisition is expected to close in Q2’21. The acquisition allows Servier to strengthen its product portfolio and drug development pipeline in oncology
  • The transaction includes the transfer of Agios’ oncology portfolio and associated employees, including its Tibsovo and pipeline and clinical programs, including vorasidenib

Click here ­to­ read full press release/ article | Ref: PRNewswire  | Image: Enzo Life Sciences

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Blank-Check Company Deerfield to Combine CareMax, IMC Medical Group in $614M Play

The health care SPAC boom continues.

On Friday, Deerfield Healthcare Technology Acquisitions Corp. (Nasdaq: DFHT) announced it is acquiring CareMax Medical Group and IMC Medical Group Holdings for $364 million and $250 million, respectively.

The New York-based Deerfield — a special purpose acquisition company — says it plans on merging the two senior care organizations and taking the combined enterprise public.

After doing so, the combined entity will be renamed “CareMax Inc.,” with a Nasdaq ticker symbol to come later.

“CareMax’s differentiated health care delivery model, focused on care coordination with vertically integrated ambulatory care and community-centric services, ensures that members receive the right care at the right time in the most efficient setting,” Deerfield noted in a press release. “The goal of CareMax is to intercede as early as possible to manage chronic conditions for its patients in a proactive, holistic and tailored manner.”

As currently structured, CareMax and IMC Medical Group are each technology-enabled providers of value-based care to seniors. Both companies are headquartered in Miami.

Following the combination, CareMax will oversee 26 wholly owned medical centers in Florida, serving roughly 16,000 Medicare Advantage (MA) members in value-based contracts, in addition to thousands of others in managed care.

Overall, CareMax will have partnerships with 19 different payers, including affiliates of Anthem (NYSE: ANTM), Humana (NYSE: HUM), United Healthcare (NYSE: UNH), Centene (NYSE: CNC) and Florida Blue.

On top of its brick-and-mortar medical centers, CareMax will own CareOptimize, a technology platform that is used by health care providers across the U.S.

Approximately 64% of CareMax patients are dually eligible for Medicare and Medicaid, according to Deerfield.

“Our patients live in medically underserved communities where the hospital has become the first, and often only, option for health care,” the blank-check company highlighted in an investor presentation. “We specifically focus on access and quality for underserved communities.”

Ultimately, Deerfield hopes to create a vertically integrated “one-stop shop” for its patients.

Although a chunk of the business will be focused on center-based care, CareMax’s whole-person approach to health will also tie in home health visits and house calls. Other wrap-around services for seniors will include primary care, transportation and healthy meals, plus other offerings focused on social determinants of health.

CareMax will likewise leverage virtual care tools, which have grown exponentially more popular during the COVID-19 pandemic.

Upon closing, CareMax will be led by CEO Carlos de Solo, who founded CareMax Medical Centers in 2011 and CareOptimize in 2015. Bill Lamoreaux, the current CEO of IMC Medical Group, will become executive vice president of CareMax.

Richard Barasch, the veteran health care executive at the helm of Deerfield, will serve as executive chairman of the combined company upon closing. Barasch also has ties to home health equipment company AdaptHealth Corp. (Nasdaq: AHCO), which went public last year.

“Value-based care, built upon the premise of providing extensive primary care, is recognized as an effective way to lower health care costs and improve patient outcomes in Medicare Advantage, especially for dual-eligible beneficiaries and those with chronic conditions,” he said in a statement. “We believe that CareMax operates a best-in-class delivery model supported by a highly scalable technology backbone.”

The $364 million price tag for CareMax Medical Center and CareOptimize will be a mix of cash and stock. Current equity holders of CareMax Medical Centers are primarily the founders and executives of the company.

The $250 million purchase of IMC Medical Group will also be a mix of cash and stock. The company’s current equity holders include private equity firms Comvest Partners and Athyrium Capital Management.

To finance the acquisitions and merger, Deerfield will sell $400 million in stock to multiple investors, including Fidelity Management & Research, Maverick and Eminence Capital, as well as funds and accounts managed by BlackRock. RBC Capital Markets will provide debt financing.

Assuming no redemptions of Deerfield public shares, the current owners of CareMax Medical Centers and IMC Medical Group will collectively own 27% of the combined enterprise.

“We are excited to invest and partner with [Deerfield] as part of the combination of these two best-in-class, value-based primary care organizations,” Roger Marrero, a senior partner at Comvest Partners, said in a statement. “Primary care has always been the gatekeeper for most health care spend, and we believe this model represents the best way to improve quality outcomes and manage costs across the health care continuum.”

Moving forward, CareMax will pursue a dual strategy of organic growth and acquisitions. The company projects organic revenue growth of 15% over the next few years, noting that figure could be higher depending on future transactions.

Deerfield estimates that CareMax will have an initial market capitalization of about $800 million, with approximately $233 million of cash on its balance sheet. The combined company’s total pro forma enterprise value will be $692 million at closing.

“CareMax plays a significant role in the lives of our members by providing accessible, quality medical care and comprehensive social activities and services,” de Solo said in a statement. “Seniors represent the most significant opportunity to lower the national health care spend, and we believe that CareMax possesses the technology, knowledge and know-how to continue to bend this cost curve.”

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The top 5 pharma M&A deals of 2020

2020’s M&A activity hasn’t quite reached the heights of last year’s, where two pharma mega-mergers – BMS’ buyout of Celegne and AbbVie’s acquisition of Allergan – accounted for almost 40% of total M&A deal values.

That said, there were still some interesting moves indicating new directions of travel for big pharma players – with most deals focused on specific drugs from biotechs, particularly in cancer (though we did get rumours of an AstraZeneca-Gilead merger, which would have been the biggest pharma M&A deal of all time).

Here we take a look at the biggest mergers and acquisitions of 2020 and what they might mean for the companies involved.

AstraZeneca & Alexion

By far the biggest pharma deal of the year is AstraZeneca’s late-breaking offer to buy Alexion for $39 billion.

Alexion has routinely featured among lists of top biopharma takeover prospects in the last couple of years, and with the purchase, AZ will bolster its immunology franchise with $4 billion blockbuster Soliris (eculizumab) and longer acting follow-up Ultomiris (ravulizumab), plus a pipeline of 11 drugs for rare and autoimmune diseases.

It marks something of a departure from AZ’s relentless focus on deal-making in oncology, its top product category, and also comes as Alexion has been locked in a battle with activist shareholders pushing for a sale.

Boston, US-based Alexion spent a lot of 2019 arguing the merits of remaining independent, saying that while Soliris is approaching the end of its patent life – with heavyweight competitors like Amgen already eyeing the biosimilar market for the drug – Ultomiris and its pipeline could help drives sales to $9 to $10 billion in 2025.

The threat of biosimilar competition to its cash cow has weakened Alexion’s share price, providing an opportunity for AZ, which has been rumoured to be angling for a large acquisition for several months.

While the first biosimilars to Soliris have already reached the market in some countries like Russia, Alexion cut a settlement deal with Amgen in the summer that prevents the latter’s biosimilar version of Soliris from entering the US market until 2025, avoiding a near-term cash cliff.

In the meantime, Ultomiris has been gathering momentum, fuelled by intravenous dosing every eight weeks, rather than every two weeks with Soliris. It racked up $340 million in sales last year, and added another $763 million in the first nine months of this year, backing up its blockbuster credentials.

Meanwhile, AZ will also pick up three other drugs – Strensiq (asfotase alfa) for hypophosphatasia, Kanuma (sebelipase alfa) for lysosomal acid lipase deficiency (LAL-D) and anticoagulant reversal agent Andexxa (andexanet alfa) – that collectively brought in almost $675 million in the first nine months of 2020.

Gilead & Immunomedics

The AZ-Alexion deal is likely to be the only big pharma merger this year, but Gilead’s purchase of US biotech Immunomedics and its potential cancer blockbuster Trodelvy isn’t far off it in terms of value, with the deal totalling $21 billion.

California-based Gilead announced its strong intentions in oncology in 2017 with its $11.9 billion buy of Kite Pharma and followed that earlier this year by acquiring immuno-oncology firm Forty Seven for $4.9 billion (see below). Shoring up its assets in a wider range of disease areas will help the company weather the storm as the pool of patients eligible to receive its hepatitis C drugs such as Sovaldi shrinks.

Trodelvy (sacituzumab govitecan) is a first-in-class TROP2 antibody-drug conjugate drug that was granted accelerated approval by the FDA in April for adults with metastatic triple-negative breast cancer (TNBC), who have received at least two previous therapies for metastatic disease.

Data from trials of the drug wowed ESMO in September – Trodelvy was shown to significantly extend overall survival (OS) and improved overall response rate (ORR) and clinical benefit rate (CBR), compared with standard chemotherapy in TNBC patients with brain metastases treated with at least two therapies.

The 500-plus patients in ASCENT had received a median of four previous anticancer treatments, but Trodelvy significantly improved OS with a median of 12.1 months, compared with 6.7 months in patients treated with chemotherapy.

Johnson and Johnson & Momenta

This $6.5 billion deal means that J&J has added potential inflammatory disease blockbuster nipocalimab to the pipeline at its Janssen pharmaceuticals unit.

J&J thinks that Momenta’s lead drug nipocalimab could be a kind of Swiss army knife drug that could be used across a range of inflammatory diseases including maternal-foetal disorders, neuro-inflammatory disorders, rheumatology, and autoimmune haematology.

The success of AbbVie’s Humira (adalimumab), which peaked at almost $20 billion in sales in 2018, demonstrates the potential of inflammatory diseases drugs to make mega-bucks.

Johnson & Johnson’s own Remicade (infliximab) was also a blockbuster several times over thanks to approvals in a range of inflammatory diseases including Crohn’s, rheumatoid arthritis and psoriasis.

But like the rest of this first generation of antibody-based drugs, Remicade has been hit by cheaper competition from biosimilars and the hunt is on for newer drugs that outperform standard therapy in terms of safety and efficacy.

Whether nipocalimab achieves the astronomical figures seen from Humira and Remicade remains to be seen – but the price J&J has paid shows the big pharma thinks it has considerable potential.

Momenta is best known for producing a generic version of Teva’s multiple sclerosis drug Copaxone (glatiramer), but nipocalimab is the company’s lead pipeline asset and the main rationale behind the acquisition.

“The first wave had disproportionate health, economic and social impacts on people in lower socioeconomic groups and those with black, Asian and minority ethnic backgrounds”

Gilead & Forty Seven

Further cementing Gilead’s ambitions in cancer, this $4.9 billion deal adds an antibody targeting several blood cancers to the company’s research pipeline.

Forty Seven is based in Menlo Park, a short drive away from Gilead’s base in Foster City, and is developing magrolimab, which is targeting myelodysplastic syndrome (MDS), acute myeloid leukaemia (AML), and diffuse large B-cell lymphoma (DLBCL).

A potential first-in-class therapy, magrolimab targets CD47, which produces a “do not eat me” signal that allows cancer cells to avoid destruction (an area AbbVie has almost invested significantly in).

By targeting CD47 it’s hoped that magrolimab will allow the patient’s own innate system to engulf and eradicate cancer cells.

The company presented promising results from a phase 1b study of magrolimab in patients with MDS and AML at the American Society of Hematology meeting in December.

Sanofi & Principia Biopharma

Sanofi added a potential multiple sclerosis drug to its pipeline when it bought Principia Biopharma for up to $3.68 billion in August.

The French pharma paid $100 per share in cash for San Francisco-based Principia, which specialises in Bruton’s kinase (BTK) inhibitor drugs, after the deal was unanimously agreed by both boards of directors.

Sanofi’s acquisition builds on a partnership to develop central nervous system drugs that began in late 2017.

In a statement Sanofi said that the acquisition will give it full control of the brain-penetrant BTK inhibitor SAR442168, making marketing more efficient and eliminating any royalty payments due under the 2017 agreement.

The drug known for short as ‘168 reduced multiple sclerosis brain lesions by 85% compared with placebo in a phase 2b trial.

Phase 3 development has begun and will comprise four pivotal trials across the MS disease spectrum.

Another of Principia’s BTK inhibitors, rilzabrutinib, is being tested in phase 3 for patients with moderate to severe pemphigus, a rare and debilitating autoimmune disease that causes blistering of the skin and mucous membranes.

Principia also has a topical BTK inhibitor, PRN473, which is in phase 1 development for immune diseases that could benefit from local application to the skin.

The deal follows Sanofi’s announcement late last year that it is rethinking its R&D operations, turning its back on diabetes and focusing on badly needed “transformative” therapies and maximising the potential of its asthma and eczema drug Dupixent.

CEO Paul Hudson, who was appointed to the role in June last year, has already acquired the oncology firm Synthorx and signed a potential $2 billion collaboration with Kymera Therapeutics to develop immune-inflammatory drugs.

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Philips to Acquire BioTelemetry for ~$2.8B

Shots:

  • Philips to acquire all outstanding shares of BioTelemetry and its wearable heart-tracking devices for $72/ share in cash with a 16.5 % premium to a closing price of BioTelemetry on Dec 17, 2020, making a total value ~$2.8B. The transaction is expected to be completed in Q1’21
  • The acquisition complements Philips’ cardiac care portfolio and its strategy to transform the delivery of care along the health continuum with integrated solutions
  • The acquisition integrates Philips’ patient monitoring position in the hospital with BioTelemetry’s cardiac diagnostics and monitoring position outside the hospital

Click here ­to­ read full press release/ article | Ref: Philips | Image: Bloomberg Quint

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Backed by Harpeth Capital, Industry Veteran Launches HomeFirst Home Healthcare

Backed by investment bank Harpeth Capital, a home-based care veteran recently threw his weight behind a new home health venture. The new company is called HomeFirst Home Healthcare, led by James Happ, who serves as president and CEO.

If Happ’s name sounds familiar, it’s because he spent some time at the leadership level of SunCrest Home Health, which is now an LHC Group Inc. (Nasdaq: LHCG) joint venture. Happ brings all of his past experiences to this next chapter, he told Home Health Care News.

“While at SunCrest, I was involved in business development,” Happ said. “We had made several acquisitions during my time there. I basically implemented a strategic planning process at SunCrest and [the company] grew very quickly and successfully. It was really all because of very effective executive leadership and operational leadership.”

As far as HomeFirst, the company was formed to buy certificates of need and state licenses of two home health agencies that served 24 counties in Tennessee. HomeFirst’s services lines include skilled nursing, private-duty care, physical therapy, occupational therapy, speech-language pathology and medical social work.

The road to HomeFirst has been a long one for Happ.

He first met with Harpeth Capital in 2007 when he was coming off of a successful run at Tender Loving Care, a home health company that would later be acquired by Amedisys Inc. (Nasdaq: AMED). At the time, he was looking to acquire a home health agency.

“We weren’t actually successful there, but [Harpeth Capital] continued on and got themselves involved in following the industry and became really impressed with the success that Suncrest had,” Happ said.

By the time Happ approached Harpeth Capital again, the investment bank was very keen on entering the home health space.

“When this opportunity presented itself here in Nashville, I approached the folks at Harpeth and they were very interested in getting involved through their Harpeth Ventures Opportunity Fund,” he said. “This is a relatively new fund that’s going to invest in health care opportunities. This is their first investment. Had they not been very comfortable with the senior leadership and their experience in the home health industry, they may have not been as excited.”

When Happ first eyed what would eventually become HomeFirst, the industry was on the verge of a major reimbursement shakeup with the upcoming Patient-Driven Groupings Model (PDGM).

“Last October, we were made aware that these two licenses were for sale,” Happ said. “We kind of slowed the acquisition process because PDGM was on the horizon. We wanted to get a feel for how that was going to be received and how that would play out within the industry.”

Five months later, the industry began seeing the impacts of the COVID-19 emergency. This only further slowed down the acquisition, according to Happ.

But then two months later, acquisition talks picked up again.

“It became clear that it was still a great opportunity for us,” Happ said. “The assets that we acquired were distressed assets. It provided an opportunity for us to acquire — at what we felt was a very attractive price. After quite a bit of due diligence, we closed on the transaction on Sept. 15.”

As HomeFirst moves forward as a company, private-duty home care is an area where Happ sees a lot of opportunities.

“Tennessee has a program called TennCare, which is a state Medicaid program, which has been popular for many years,” Happ said. “The Tennessee Medicaid program just continues to renew and improve. There are lots of other opportunities in private-duty as well, whether it’s long-term care insurance providers, or even out-of-pocket private-pay-type services. We see those opportunities expanding across the country on a daily basis.”

As a veteran in the home-based care arena, Happ’s years of experience have given him an interesting perspective.

One key change he’s seen over the years is the way the federal government both views and reimburses home health.

“The government, in the past, never really recognized efficiency,” Happ said. “They paid based upon the cost that you incurred, as long as you were under certain caps. Over the last 20 years, they’ve very slowly moved towards outcome-based reimbursement.”

Happ has also seen more overall awareness of the benefits that care in the home setting can provide.

“The home is now viewed as a place where you have to be serious about focusing on delivering care,” he said. “We’ve been in this industry now, all these years, we’re in a great position to be able to assist the government and all other health care providers that are seeing their patients at home.”

Now 90 days in, Happ is already looking to the future and thinking about expansion opportunities.

“As we get our foundation and our structure completely built down, which we’re in the midst of, then we’ll be looking for opportunities to expand in neighboring territories and states,” Happ said.

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Novartis to Acquire Cadent Therapeutics for ~$770M

Shots:

  • Novartis to acquire all outstanding shares of Cadent for a total value of ~$770M. Cadent to receive $210M up front and is eligible for ~$560M as milestones. The transaction is expected to be close in Q1’21
  • Novartis gains full rights to Cadent’s NMDAr program which consist of two clinical programs: CAD-9303 and MIJ-821, an NMDAr negative allosteric modulator that was licensed to Novartis in 2015
  • Additionally, Novartis gains Cadent’s pre-clinical programs and clinical stage (CAD-1883) movement disorder program

Click here ­to­ read full press release/ article | Ref: Novartis | Image: PRNewswire

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Novartis buys neurology biotech Cadent for up to $770m

Novartis is to buy neuroscience drugs firm Cadent Therapeutics in a deal worth up to $770 million.

The big Swiss pharma already has a presence in neurology with its multiple sclerosis drug Gilenya (fingolimod) and the more recently approved Aimovig (erenumab).

With the acquisition of Cambridge, Massachusetts-based Cadent, Novartis gains rights to a portfolio of neurology drugs.

This includes CAD-9303, a NMDAr positive allosteric modulator that could be used to treat schizophrenia, and MIJ-821, a NMDAr negative allosteric modulator for depression that was licensed to Novartis in 2015.

MIJ-821 is already in phase 2 development for treatment-resistant depression in a trial overseen by Novartis and the acquisition includes a buyout of milestones payments and royalties for the drug.

Gopi Shanker, the interim co-head of neuroscience at the Novartis Institutes for BioMedical Research (NIBR), added: “There is good evidence, both from human genetics as well as clinical studies, that NMDA receptors, which regulate learning, memory and plasticity in the brain function sub-optimally in schizophrenia.

“By modulating the activity of these receptors, we think CAD-9303 could potentially treat negative and cognitive symptoms and help address one of the key gaps in schizophrenia care.”

Additionally, Novartis will gain full rights to CAD-1883, a clinical stage SK channel positive allosteric modulator in development for movement disorders.

Cadent, which launched in 2017 through the merger of Luc Therapeutics and Ataxion Therapeutics, will receive $210 million up front, and up to $560 million in milestone payments.

No other financial details were disclosed.

Cadent said that its pipeline of drugs could also be used to treat indications such as movement disorders.

The transaction has been approved by the board of directors and stockholders of Cadent Therapeutics. Cadent and Novartis expect the transaction will close during the first quarter of 2021.

Closing of the transaction is subject to customary closing conditions, including antitrust review under us antitrust laws.

Investors in Cadent include Atlas Venture, Cowen Healthcare Investments, Qiming Venture Partners, Access Industries, Clal Biotechnology Industries, Novartis Corporate and Slater Technology Fund.

 

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VC Insider Chris Booker: There’s Definitely More Capital Moving Toward Home-Based Care

The degree to which venture capitalists were interested in at-home care may have been overplayed at one point. But that’s becoming less and less the case.

That’s according to Chris Booker, a partner at the Nashville, Tennessee-based venture capital firm Frist Cressey Ventures, which has itself frequently invested in the at-home care space.

“From a home health perspective, the market connects with COVID, because now everything is moving into the home,” Booker said during the Home Health Care News Capital+Strategy event earlier this month. “Really, health care is just moving into the home, [in general]. And so that’s what we’re seeing, in particular on the venture side.”

Frist Cressey Ventures is a VC fund focused on accelerating the growth of high-potential health care enterprises through value-added partnerships. It invests in technology and service businesses that provide solutions for higher quality of care, system integration, patient outcomes, population health and well-being.

Its portfolio includes companies like CareBridge, Aspire Health and Ready, a home-based care startup that coordinates a team of “Ready Responders,” individuals trained as EMTs, paramedics and nurses.

“So there’s definitely a lot more venture capital moving in this direction,” Booker said. “But what we’re seeing is it being more earlier-stage venture capital, in the markets that aren’t as mature.”

Those less mature markets include areas that have really exploded during the public health emergency: home-based primary care, home-based urgent care and hospital-at-home models.

In those areas, regulation has not yet caught up to the market. Reimbursement and logistics can be a struggle at the outset, but firms like Frist Cressey Ventures are willing to take on some of that risk when investing in companies that are moving toward more home-based and innovative futures.

Palliative care, for instance, was gaining popularity years back in a way that those new models are now.

William Frist, a former U.S. senator and one of the founders of Frist Cressey, started Aspire Health in 2013. Aspire then became the largest palliative care provider in the U.S. before it was acquired by Anthem (NYSE: ANTM) in 2018.

Alongside Brad Smith, the current leader of the Centers for Medicare & Medicaid Services’ Innovation Center, Frist capitalized off of one of those less mature markets.

The firm sees the same potential in the new models that have picked up traction during the COVID-19 crisis.

“We’re also seeing some things go into the home that I never in my career thought we would see,” Booker said. “Surgeries, for example, or mobile anaesthesia. … So from a venture standpoint, instead of just your traditional health models, we’re looking at some of these newer models that are going to be delivered to the home that you can kind of [count] as home health.”

Some of the home-based companies that have garnered attention from venture capitalists recently are Papa, the senior companionship on-demand startup; DispatchHealth, an urgent medical care provider; and, again, Ready, which announced a $54 million Series C round in September.

DispatchHealth also has launched a hospital-at-home model, joining other companies such as BayCare and Lifesprk, which have either launched hospital-at-home programs on their own or facilitated them in the last year.

“People are looking to take risks,” Booker said. “And they realize that some of the services that can be offered now are really able to lower the overall cost of care.”

VCs won’t be the only players looking into home-based care either. Hospitals will also be trying to find ways into the home, with individuals shying away from institutional-based settings, Booker said.

“One of my predictions for the next year is that you’re going to see a atypical investors, like large hospital systems, starting to acquiring some of these assets to build the kind of hospital-health care future of the model, which is the hospital and home health kind of merging into one,” he said.

The post VC Insider Chris Booker: There’s Definitely More Capital Moving Toward Home-Based Care appeared first on Home Health Care News.

Lilly pays up to $1.04bn for neurology gene therapy biotech Prevail

Eli Lilly has acquired Prevail, a biotech focusing on gene therapies for neurodegenerative diseases including Parkinson’s, in a deal potentially worth more than $1 billion.

The big US pharma is to pay up to $1.04 billion to buy Prevail, paying $22.5 per share up front plus a $4 contingent value right (CVR) to sweeten the deal.

The CVR pays out if one of Prevail’s gene therapies is approved in one of several developed countries before December 31, 2024.

Prevail is working on gene therapies based on adeno-associated virus 9 (AAV9) technology, which must be approved in any of the group of countries comprising the US, Japan, UK, Germany, France, Italy, or Spain.

Lilly pointed out that there can be no assurance of payouts from the CVR – something that shareholders in other companies have found out the hard way.

Sanofi last year settled with holders of a CVR dating back to the French pharma’s acquisition of Genzyme that was contingent on MS drug Lemtrada achieving several goals – cash that never materialised.

And former Celgene shareholders are currently sweating over a CVR relating to three cancer drugs that looks increasingly unlikely to pay out because of delays with FDA reviews.

The acquisition is set to close in the first quarter of 2021 and will see several gene therapies added to the company’s pipeline.

Top of the list is PR001, a potentially disease-modifying single-dose gene therapy for Parkinson’s disease with GBA1 mutations (PD-GBA) and the rare condition neuronopathic Gaucher disease (nGD) that is injected into a gap at the base of the brain stem.

The phase 1/2 PROPEL clinical trial in PD-GBA is ongoing and the phase 1/2 PROVIDE trial in nGD has been granted Fast Track Designation in these indications.

Also in the pipeline is PR006 for patients with frontotemporal dementia with GRN mutations (FTD-GRN), also delivered by an injection in the same place.

This is being tested in the phase 1/2 PROCLAIM trial, where the first patient was dosed earlier this month.

Prevail is also developing PR004 for neurodegenerative diseases associated by the abnormal accumulation of alpha-synuclein protein in neurons, nerve fibres or glial cells.

It is also working on therapies for Alzheimer’s and amyotrophic lateral sclerosis (ALS).

Lilly’s CEO David Ricks is pursuing a policy of “bolt-on” acquisitions to add to the company’s pipeline, and scooped up dermatology specialist Dermira in a similar-sized deal at the beginning of the year.

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Lilly to Acquire Prevail Therapeutics for ~$1.04B

Shots:

  • Lilly to acquire Prevail for $22.50/ share in cash (~ $880M) payable at closing plus one non-tradable CVR worth up to $4.00/ share in cash (~160M), making a total of $26.50/share in cash (~$1.040B). The transaction is expected to be close in Q1’21
  • The CVR is payable upon the first regulatory approval of a product from Prevail’s pipeline either in the US or any other country including Japan, UK, Germany, France, Italy or Spain. If approval occurs after Dec 31, 2024, the value of the CVR will be reduced by ~8.3% /month until Dec 1, 2028 (at which point the CVR will expire)
  • The acquisition will establish a new modality at Lilly, extending its research in gene therapy program, anchored via Prevail’s pre/clinical neuroscience asset

Click here ­to­ read full press release/ article | Ref: Lilly | Image: BusinessWire

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Brookdale Senior Living Reportedly Exploring Sale of Home Health and Hospice Businesses

After falling short on Q3 projections and seeing revenue dip year over year, Brookdale Senior Living (NYSE: BKD) is reportedly considering divesting its home health and hospice segments.

COVID-19’s impact on the company has created financial pressures that it hopes to mitigate, PEHub Reported Monday. Those pressures could feasibly be made up, in part, through a home health and hospice business sale when valuations remain at jaw-dropping highs.

The Brentwood, Tennessee-based aging services operator — which offers home health, hospice and outpatient therapy services to over 17,000 patients nationwide — is reportedly being provided with guidance by Bank of America and exploring various options. Those options include finding a private equity buyer, a pure-play strategy buyer or even a combination of the two, according to PEHub.

The company declined to comment on the rumor when contacted by Home Health Care News, citing a standing policy not to engage in dealmaking speculation.

Brookdale is a leading operator of senior living communities in the U.S. The company operates and manages independent living, assisted living, memory care and continuing care retirement communities (CCRCs), totaling 726 communities spanning 44 states.

Overall, Brookdale’s total revenue totaled $706 million in Q3 2020, down 13.3% compared to $815 million in Q3 2019. The company estimated that $71 million was lost in revenue in Q3 due to COVID-19.

Likewise, its home health revenues had been down. In 2019, home health accounted for $327 million in revenue for Brookdale. Through Q3 of 2020, revenues had not yet hit $185 million.

Still, its home health and hospice business was strong enough to begin considering this sort of move. Brookdale is the largest senior living provider in the United States and also the sixth-largest home health provider, data from LexisNexis suggests.

“Brookdale has significant assets, [including] owned real estate, home health and hospice business,” investment banking company Jefferies wrote in a note after Brookdale’s Q3 earnings call. “Those are able to be monetized and could unlock shareholder value.”

But total home health revenue in Q3 2020 was just over $61 million, which was down 23.6% compared to Q3 2019. Its average daily census went from 15,357 in Q3 2019 to 13,146 in over the same time period this year.

In the same note, Jefferies also commented that “monetizing the [home health and hospice] assets would be an effective strategic decision” to counteract the cash burn due to COVID-19.

Brookdale isn’t alone, if the rumored reports hold true.

Encompass Health Corp. (NYSE: EHC) — the fourth-largest home health provider in the U.S., according to LexisNexis — announced last week that it was “exploring strategic alternatives” for its home health and hospice business.

Birmingham, Alabama-based Enccompass Health’s home health and hospice segments brought in $274.5 million in revenue over Q3 2020 and over $1 billion in all of 2019, according to company financial filings. Overall, its U.S. footprint includes 242 home health locations and 83 hospice locations.

“The strategy in terms of building a coordinated post-acute care provider — that is, with IRF, home health and hospice — I think has actually been successful,” William Blair analyst Matt Larew said during HHCN’s Capital+Strategy event. “I think Encompass Health has done a really nice job.”

Brookdale hasn’t gone public with any of its strategies yet, and there’s likely going to be some hurdles, if a sale is the goal.

For one, Brookdale’s home health and hospice line is tied to its senior living side of the business, and its revenues are affected by that built-in relationship.

The company has also been the beneficiary of over $100 million in federal and state relief since the beginning of the public health emergency, including a whopping $67.5 million from the U.S. Department of Health and Human Services (HHS) via the Provider Relief Fund.

Monday isn’t the first time rumors have swirled around a sale of Brookdale’s home health and hospice operations. In May 2019, Stephens analyst Dana Hambly also suggested a sale could make sense due to the demand for quality in-home care assets.

“Given the valuations in the home health and hospice industries, we believe Brookdale has explored strategic alternatives for the health care services segment,” Hambly told HHCN at the time. “With the home health business seemingly on the upswing and the steady growth in the hospice business, this is now a more attractive asset than it was 12 months ago.”

While home health has been an up-and-down business for Brookdale, the company’s hospice operations have consistently performed well.

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AstraZeneca to Acquire Alexion for $39B

Shots:

  • Alexion to receive $60M in cash and 2.1243 ADSs (each ADS represents ½ ordinary share of AstraZeneca) for each Alexion share. The deal values Alexion at $175/ share with a 45% premium to the closing price on Dec 11, 2020
  • Alexion will own ~15% of the combined company. The acquisition will bolster AstraZeneca’s footprints in rare disease and enhance its presence in immunology
  • The duo will work together to build Alexion’s pipeline of 11 molecules across 20+ clinical- programs in rare diseases and beyond. The new company will lead to a WW expansion of Alexion’s portfolio and is expected to deliver double-digit average annual revenue growth through 2025

Click here ­to­ read full press release/ article | Ref: Businesswire | Image: San Diego Business Attorney

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The Care Team Expands Footprint with InTeliCare Purchase; CareFinders Buys Union Home Care

The Care Team acquires InTeliCare

Private equity-backed The Care Team has acquired InTeliCare Home Health & Hospice. The financial terms of the deal were not disclosed.

Farmington Hills, Michigan-based The Care Team is a home-based care provider that delivers a variety of services including nursing, therapy and hospice services across central and eastern Michigan. The Care Team is a portfolio company of the Denver-based PE firm Revelstoke Capital Partners.

InTeliCare Home Health & Hospice is a Michigan-based care provider that operates in Standish, Gaylord and Traverse City.

For The Care Team, the deal was an opportunity to join forces a company that closely aligns with its goals in terms of care delivery, Jason Laing, CEO and founder of The Care Team, said in a statement.

“The Care Team and InTeliCare share similar cultures and a strong commitment to patient care, clinical excellence and compliance,” Laing said. “We see a tremendous opportunity to combine the strengths and capabilities of both companies.”

The deal expands The Care Team’s footprint and places the company in a stronger position to negotiate with payers and referral partners moving forward.

“With the acquisition of InTeliCare, The Care Team will have the ability to treat patients across the entire lower peninsula of Michigan, which will allow us to be better partners to our payer and referral relationships,” Jonny Miller, vice president at Revelstoke, said in a statement.

CareFinders Total Care purchases Union Home Care

CareFinders Total Care has purchased Union Home Care, a Pennsylvania-based home care services provider.

Founded in 1995, Hackensack, New Jersey-based CareFinders provides in-home care services to more than 8,500 patients throughout New Jersey, Pennsylvania and Connecticut. It has 26 offices in total.

For CareFinders, the deal is another opportunity to expand its Pennsylvania footprint. Currently, the company has six offices in the state.

“Union Home Care is a high-growth, premier home health agency in the Philly market offering Medicaid personal care services,” CareFinders CEO Jim Robinson said in a press release. “This newest member of the CareFinders family of companies has an impeccable reputation for high-quality personalized care. With our expanded footprint in Philadelphia, this acquisition takes us one step closer to our goal of becoming the No. 1 home care services company in the Northeast.”

Both organizations align when it comes to values and an overall mission, Mila Mendel, the founder of Union Home Care, said in a statement.

“This is an exciting change that will benefit our clients, our caregivers and our health care partners, and I am excited to help lead this charge,” Mendel said.

Moving forward, Mendel will serve as the executive director of CareFinders’ Philadelphia division. She will also oversee growth plans in that market.

Home-focused health care organizations receive approval to merge

Florida health systems Empath Health and Stratum Health System have been granted formal approval to merge from their board of directors. The organizations’ originally announced plans to merge back in February.

Both organizations provide care in the home setting through their networks. Stratum Health System oversees and supports both Approved Home Health and Avidity Home Health, two agencies with multiple locations in southwest Florida.

Meanwhile, Empath Health offers home health care as a part of its wide-ranging services. The company also focuses on patients with advanced or chronic illnesses.

The merger will create the country’s largest not-for-profit health system, according to the two organizations. Combined, the enterprise will serve more than 6,000 patients daily.

In total, the organizations would have an estimated annual gross revenue of $300 million.

Empath Health and Stratum Health System will continue to operate under their current banners.

Additionally, Rafael Sciullo, president and CEO of Empath Health, will continue in this role. Jonathan Fleece, president and CEO of Stratum Health System, will serve as president.

“As the saying goes, bigger does not automatically make you better,” Sciullo said in a press release. “It is what we do with that opportunity that will allow us to create meaningful change while continuing to excel at doing what we do best, … providing compassionate care to our patients and their families.”

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Alexion finally has a buyer – and it’s AstraZeneca with $39bn on the table

Alexion has routinely featured among lists of top biopharma takeover prospects in the last couple of years, and that was a good call – AstraZeneca has just swooped in with $39 billion cash-and-stock takeover offer.

The deal – the largest in the pharma sector since the start of the pandemic – bolsters AZ’s immunology franchise with $4 billion blockbuster Soliris (eculizumab) and longer acting follow-up Ultomiris (ravulizumab), plus a pipeline of 11 drugs for rare and autoimmune diseases.

The transaction values Alexion at $175 per share, a sizeable 45% premium on its closing price on Friday, the day before the deal was announced.

Alexion shareholders will receive $60 in cash, plus 2.12 of AZ’s US-listed shares for each share they hold, ending up owning around 15% of the combined company.

Analysts at SVB Leerink said that while the offer is fair at that price, Alexion is a “scarce and high-quality asset,” which could prompt an offer from another company. In the past, Novartis, Roche, Pfizer and Amgen have all been mentioned as potential suitors.

It marks something a departure from AZ’s relentless focus on deal-making in oncology, its top product category, and also comes as Alexion has been locked in a battle with activist shareholders pushing for a sale.

Boston, US-based Alexion spent a lot of 2019 arguing the merits of remaining independent, saying that while Soliris is approaching the end of its patent life – with heavyweight competitors like Amgen already eyeing the biosimilar market for the drug – Ultomiris and its pipeline could help drives sales to $9 to $10 billion in 2025.

The threat of biosimilar competition to its cash cow has weakened Alexion’s share price, providing an opportunity for AZ, which has been rumoured to be angling for a large acquisition for several months.

While the first biosimilars to Soliris have already reached the market in some countries like Russia, Alexion cut a settlement deal with Amgen in the summer that prevents the latter’s biosimilar version of Soliris from entering the US market until 2025, avoiding a near-term cash cliff.

In the meantime, Ultomiris has been gathering momentum, fuelled by intravenous dosing every eight weeks, rather than every two weeks with Soliris. It racked up $340 million in sales last year, and added another $763 million in the first nine months of this year, backing up its blockbuster credentials.

Soliris was the first drug to become available for each of its approved indications: paroxysmal nocturnal hemoglobinuria (PNH), atypical haemolytic uraemic syndrome (aHUS), and neuromyelitis optica spectrum disorder (NMOSD).

Ultomiris is already approved for PNH and aHUS and in late-stage development for NMOSD, which could lend further momentum.

Meanwhile, AZ will also picks up three other drugs – Strensiq (asfotase alfa) for hypophosphatasia, Kanuma (sebelipase alfa) for lysosomal acid lipase deficiency (LAL-D) and anticoagulant reversal agent Andexxa (andexanet alfa) – that collectively brought in almost $675 million in the first nine months of 2020.

AZ is taking on debt to fund the deal but should pay that off quickly given Alexion should book double-digit growth in the coming years, which could be enhanced by AZ’s broader footprint in Europe and Asia.

Alexion has been working hard to flesh out is pipeline as well, snapping up Achillion Pharma, Syntimmune, Wilson Therapeutics and Portola and forging an alliance with gene-silencing specialist Dicerna focusing on complement diseases.

Along with  new indications for its existing drugs, the Swiss biopharma has four more drugs in phase 3 development that could benefit from the increased financial and development muscle that AZ will bring to the table.

That includes ALXN1840 for genetic disorder Wilson disease, with results due in the first half of next year, as well as CAEL-101 for light chain amyloidosis, AG10 for ATTR cardiomyopathy and ALXN2040 or PNH patients with extravascular haemolysis (EVH).

“Alexion has established itself as a leader in complement biology, bringing life-changing benefits to patients with rare diseases,” said AZ’s chief executive Pascal Soriot.

“This acquisition allows us to enhance our presence in immunology,” he added. “We look forward to welcoming our new colleagues at Alexion so that we can together build on our combined expertise in immunology and precision medicines to drive innovation that delivers life-changing medicines for more patients.”

The combined company will be able to carve around $500 million a year off its cost base, and will deliver double-digit growth average annual revenue growth through 2025, providing cash flow to reinvest in R&D, said the two companies in a statement.

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Alexion finally has a buyer – and it’s AstraZeneca with $39bn on the table

Alexion has routinely featured among lists of top biopharma takeover prospects in the last couple of years, and that was a good call – AstraZeneca has just swooped in with $39 billion cash-and-stock takeover offer.

The deal – the largest in the pharma sector since the start of the pandemic – bolsters AZ’s immunology franchise with $4 billion blockbuster Soliris (eculizumab) and longer acting follow-up Ultomiris (ravulizumab), plus a pipeline of 11 drugs for rare and autoimmune diseases.

The transaction values Alexion at $175 per share, a sizeable 45% premium on its closing price on Friday, the day before the deal was announced.

Alexion shareholders will receive $60 in cash, plus 2.12 of AZ’s US-listed shares for each share they hold, ending up owning around 15% of the combined company.

Analysts at SVB Leerink said that while the offer is fair at that price, Alexion is a “scarce and high-quality asset,” which could prompt an offer from another company. In the past, Novartis, Roche, Pfizer and Amgen have all been mentioned as potential suitors.

It marks something a departure from AZ’s relentless focus on deal-making in oncology, its top product category, and also comes as Alexion has been locked in a battle with activist shareholders pushing for a sale.

Boston, US-based Alexion spent a lot of 2019 arguing the merits of remaining independent, saying that while Soliris is approaching the end of its patent life – with heavyweight competitors like Amgen already eyeing the biosimilar market for the drug – Ultomiris and its pipeline could help drives sales to $9 to $10 billion in 2025.

The threat of biosimilar competition to its cash cow has weakened Alexion’s share price, providing an opportunity for AZ, which has been rumoured to be angling for a large acquisition for several months.

While the first biosimilars to Soliris have already reached the market in some countries like Russia, Alexion cut a settlement deal with Amgen in the summer that prevents the latter’s biosimilar version of Soliris from entering the US market until 2025, avoiding a near-term cash cliff.

In the meantime, Ultomiris has been gathering momentum, fuelled by intravenous dosing every eight weeks, rather than every two weeks with Soliris. It racked up $340 million in sales last year, and added another $763 million in the first nine months of this year, backing up its blockbuster credentials.

Soliris was the first drug to become available for each of its approved indications: paroxysmal nocturnal hemoglobinuria (PNH), atypical haemolytic uraemic syndrome (aHUS), and neuromyelitis optica spectrum disorder (NMOSD).

Ultomiris is already approved for PNH and aHUS and in late-stage development for NMOSD, which could lend further momentum.

Meanwhile, AZ will also picks up three other drugs – Strensiq (asfotase alfa) for hypophosphatasia, Kanuma (sebelipase alfa) for lysosomal acid lipase deficiency (LAL-D) and anticoagulant reversal agent Andexxa (andexanet alfa) – that collectively brought in almost $675 million in the first nine months of 2020.

AZ is taking on debt to fund the deal but should pay that off quickly given Alexion should book double-digit growth in the coming years, which could be enhanced by AZ’s broader footprint in Europe and Asia.

Alexion has been working hard to flesh out is pipeline as well, snapping up Achillion Pharma, Syntimmune, Wilson Therapeutics and Portola and forging an alliance with gene-silencing specialist Dicerna focusing on complement diseases.

Along with  new indications for its existing drugs, the Swiss biopharma has four more drugs in phase 3 development that could benefit from the increased financial and development muscle that AZ will bring to the table.

That includes ALXN1840 for genetic disorder Wilson disease, with results due in the first half of next year, as well as CAEL-101 for light chain amyloidosis, AG10 for ATTR cardiomyopathy and ALXN2040 or PNH patients with extravascular haemolysis (EVH).

“Alexion has established itself as a leader in complement biology, bringing life-changing benefits to patients with rare diseases,” said AZ’s chief executive Pascal Soriot.

“This acquisition allows us to enhance our presence in immunology,” he added. “We look forward to welcoming our new colleagues at Alexion so that we can together build on our combined expertise in immunology and precision medicines to drive innovation that delivers life-changing medicines for more patients.”

The combined company will be able to carve around $500 million a year off its cost base, and will deliver double-digit growth average annual revenue growth through 2025, providing cash flow to reinvest in R&D, said the two companies in a statement.

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ERT to merge with clinical imaging firm Bioclinica

ERT, a clinical services firm with expertise in digital technology is to merge with clinical imaging firm Bioclinica.

The companies said that the combination will strengthen their offering to pharmaceutical and biotech companies.

The transaction will integrate Bioclinica’s expertise in imaging with ERT’s expertise in electronic clinical outcome assessment, cardiac safety, respiratory and wearables.

The combined company will deliver data analytics, insights, business intelligence, virtual patient visits and hybrid technological solutions.

No financial details were disclosed but the transaction is subject to customary closing conditions, including approval by regulatory agencies. ERT and Bioclinica expect the transaction to close next year.

The acquisition follows the appointment of Joe Eazor as president and CEO of ERT in October, replacing Jim Corrigan who is moving on after seven years in charge.

Eazor said: “As our customers continue to transform their R&D operations, we must continuously deliver a breadth of innovative technology and services.

“Our merger with Bioclinica will allow us to continue to reinvent end-point data collection by delivering higher-fidelity data and more integrated solutions to achieve our customers’ goals for higher effectiveness, greater efficiency, safer trials, and more patient-centric virtual solutions.”

Speaking to pharmaphorum, he said these transformations include a greater focus on how to run strong virtual and remote trials while at the same time delivering a better patient experience.

“People are realising now just how effective remote trials can be – and that they have great benefits for patients in helping them participate in studies.

“I don’t believe we’ll ever completely go back to the way things were; trials will become increasingly virtual over the next few years.”

But Eazor added that the merger was not driven by COVID trends but by the new opportunities open to a combined company.

“Our interest in Bioclinica is in the ability to develop a broader and deeper set of capabilities, with both of us able to work on integrated, consistent solutions in a number of different areas. It’s a strong strategic rationale that goes beyond what’s happening with the pandemic.

“The most exciting aspect is that it will give us sizable scale capabilities to invest in ways we wouldn’t have been able to accomplish as two separate companies.”

Joe Eazor will be the CEO of the newly merged company and the management team will be composed of a combination of both ERT and Bioclinica executives.

In June ERT acquired ADPM Wearable Technologies amid a growing interest in using wearable sensors and handheld devices to collect clinical data during the pandemic.

The logic behind that acquisition is to improve data collection in neurological diseases such as Parkinson’s disease, Multiple Sclerosis and Ataxia.

Data collection using conventional methods relies on episodic visits making trials extremely expensive.

Using wearables technology such as that developed by ADPM could provide precise motion data and allow companies to use novel clinical endpoints.

2020 has been comparatively quiet for mergers in the clinical services sector as contract research organisations busied themselves supporting research into COVID-19 therapies and vaccines.

Genesis Drug Discovery and Development, a member of the Genesis Biotechnology Group bought California’s Comparative Biosciences in August.

 

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Gilead to Acquire MYR for ~$1.4B

Shots:

  • Gilead to acquire MYR for ~$1.4B in the all-cash transaction along with ~$364.73M as a milestone upon the US FDA’s approval of Hepcludex (bulevirtide)
  • The acquisition will provide Gilead with Hepcludex which has received EMA’s conditional approval for chronic HDV infection in adults with compensated liver disease in Jul’2020. MYR anticipates the submission for accelerated approval to the US FDA based on P-II MYR203 study in H2’21
  • Hepcludex (SC) blocks the NTCP receptor on the surface of hepatocytes & prevents the entry of HBV/HDV into hepatocytes & viral spread within the liver and has received the US FDA’s & EMA’s ODD for HDV

Click here ­to­ read full press release/ article | Ref: Gilead | Image: New Indian Express

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Boehringer Ingelheim to Acquires NBE-Therapeutics ~ $1.5B

Shots:

  • Boehringer Ingelheim to acquire all shares of NBE-Therapeutics for ~$1.434B which include contingent clinical and regulatory milestones. The transaction is expected to be closed in Q1’21
  • The acquisition will add NBE-Therapeutics’ ROR1-directed ADCs including NBE-002 which is currently in P-I studies for TNBC and other solid tumors
  • NBE-Therapeutics’ iADC platform will add exceptional tumor-targeting capabilities to Boehringer Ingelheim’s oncology portfolio. The deal comes one month after Merck’s $2.8B acquisition of VelosBio for its anti-ROR1 ADC

Click here ­to­ read full press release/ article | Ref: Boehringer Ingelheim | Image: Business Wire

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Boehringer buys NBE for €1.18bn, adding cancer ADC expertise

Boehringer Ingelheim has expanded its oncology focus for the second time this week by buying Swiss biotech NBE-Therapeutics, adding an antibody-drug conjugate (ADC) platform led by a drug for a hard-to-treat form of breast cancer.

The German pharma group is paying €1.18 billion ($1.43bn) for all the shares in privately-held NBE, based in Basel, and says the biotech will remain at its current location and operate as a new site within its R&D network.

Terms of the deal haven’t been disclosed, but some of the headline value is tied to clinical and regulatory milestones.

NBE’s lead therapeutic NBE-002is in phase 1 testing for triple-negative breast cancer (TNBC), so called because it lacks the biomarkers that other targeted therapies can latch on to. TNBC is more aggressive than other types of breast cancer, accounting for 15-20% of cases but causing 25% of deaths.

All the Swiss company’s other development programmes are currently at the preclinical stage.

Boehringer started its push into oncology in the mid-2000s, and initially focused on small-molecule, targeted therapies for lung and gastrointestinal cancer, leading to commercial products like Giotrif (afatinib) and Vargatef (nintedanib).

In the last few years it has been progressively adding to its capabilities, for example buying oncolytic virus specialist ViraTherapeutics in 2018 and cancer vaccine player AMAL Therapeutics last year.

It also added antibody firm Northern Biologics earlier in 2020, and – just this week – immuno-oncology company Labor Dr. Merk & Kollegen, which specialises in cancer vaccines and oncolytic viruses.

NBE represents its first foray into the ADC category, which consists of antibodies targeting tumour-associated molecules that are linked to a cell-killing payload.

While they have been around for a couple of decades, the number of ADCs on the market remains low, but latterly the class has been gathering momentum in biopharma drug development as early issues with stability and toxicity have been ironed out.

Just this year, the FDA approved the first ADC for TNBC – Immunomedics’ Trodelvy (sacituzumab govitecan) – although that targets a different molecular target than NBE’s candidate. Trodelvy is directed against Trop2, while NBE-002 targets ROR1, which along with TNBC is also seen in lung adenocarcinomas.

Boehringer’s head of innovation Michael Pairet said that NBE provides the drugmaker with “exceptional” tumour-targeting capabilities that sits well alongside its own immune cell-targeting platforms.

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Boehringer Ingelheim to Acquires Labor Dr. Merk & Kollegen for Boosting its Next Generation Cancer Immunology Program

Shots:

  • The acquisition will enable Boehringer Ingelheim to expand and accelerate its comprehensive program for the development of ATMP-based immuno-oncology therapies including the VSV with modified GP platform and cancer vaccines platforms
  • The addition of Labor Dr. Merk & Kollegen’s site will enable Boehringer Ingelheim to further strengthen its oncolytic virus and cancer vaccine development capabilities
  • Boehringer Ingelheim focuses to accelerate the delivery of first-in-class immuno-oncology therapies to patients across the globe

Click here ­to­ read full press release/ article | Ref: Businesswire | Image: Labor Merk

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Encompass Health Exploring ‘Strategic Alternatives’ for Home Health, Hospice Segment

There may soon be a major shakeup of the home health and hospice markets.

Encompass Health Corp. (NYSE: EHC) announced Tuesday it is “exploring strategic alternatives” for its home health and hospice business, which brought in total segment revenue of $274.5 million in the third quarter of 2020 and $1.09 billion in all of 2019, according to company financial filings.

The Birmingham, Alabama-based Encompass Health currently ranks as the fourth-largest home health provider in the nation, LexisNexis data suggests. Overall, its U.S. footprint includes 242 home health locations and 83 hospice locations.

“Since joining together with Encompass Home Health and Hospice in 2015, we have generated substantial growth in both our business segments, and we continue to deliver high-quality, cost-effective, integrated care to a growing number of our patients,” President and CEO Mark Tarr said in a statement.

The company is considering “a range of options” for its home health and hospice business, including a full or partial separation from Encompass Health through an initial public offering, spin-off, merger, sale or other transaction.

Tuesday’s news has apparently been in the works for a while, as Encompass Health’s board of directors has been evaluating an array of alternative strategies and structures for some time. The board has elected to make an official announcement as it proceeds with a more formalized process, the company noted.

No timetable has been established for the completion of the strategic review. Encompass Health does not intend to disclose further developments with respect to its strategic review process.

“Our primary focus this year has been to ensure Encompass Health’s best possible response to this unprecedented global pandemic,” Lee Higdon, chairman of the company’s board of directors, said. “This notwithstanding, the U.S. health care delivery system continues to change, and we believe the time is appropriate for us to further reassess the corporate structure that may optimize the strategic positioning and growth of our businesses.”

This is a developing story. Please check back later for further updates.

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Elsevier Acquires Shadow Health

Shots:

  • Elsevier acquires Shadow Health to enhance its extensive portfolio and clinical practice offerings for HCPs during a time of continued growth in telehealth
  • Elsevier works with healthcare educators to prepare students, nursing and HCPs and provide innovative learning tools and analytics that improve educational outcomes and help prepare students for healthcare practice
  •  The acquisition follows the launch of Transition to Practice in the US, supporting new nurses to build skills & confidence as they transition from academia to professional clinical practice

Click here ­to­ read full press release/ article | Ref: PRNewswire | Image: Transtutors

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Looking to Improve Care Coordination, PointClickCare to Buy Collective Medical for Reported $650M

PointClickCare Technologies has reached an agreement to acquire Collective Medical. The deal is for nearly $650 million, according to Business Insider, which first reported the news on Tuesday.

Mississauga, Ontario-based PointClickCare is a cloud-based software vendor for more than 21,000 skilled nursing facilities, senior living communities and home health agencies. As a company, PointClickCare’s solutions help providers optimize financial performance, retain staff and gain insights needed to manage risk.

Meanwhile, Collective Medical is a Cottonwood Heights, Utah-based company that delivers a nationwide network for care collaboration, operating in 39 states. The company’s platform connects over 1,300 hospitals, ambulatory practices, long-term organizations, post-acute care providers and accountable care organizations (ACOs).

The deal has roots in a partnership between PointClickCare and Collective Medical that first began in 2019.

The original partnership resulted in the combination of Collective Medical’s care coordination tech and PointClickCare’s platform.

“Given the strong demand for the initial partnership and the expanded need for integrated care coordination solutions offered by both companies, we are excited to be able to bring these solutions together to benefit care teams, post-acute providers, hospitals and health plans across North America,” Mike Wessinger, founder and CEO of PointClickCare, told Home Health Care News in an email.

Once combined, the companies aim to improve care for seniors by connecting “disparate points of care.”

“The health care ecosystem is a mix of disconnected providers, systems, processes and data. Health care costs and risks are on the rise, patient care is inconsistent, and provider collaboration is ineffective,” Wessinger said. “Systems need to break down the data silos across community-based health care to create a connected care network, powered by insights with a commitment to value, outcomes and innovation, all in the name of patient centricity.”

Through the acquisition of Collective Medical, PointClickCare will become the largest combined acute and post-acute care network in North America, according to the company.

“We’ll be able to connect care teams, post-acute providers, hospitals and health plans with better real-time, deep insights about their patients, ultimately reducing administrative burdens and the high costs of complex care,” Wessinger said. “Our combined market share will allow us to provide these connections at scale.”

As an organization, Collective Medical’s platform and reach will bolster PointClickCare’s efforts to solve the gaps within complex care management and improve outcomes, according to Wessinger.

The purchase also addresses the need to build strong relationships with referral and payer partners.

“Together we are best positioned to support our customers to work with their partners across the care continuum,” Wessinger said.

Moving forward, Wessinger believes efficiency when it comes to care coordination and transitions will be more important than ever.

“As we face the second wave of COVID-19 infections, the health care industry as a whole is facing more pressure than ever to deliver repeatable, high-quality care in the most efficient way possible,” he said. “In order to address these multifaceted challenges, and combat nurse burnout, there needs to be a standard by which care is delivered and decisions are made.”

The acquisition is slated to be completed by the end of December 2020.

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Exactech Acquires Muvr and it’s Digital Health Tech for Orthopedic Practices

Shots:

  • Exactech has acquired intelligent patient wearables and digital communication solutions maker Muvr Labs to expand its Active Intelligence platform of smart technologies portfolio
  • The Muvr platform includes patient wearables, mobile device applications, and chatbot texting, allowing the surgeons to remotely monitor patient recovery
  • Exactech expects a pilot launch of the Muvr technology in early 2021, with a full release of the platform by the end of 2021. Additionally, the company plans to develop the technology to support shoulder and ankle replacement surgery

Click here ­to­ read full press release/ article | Ref: Businesswire | Image: Businesswire

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Richter Acquires Janssen’s Evra Transdermal Contraceptive Patch Assets for $263.5M

Shots:

  • Richter signed an asset purchase agreement with Janssen for Evra transdermal contraceptive patch assets outside the US. The total deal value is $263.5M
  • The companies also signed a transitional business license agreement and a series of other related agreements to run the business without interruption during the period required to transfer the marketing authorizations to Richter
  • The acquisition will strengthen Richter’s position in women’s healthcare and boost its existing female healthcare franchise globally. Evra (qw) is the first transdermal hormonal patch to be approved, as well as the first non-invasive form of birth control that, when used correctly, is 99% effective

Click here ­to­ read full press release/ article | Ref: Richter | Image: Richter

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Janssen adds Hemera’s AMD gene therapy to pipeline

Johnson & Johnson’s pharma unit Janssen has bought rights to an investigational gene therapy for a severe form age-related macular degeneration from specialist biotech Hemera Biosciences.

Financial details of the deal have not been disclosed and will add Hemera’s gene therapy HMR59 to Janssen’s pipeline of ophthalmology drugs.

The privately-held biotech has developed the gene therapy as a single shot to treat dry age-related macular degeneration, or dry AMD.

In the form of dry AMD known as geographic atrophy, dysregulation of the complement system can lead to the formation of a “membrane attack complex” that causes cells in the retina to die, leading to progressive loss of vision.

HMR59 is designed as a potential one-time treatment administered in an office setting that increases the ability of retina cells to produce a soluble form of CD59, called sCD59, that blocks the formation of the membrane attack complex and limits further damage to the retina.

It uses a modified adeno-associated virus to deliver the genetic material to the back of the eye.

Geographic atrophy affects five million people globally, and is a leading cause of blindness in people over 50 years of age.

The prevalence of geographic atrophy increases as the global population ages, with roughly one in 29 people over age 75 affected, and nearly one in four people over age 90. There are currently no available therapies other than vitamins and low vision aids.

The phase 1 study of HMR59 for patients with geographic atrophy is complete. A second phase 1 study exploring HMR59 in patients with wet-AMD is currently conducting follow-up visits to evaluate long-term safety.

Janssen established its eye disease portfolio in 2018 and is developing expertise and assets across a range of rare and common eye diseases, including achromatopsia and X-linked retinitis pigmentosa, age-related macular degeneration, diabetic retinopathy, and diabetic macular oedema.

Spark Therapeutics, which is now part of Roche, has shown that gene therapies can be converted into marketable ophthalmology drugs, after approval of Luxturna in 2017 for retinal degeneration caused by mutations in the gene RPE65.

 

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Janssen Acquires Rights to Hemera’s HMR59 for Late-Stage Age-Related Macular Degeneration

Shots:

  • Janssen acquires rights to Hemera’s HMR59, administered as a one-time, outpatient, IVT inj. to help preserve vision in patients with geographic atrophy
  • The acquisition will boost Janssen’s eye disease portfolio & strengthens its gene therapy capabilities
  • HMR59 is designed to increase the ability of retina cells to make a soluble form of CD59, helping to prevent further damage to the retina and preserve vision. The P-I study of the therapy for patients with geographic atrophy is completed while the P-I study exploring HMR59 in patients with wet-AMD is currently conducting follow-up visits to evaluate the long-term safety

Click here ­to­ read full press release/ article | Ref: PRNewswire | Image: GMP News

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AstraZeneca to Divest European Rights of Crestor (rosuvastatin) to Grünenthal for ~$350M

Shots:

  • Grünenthal to acquire EU rights (Ex- Spain and the UK) of Crestor & its associated brands for ~$350M and will take over bulk production and packaging by 2025. The deal is expected to be closed in Q1’21
  • The payments will be made in two tranches: $320M will be paid upon transaction closing and $30M as additional milestones
  • Crestor is a statin, a lipid-lowering agent used to treat blood-lipid disorders & to prevent CV events, such as heart attacks & strokes, and is approved as a lipid-regulating medicine in 100+ countries

Click here ­to­ read full press release/ article | Ref: PRNewswire | Image: Wikipedia

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Boston Scientific to Divest BTG’s Specialty Pharma Business for ~$800M

Shots:

  • Boston Scientific signs an agreement with Stark International and SERB SAS to sell its BTG specialty pharma business for $800M in cash. The transaction is expected to close in H1’21
  • The agreement includes the transfer of 5 facilities & ~280 employees globally. This transaction will help the BTG specialty pharma business enhance its potential as a fully integrated specialty pharmaceuticals platform
  • Boston Scientific acquired BTG for ~$3.7B in 2019. The divested products include life-saving antidotes used in hospitals & emergency care settings, including CroFab, DigiFab & Voraxaze

Click here ­to­ read full press release/ article | Ref: PRNewswire | Image: Barron’s

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AdaptHealth to Acquire AeroCare in $2B Deal

The home-based care provider landscape is rapidly changing, a point reflected in the industry-shaping mergers and multimillion-dollar deals that have taken place over the past couple of months.

But the home health supplier and equipment markets are undergoing a similar change, with the most recent business transaction announced on Tuesday.

In-home equipment supplier AdaptHealth Corp. (Nasdaq: AHCO) has entered into a definitive agreement to acquire AeroCare Holdings Inc., a technology-enabled respiratory and home medical equipment (HME) distribution platform.  AdaptHealth’s play for AeroCare values the company at approximately $2 billion. 

“Joining forces with AdaptHealth strengthens our combined ability to transform our industry and positively impact the lives of chronically ill patients across the country,” Steve Griggs, CEO of AeroCare, said in a statement.

Headquartered in Plymouth Meeting, Pennsylvania, the publicly traded AdaptHealth helps deliver home health equipment and medical supplies to patients in the home setting. Its offerings — often aimed at helping patients manage chronic conditions in the home — include equipment to treat diabetes, sleep disorders, respiratory illnesses and more.

AdaptHealth works with about 1.8 million patients annually in all 50 states, doing so across its network of 269 locations.

On its end, the Orlando, Florida-based AeroCare offers a suite of direct-to-patient equipment and services, including oxygen concentrators and home ventilators, along with CPAP and BiPAP machines.

Under terms of the agreement, AdaptHealth will pay $1.1 billion cash to AeroCare, with AeroCare also receiving 31 million shares of AdaptHealth common stock. AdaptHealth intends to fund the cash portion of the consideration and associated costs through incremental debt; it has committed debt financing from Jefferies Finance LLC, according to the company.

“This highly accretive transaction pairs up two industry leaders with similar strategies and strong execution track records of growth and profitability, technology innovation and patient service,” Luke McGee, CEO of AdaptHealth, said in a statement. “Our combined company will further enhance our geographic reach with a footprint in 47 of the 48 continental U.S. states, strengthening relationships with our referral partners, patients, manufacturers and managed health care plans.”

AeroCare is currently owned by private investors Peloton Equity, SkyKnight Capital, SV Health Investors and others.

Moving forward, the combined company will operate under the name AdaptHealth.

McGee and Griggs will jointly lead the company as co-CEOs.

In a Tuesday conference call, McGee said he has known the AeroCare leadership team for years, with the organizations having ongoing talks about potentially joining forces.

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AstraZeneca sells rights to cholesterol drug Crestor to Grunenthal

AstraZeneca is to sell European rights to its cholesterol drug Crestor (rosuvastatin) to Germany’s Grunenthal.

Crestor is a statin and at its peak generated annual revenues of more than $7 billion but it lost patent protection in the US four years ago and sales have tumbled.

Grunenthal will pay $320 million up front for rights to Crestor and associated medicines in over 30 countries in Europe, except for the UK and Spain.

The German pharma could also make milestone payments of up to $30 million and the deal is expected to be completed in the first quarter of 2021.

AZ will continue to manufacture and supply Crestor to Grunenthal during a transition period. AstraZeneca will also continue selling the medicine in other countries, including those in North America, Japan, China and other emerging markets.

AZ has a strategy of selling off its older drugs and reinvesting the proceeds in its research pipeline.

This has helped the company overcome one of the worst patent cliffs in the industry as Crestor and several other blockbusters encountered generic competition.

Income arising from the upfront and future payments will be reported in AstraZeneca’s financial statements within other operating income and expense.

The divestment will not impact the company’s financial guidance for 2020.

Ruud Dobber, executive vice president, BioPharmaceuticals Business Unit, said: “This agreement supports the management of our mature medicines to enable reinvestment into the pipeline and bringing new, innovative treatments to patients.

“Grunenthal previously acquired the rights to several established AstraZeneca medicines and is well placed to ensure continued access to Crestor for patients across Europe.”

Crestor is a lipid-lowering medicines and is used to treat blood disorders and to prevent cardiovascular events such as heart attacks and strokes.

It produces its lipid modifying effects in two ways: it blocks an enzyme in the liver causing the liver to make less cholesterol, and it increases the uptake and breakdown by the liver of cholesterol already in the blood.

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Dr. Reddy’s to Divest Select Anti-Allergy brands to Dr. Reddy’s in Russia and Other CIS Countries

Shots:

  • Dr. Reddy to acquire Glenmark’s brands Momat Rino (for Russia, Kazakhstan, and Uzbekistan), Momat Rino Advance (for Russia), Momat A (for Kazakhstan & Uzbekistan), Glenspray, and Glenspray Active (for Ukraine) along-with rights to the trademarks, dossiers, and patents for the mentioned territories
  • The acquired products will further strengthen Dr. Reddy’s presence in the anti-allergy segment in the countries
  • The divestiture of the Momat Rino brand and its extension complements Glenmark’s strategy to launch Ryaltris in Russia and CIS countries. The launch will strengthen Glenmark’s respiratory franchise in the territories

Click here ­to­ read full press release/ article | Ref: Businesswire | Image: Businesswire

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Selvita to Acquire Fidelta from Galapagos for ~$37M

Shots:

  • Selvita to acquire 100% of the outstanding shares in Fidelta for $37.08M + customary adjustments for net cash & working capital
  • The acquisition will expand Selvita’s integrated drug discovery services offering with the addition of Fidelta
  • Fidelta will be fully consolidated under Selvita Group & will continue to operate under the Fidelta name. Fidelta will continue to perform drug discovery services for Galapagos for the next five years

Click here ­to­ read full press release/ article | Ref: GlobeNewswire | Image: Fidelta

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Digital health player UpHealth swells with three-way merger

A merger involving two US digital health specialists and a blank cheque company has created a telemedicine player, called UpHealth, that is valued at more than $1.3 billion.

The three-way deal combines UpHealth – which provides patient care management, telemedicine and digital pharmacy services and gives its name to the new group – with CloudBreak, which provides a video consultation platform for doctors and patients.

The blank cheque company or ‘special purpose acquisition company’ (SPAC) that provides funding is GigCapital2, which raised $150 million in its public offering in June 2019.

The merger is expected to be completed in the first quarter of 2021, subject to the usual closing conditions. Once completed, UpHealth will continue to be listed on the NYSE but with a new ticker symbol (UPH).

The combined company will cover a broad swathe of the digital health landscape, bringing together population health software, telehealth services, digital pharmacy delivering compounded and manufactured medicines, and tech enabled behavioural health services for people with mental health and substance abuse issues.

It will have pro forma 2020 revenues of around $115 million, rising to $194 million next year, coming from established contracts with health providers, insurers and payors from all 50 states in the US as well as nine international markets, according to the prospectus for the merger.

The new UpHealth will have two co-chief executives – Al Gatmaitan and Ramesh Balakrishnan – with Chirinjeev Kathuria of UpHealth and Avi Katz of GigCapital2 serving as co-chairman.

The elements of its digital health portfolio included integrated care management unit Thrasys – whose SyntraNet health information exchange platform is used to organise patient health records and workflows.

Telehealth will be split into a US division – consisting mainly of CloudBreak – and an international division centred on Glocal Healthcare Systems that is operating in India, Southeast Asia, and Africa.

The digital pharmacy business will be provided by MedQuest, which is licensed in all 50 states and pre-packages and ships medicines direct to patients, serving a network of 13,000 providers.

Finally, behavioural health will be provided by two subsidiaries – TTC Healthcare and Behavioural Health Services – which provide both onsite and telehealth services.

The increased reliance on telemedicine services during the coronavirus pandemic has sparked a flurry of M&A and fundraising activity among providers trying to broaden and expand their businesses.

The largest by far was the $18.5 billion merger between Teladoc and Livongo to create a digital health giant with pro forma sales of $1.3 billion, which came shortly after Teladoc bought InTRouch Health for $600 million.

Other sizeable deals include Veritas Capital’s acquisition of the health and human services assets of DXC Technology for $5 billion, Align Technology’s buyout of digital dentistry specialist exocad for $417 million, and Google’s $100 million investment in telehealth player Amwell on the same day the Boston-based company announced its IPO.

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Merck to Acquire OncoImmune for $425M

Shots:

  • Merck to acquire all outstanding shares of Oncolmmune for $425 M in cash as an upfront. Additionally, Oncolmmune will receive sales-based and contingent payments on the achievement of the regulatory milestones
  • The acquisition will give Merck control of CD24Fc which showed improvement in an interim efficacy analysis of a P-III study for the treatment of patients with severe and critical COVID-19. The acquisition is expected to be closed by the end of 2020
  • Prior to the completion of the acquisition, OncoImmune will spin-out certain rights and assets unrelated to the CD24Fc program to a new entity owned by the existing shareholders. Merck will invest $50M in the new entity

Click here ­to­ read full press release/ article | Ref: BusinessWire | Image: San Diego Business Attorney

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Merck & Co adds COVID-19 drug to pipeline with OncoImmune buy

Merck & Co is to buy US biotech OncoImmune for at least $425m, adding a potential new therapy for COVID-19 to its pipeline.

The pharma company, known as MSD outside North America, will pay the money up front with OncoImmune shareholders receiving further undisclosed milestone payments if certain sales and regulatory goals are achieved.

What attracted Merck & Co’s attention were interim findings of a phase 3 study showing OncoImmune’s CD24c – also known as Saccovid – significantly cut recovery time or progression to death or respiratory failure in patients with severe or critical disease compared with placebo.

Data was based on findings from 203 patients, around 75% of planned population of the trial, which the privately-owned US biotech said is fully recruited.

The pre-specified interim efficacy and safety analyses were performed when 146 patients achieved clinical recovery from COVID-19, a milestone achieved with 203 enrolments.

The trial was opened in April this year and activated in 15 medical centres in the US.

It involved patients requiring oxygen support, including those requiring supplemental oxygen, high flow oxygen, and non-invasive ventilation.

They were randomly assigned into two arms receiving either SOC plus a single dose of Saccovid or standard of care plus placebo.

Saccovid is a first-in-class recombinant fusion protein that targets the innate immune system, which had originally been developed for prevention of graft versus host disease (GVHD) following stem cell transplants in patients with leukaemia.

It has been studied in GVHD in phase 2 clinical trials, and a pivotal phase 3 clinical trial has already begun in GVHD.

In COVID-19 research, Merck & Co is already collaborating with Ridgeback Biotherapeutics to develop an oral antiviral drug, which is in phase 2/3 development.

Merck & Co is also conducting clinical trials to evaluate two COVID-19 vaccine candidates: V590, being developed through a collaboration with IAVI, which utilizes a recombinant vesicular stomatitis vector, and V591 which uses a measles virus as a vector.

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M&A: Medsphere Systems Corporation Acquires Micro-Office Systems

M&A: Medsphere Systems Corporation Acquires Micro-Office Systems

What You Should Know:

– Medsphere acquires Micro-Office Systems (MOS),
developer of systems integration and communication tools. MOS will retain its
name and will serve as a division of Medsphere moving forward.


Medsphere Systems
Corporation 
today announced the acquisition
of Micro-Office Systems (MOS)
in a move that will even further enhance the value and usability of Medsphere’s
affordable healthcare IT solutions and services. With over 30 years of healthcare IT
experience, MOS focuses on creating the in-between technology that streamlines
the functionality of various platforms and applications to the benefit of
administrators, clinicians, and patients. The acquisition enhances Medsphere’s
platform with the integration of custom medical practice and healthcare IT solutions.

MOS Product Portfolio

The MOS product portfolio includes numerous interfaces to
improve communication and integration among solutions; system migration tools
and strategies to smooth and hasten the transition from one system to another;
and the Patient Communications Gateway, a comprehensive, modular system that
empowers healthcare organizations to effectively communicate with patients.

“The entire healthcare IT industry, with as many products as there are, has evolved to the point where the connective tissue is just about as important as the muscle and bone,” said Medsphere President and CEO Irv Lichtenwald. “Even when healthcare IT was in its relative infancy, Micro-Office Systems was improving communication among platforms and making localized systems work better for all users. This is a tremendous addition to Medsphere’s solution suite and we have every confidence that our clients will recognize and appreciate the enhanced performance MOS enables.”

Recent M&A Activity

The acquisition
of MOS is only Medsphere’s most recent move to expand company offerings. In
recent years Medsphere has added ambulatory healthcare IT solutions provider ChartLogic; healthcare IT consulting and
outsourcing provider Phoenix
Health Systems
; robust revenue cycle management systems developer Stockell
Healthcare, which now operates under the Medsphere banner; and the top-rated
Wellsoft emergency department information system.

As part of the acquisition, MOS will retain the Micro-Office
Systems name with the added modifier, “A Division of Medsphere.”

Doctors Making Housecalls CEO: COVID-19 Has Placed an ‘Exclamation Mark’ on House Call Services

Private equity-backed Eventus WholeHealth recently acquired Doctors Making Housecalls (DMHC), a home-based primary care provider. The deal further highlights the growing interest in home-based primary care seen throughout 2020.

Charlotte, North Carolina-based Eventus is a physician-led medical provider for residents and patients of skilled nursing and assisted living facilities. Aside from North Carolina, the company operates in Indiana, Ohio, Kentucky and South Carolina.

Founded in 2002, DMHC is a Durham, North Carolina-based provider that makes 160,000 visits annually to homes, assisted living communities and individual businesses. The company is a multi-specialty group of physicians, physician assistants and nurse practitioners.

Once merged, the two organizations will have over 550 clinicians and employees. The company will provide primary care, specialty care and behavioral health in long-term care facilities — and in the home.

Currently, the combined companies have 42,000 patients across the five markets.

Eventus CEO Dr. Grace Terrell saw an opportunity in the “house calls” model, especially in light of the COVID-19 emergency. The acquisition will help Eventus expand its delivery of care and help control patient populations wherever they reside.

“Our mission is that we are providing holistic care for medically vulnerable adults, and [this population] doesn’t all reside in skilled nursing or assisted living facilities. Some of them are in independent senior care facilities — and, of course, the vast majority live at home in private residences,” Terrell told Home Health Care News. “We were quite interested in this before the pandemic. But particularly with the pandemic, it’s become clear that the ability to provide care to patients in their homes … needs to be expanded.”

DMHC is one of the organizations that has truly honed in on the home-based primary care model, she added. One of the main reasons the company was an attractive acquisition target for Eventus was DMHC’s long-time reputation.

DMHC is one of 15 organizations that was chosen to participate in Medicare’s Independence at Home Demonstration Project.

Launched in 2019, Independence at Home is a CMS Innovation Center model that tests the effectiveness of delivering primary care services at home.

“Look at the Medicare Independence at Home Demonstration Project. They had some of the best results in the country, in terms of superior quality and lowering the cost of care and outcomes,” Terrell said. “They are in North Carolina, where we obviously also have a large presence. We see the type of care they provide firsthand.”

Another distinguishing characteristic of DMHC’s practice is the role the company plays as primary care providers, according to Dr. Alan Kronhaus, CEO of DMHC.

“We become the primary care clinician for our patients, as opposed to seeing them, for example, for a limited period of time in the ‘post-acute space,’” he told HHCN. “We get to know our patients very well. We form a close relationship with them and their family. I think that has been instrumental in our ability to be effective, both in providing clinically excellent services and in our ability to reduce the cost of care rather dramatically.”

Indeed, Kronhaus credits a focus on what he called the “pre-acute” space and providing proactive primary care for DMHC’s ability to lower costs.

“If you’re focused on the post-acute space, which so many … practices seem to be these days, the horse is already out of the barn,” he said. “The real key to reducing costs and providing great services is to provide, what I like to call, proactive primary care. This keeps people on an even keel and avoids crises, which reduces unnecessary ER visits and hospitalizations.”

The deal expands DMHC’s ability to provide crucial services to complex older patients on a broader scale — tripling the company’s capacity to promulgate their practice model, according to Kronhaus.

Additionally, the acquisition allows both companies to combine support resources and operate more efficiently.

Moving forward, Kronhaus thinks the public health emergency has put an “exclamation mark” on the benefits of DMHC’s services that keep people away from doctor’s offices.

“Whenever a patient goes to a waiting room with a lot of other sick people, … they’re obviously exposed to various pathogens and are at risk for nosocomial infections,” he said.

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Envision acquires commercial solutions firm Two Labs

Scientific communications company Envision Pharma has bought Two Labs, a firm specialising in commercial solutions for the pharma and biotech sector, for an undisclosed sum.

The combined company will bring together complementary clients, services, and technologies, extending Envision’s scientific footprint to new clients in the “product pre-launch setting” – while opening up new business avenues and geographies for Two Lab’s launch planning services.

Excellere Partners, a US-based private equity firm focused on partnering with entrepreneurs and management teams in emerging growth companies, will exit its investment in Two Labs following a four-year partnership.

Two Labs, founded in 2003 and headquartered in Powell, Ohio, has offices and operations across the US and UK, and is an established strategic consulting and marketing provider to the biopharma industry.

Two Labs helps pharmaceutical companies develop and execute customised launch strategies for products.

Envision’s acquisition of Two Labs follows the recent announcement of GHO Capital’s increased investment in the company and the backing of management for its continued global expansion.

Since being founded in 2001, Envision has delivered strong year-on-year organic growth and established leadership in medical affairs strategy, medical communications, and enterprise-wide Envision technology.

The acquisition followed an investment in Envision by specialist European fund Global Healthcare Opportunities (GHO) earlier this month.

The transaction sees GHO lead a consortium of its investors headed by Mubadala Investment Company, and including HarbourVest Partners and Northwestern Mutual to drive a new phase of growth, while Ardian exits its investment following a four-year partnership with Envision and GHO.

 

 

 

 

 

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AccentCare, Seasons Hospice to Merge

AccentCare Inc. and Seasons Hospice & Palliative Care are merging.

Dallas-based AccentCare — owned by global private equity firm Advent International — is among the five largest home health providers in the country, according to industry data. The Rosemont, Illinois-based Seasons holds the same distinction in the U.S. hospice market.

“Accentcare is doing very, very well,” Todd Stern, CEO of Seasons, told Home Health Care News. “Seasons was not out, determined to find a partner. This is a marriage of opportunity.”

Once finalized, the merger between AccentCare and Seasons will reshape the post-acute care market, with the combined entity being one of the deepest around in terms of geographic footprint and portfolio of services. The companies are expected to publicly announce their agreement late Monday, with financial terms of the deal not disclosed.

There are several advantages to the merger, AccentCare CEO Steve Rodgers told HHCN.

By teaming up, AccentCare and Seasons will be better equipped to serve patients and referral sources as individuals’ needs change, for example. The move is likewise “extremely complimentary,” with AccentCare’s home health footprint closely matching Seasons’ hospice footprint, especially in major metropolitan areas.

“This is incredibly complimentary to our own approach toward strategic markets and being very focused on working with large health systems,” Rodgers said. “Todd and I both have a focus on being in large urban marketplaces. If you just go down the list of cities where we have a very significant presence now, we’re in the top cities in the United States. We’re in Boston, Chicago, Dallas, Houston, San Francisco, Los Angeles, Denver — and the list goes on.”

AccentCare delivers home health, hospice, personal care and care management services to more than 145,000 patients and clients annually, doing so across more than 179 locations in 17 states. In addition to growing organically, the company has landed several strategic partnerships with payers and health systems over the past few years, with its latest being a sizable joint venture with Fairview Health Services in Minnesota.

Advent International acquired AccentCare in May 2019 from its former PE backer, Oak Hill Capital Partners.

“Advent is a world-class private equity organization,” Rodgers said. “They’ve been incredible partners of ours, both in continuing to shore up the base infrastructure in the organization over the last 16 months as well as in preparing us to faze into a very significant opportunity like this.”

Seasons Hospice & Palliative Care offers end-of-life care services to upwards of 30,000 patients a year. Its current operations span 19 states and 31 Medicare-certified programs, inclusive of 22 facility-based and freestanding in-patient centers.

“Together, we can deliver a superior patient and family experience, ultimately serving our continuum of care partners even better, many of which want multiple service lines and multiple forms of care,” Stern said. “Our ability to take multiple service lines in common markets and innovate with the collective expertise made this a marriage worth doing.”

The combined AccentCare-Seasons enterprise will operate over 225 sites of care across 26 states, employing nearly 30,000 workers. It will have over 60 total partnerships with health systems and physician practices, collectively providing care to more than 175,000 patients and families each year.

AccentCare and Seasons expect to finalize the merger before the end of 2020, pending regulatory approvals. While they wait for that to happen, leaders from both organizations have started to execute upon their integration strategy, which will likely require ample time and resources considering the transaction’s sheer size.

Rodgers will serve as CEO of the new AccentCare-Seasons enterprise, which will keep AccentCare’s current headquarters of Dallas.

Stern will lead the hospice department — operating out of Rosemont — once AccentCare’s hospice services are combined with Seasons’ existing operations. He will also serve as executive vice chair of the combined organization.

On a broader level, Monday’s news adds to what has been a red-hot stretch for post-acute care dealmaking, particularly for hospice assets, which have typically come with hefty price tags. Last week, for instance, Addus HomeCare Corporation (Nasdaq: ADUS) announced a $192 million acquisition of Queen City Hospice and its affiliate, Miracle City Hospice.

AccentCare looked at many of the hospice businesses that came on the market, Rodgers said. Its leadership team started talking with Seasons toward the end of last year, however, and a merger seemed to make perfect sense.

“Todd and I got to know each other over the course of the year,” he added. “I think we had a mutual respect for each other and our organizations. I think we started getting excited about what we could do together. As we got into the late summer and early fall, things started taking off for us.”

While both CEOs declined to comment on financial details, Rodgers noted that the combined company should have annual revenues somewhere in the range of Encompass Health Corporation (NYSE: EHC) and LHC Group Inc. (Nasdaq: LHCG), which were ranked as fourth- and third-largest home health providers in 2019 by LexisNexis Risk Solutions.

“Let’s just say we’ll be fast approaching that general size and breadth,” Rodgers said.

For context, Encompass Health’s home health and hospice segment reported $1.09 billion in net services revenues in 2019. LHC Group, meanwhile, recorded $2.08 billion in net services revenues last year.

Until the merger is completed, all patients will continue to have access to their same care routines and will continue to use their current insurance plans. Each organization will share updates with patients and partners before any changes taking place, Rodgers and Stern noted.

In addition to Fairview, AccentCare’s existing joint ventures include partnerships with Asante, a large health system based in Oregon. That list also includes relationships with Baylor Scott & White Health, UCLA Health and several others.

With more than 30 strategic partnerships, Seasons has similarly made a name for itself with health systems, hospitals and payers. Moving forward, the merger should only benefit those partnerships, according to Stern.

“The hope that this is only positive,” he added. “There are some customers in the continuum of care that want all services, right? And there are some that just want parts. For those that want parts, nothing will change. For those that want more, I think we have a lot of opportunity to offer more to existing customers and care partners on both sides of the care aisle.”

Subsidiaries covered in the agreement include Health Resource Solutions, home health provider in Illinois, Nebraska and Indiana with a patient census of about 2,500. Gareda, a personal care business in Illinois that serves about 4,500 clients a year, is also covered.

This is a developing story. Please check back shortly for additional updates.

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BD Acquires the Medical Business Assets of CUBEX

Shots:

  • The acquisition expands the BD’s medication management offerings into the care continuum space and provides deeper integration with EHRs
  • The Medical Business of CUBEX’s key offering is a cloud-based software supporting decentralized medication management and provides unique features specialized for pharmacists and nurses across the care continuum
  • With the acquisition, 40 CUBEX’s associates will join BD

Click here­ to­ read full press release/ article | Ref: PR Newswire | Image: PR Newswire

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UCB Acquires Handl Therapeutics to Augment its Gene Therapy Portfolio

Shots:

  • The acquisition will bolster UCB’s pipeline program, capabilities, and platforms in the gene therapy space. The Handl Therapeutics will continue to be based in Leuven, Belgium while working closely with UCB’s international research teams
  • In addition, the UCB collaborated with Lacerta to focus on CNS diseases, under which Lacera will lead research, preclinical activities, and the early manufacturing process development, while UCB will complete IND-enabling studies, manufacturing, and clinical development
  • The collaboration will allow UCB to access Lacerta’s expertise in AAV-based CNS targeted gene therapies, fortifying UCB’s ability to produce effective treatments for neurodegenerative diseases

Click here­ to­ read full press release/ article | Ref: PRNewswire | Image: The Pharma Letter

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‘The Clock Is Ticking’: What Addus’ $192M Hospice Deal Means for Home Health M&A

On last week’s Q3 earnings call, Addus HomeCare Corporation (Nasdaq: ADUS) effectively declared that its “short pause” on M&A activity was officially over. On Wednesday, the company put its money where its mouth is.

The Frisco, Texas-based provider announced it has signed an agreement to acquire Queen City Hospice and its affiliate, Miracle City Hospice, for a cash purchase price of $192 million.

Paired with the company’s executives’ comments on last week’s call, the acquisition is an early sign of Addus building out what it calls “a three-legged stool” in markets where it is already present. That stool is made up of personal care, home health and hospice services.

“We want to continue to look at the clinical side of our business, adding home health and hospice in markets,” Addus CEO Dirk Allison said on the earnings call. “Because we find that as we have all three legs of the stool, so to speak, that is something that our managed care providers and Medicaid providers … are very interested in.”

In Ohio, Addus already has eight home care locations. This massive deal will go a long way in completing that three-legged stool in the state.

Currently, Addus provides home care services to about 44,000 consumers through 214 locations across 25 states, as well as home health and hospice.

On its end, Queen City Hospice is a portfolio company of the private equity firm Stonehenge Partners. It operates in the major Ohio markets of Columbus, Dayton and Cincinnati — where it is based — and has annualized revenues of about $56 million. It serves an average daily census of about 900 patients across the state, and its 600 employees will also be added to Addus’ network.

The $192 million number represents $162.8 million of value, net of the present value of $29.2 million in estimated tax benefits, according to Addus. The Queen City Hospice acquisition, along with two other closed acquisitions in 2020, brings Addus’ total acquired annualized revenues to about $82 million.

Addus expects the transaction to be immediately accretive to its financial results. It will also likely be a stepping stone to more home health transactions in months to come.

“This proposed acquisition is aligned with our strategy of providing hospice and home health care in markets where we already have a significant personal care presence,” Allison said in a press release. “With this acquisition, Ohio becomes the second state where we have the capability to provide all three levels of home care.”

That other state is North Dakota. While Addus believes it’s unrealistic to have all three service lines bolstered in every state it operates in, it is looking at “four or five states” to complete that three-legged stool.

What’s next

Addus is already one of the leading providers of home care in the U.S., which makes its ambition to create three levels of care in its biggest markets all that more significant. In other words, one of the behemoths in home care is looking to become a comprehensive leader of home-based care.

“We have strategically maintained a strong capital structure, which allows us to pursue acquisition opportunities as they occur,” Allison said in a press release announcing yesterday’s news. “We are now fully engaged in the process of identifying and pursuing acquisition opportunities in each of our three operating segments.”

The company wants to get its clinical side up to about 25% of its business, Allison told Home Health Care News sister site Hospice News, meaning more acquisitions are on the way.

In Q3, for context, personal care services represented just over 85% of the company’s net service revenue, while hospice and home health represented around 12% and 2%, respectively.

“Down the road, we will look at other opportunities on the clinical side,” Allison said. “I would say in 2021, we’ll be really looking at home health opportunities. We’re thinking that after we get through some of the COVID environment, some of the smaller agencies may be looking to see what they want to do in the future — and we’ll certainly be looking at that. But I would say all three levels of care would both stay in our framework, as far as acquisitions.”

In 2021, other companies are likely to be pursuing similar strategies in a year that could be “record breaking” when it comes to M&A, Mark Kulik, the managing director of M&A advisory firm The Braff Group, told HHCN.

“Addus is certainly executing on its strategy very well … I think they’ve done a great job,” Kulik said. “And I believe other national companies are going after the same thing — being able to provide that total patient care on the continuum.”

The valuation for Queen City Hospice is “staggering” at $192 million, as Kulik put it, but that is likely a sign of a trend — particularly in hospice — moving forward.

“That’s all part of the synergies that they’re going to seek to attain once they get those three business lines working together,” Kulik said. “I think there’s a clock that’s ticking on the hospice side. Everyone on the health home health services spectrum is seeking hospice agencies right now.”

There are a finite amount of opportunities out there, and that’s why while Allison said Addus will be diligent and careful in its M&A searches. It will be opportunistic above all else.

“I think there’s an exercise here of being able to walk and chew gum at the same time,” Kulik said. “You’ve got to be opportunistic to find the quality home health providers of scale, while not not turning your attention 100% away from finding quality hospice providers of scale. … Once they’re gone, they’re gone.”

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UCB revs up its gene therapy drive with Handl acquisition

UCB has made a new foray into the gene therapy space, buying fellow Belgium-based company Handl to get control of its adeno-associated virus (AAV) capsid delivery platform and two research programmes in neurodegenerative diseases.

The mid-sized pharma group has also signed a collaboration with Florida, US-based Lacerta Therapeutics, adding more AAV capsids – well established as a staple for delivering gene therapy sequences – as well as another gene therapy candidate.

Like many other pharma companies, UCB has been building a presence in gene therapy as the sector gathers momentum with more therapies getting regulatory approval.

The company says that is part of a shifting focus from “symptomatic treatments to disease modification and eventually towards a cure.”

In 2018, it bought Element Genomics – a spin-out of Duke University in the US – to add genome-editing technologies, and has also been growing its internal exercise at its Boston R&D hub, although so far it hasn’t advanced and gene therapies into clinical development.

Earlier this year, UCB also bought a 47-acre UK R&D campus from Eli Lilly, saying it intends to develop it as a hub for R&D in “gene therapies, translational medicine and antibody discovery.”

It is also in the process of constructing a €300 million biological manufacturing facility at its site in Braine l’Alleud, Belgium, to ensure the supply of medicines in clinical development.

“A vast array of diseases are amenable to gene therapy and UCB is embracing this modality to expand its capabilities and ultimately transform the lives of patients with severe diseases,” said the company in a statement.

It added that AAV-mediated gene therapy can “drive a fundamental change in how diseases are treated with the ability to remove or add disease-related proteins with a single treatment.”

Leuven-based Handl was formed last year by Prof Michael Linden – formerly vice president of gene therapy at Pfizer – and Florent Gros, who has held executive positions at Nestlé, Pasteur Merieux Connaught and Novartis.

Handl’s technology portfolio stems from licensing deals with Prof Linden’s former employer King’s College London, as well as Belgium’s KU Leuven, the Centre for Applied Medical Research in Spain, and the University of Chile.

UCB hasn’t revealed how much it is paying for Handl, or indeed the terms of its alliance with Lacerta, a University of Florida spin-out which also focuses on central nervous system diseases and will contribute research and manufacturing expertise.

Handl has also tapped into the development and manufacturing capabilities at Novasep, a contract manufacturing organisation (CMO) also based in Belgium.

Under the terms of that agreement, Novasep will develop and manufacture AAV vectors and supply drug substances to support Handl’s preclinical and clinical studies.

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Addus HomeCare Corporation to Acquire Ohio Hospice Provider for $192M

Addus HomeCare Corporation (Nasdaq: ADUS) announced Wednesday it has reached a definitive agreement to acquire an Ohio hospice provider for $192 million.

Specifically, the deal is for Queen City Hospice and its affiliate, Miracle City Hospice. The $192 million represents $162.8 million of value, net of the present value of $29.2 million in estimated tax benefits, according to Addus.

The Queen City Hospice acquisition, along with two other closed acquisitions in 2020, brings Addus’ total acquired annualized revenues to about $82 million. Addus expects the transaction to be “immediately accretive” to its financial results.

Frisco, Texas-based Addus provides home care services to about 44,000 consumers through 214 locations across 25 states, while also offering home health and hospice care. The vast majority of its revenue comes from personal care services, however, which makes this investment into the hospice space all that more significant.

“We are very pleased to announce our agreement to acquire Queen City Hospice, a leading provider of hospice services in the state of Ohio,” Dirk Allison, the president and CEO of Addus, said in a press release. “This proposed acquisition is aligned with our strategy of providing hospice and home health care in markets where we already have a significant personal care presence. With this acquisition, Ohio becomes the second state where we have the capability to provide all three levels of home care.”

Addus already has eight home care locations in Ohio.

On its end, the PE-backed, Queen City Hospice operates in the major Ohio markets of Columbus and Dayton. The end-of-life care operator also operates in Cincinnati, where it is based.

The company’s network includes an average daily census of about 900 patients and 600 employees. It has annualized revenues of about $56 million, according to Addus.

“We look forward to working with the experienced operational leadership team at Queen City Hospice and its clinical staff of over 600 employees,” Allison said. “Importantly, we share the same dedication to patient-centered hospice services that allow consumers to receive quality, compassionate care in their homes. We believe this acquisition is a great strategic fit for Addus, and we look forward to the additional opportunities for growth through our combined operations.”

The acquisition marks the start of a strategy for Addus that will be characterized by bolstering its home health and hospice services in markets where it already has a personal care services presence.

It also adds additional fuel to what has been a red-hot M&A fire in recent weeks.

“Acquisitions have been and remain an important part of our growth strategy at Addus,” Allison said. “While our approach to acquisitions has emphasized appropriate caution and additional diligence through the early phase of the COVID-19 pandemic, we are now fully engaged in the process of identifying and pursuing acquisition opportunities in each of our three operating segments.”

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Pennant ‘Encouraged’ by Vaccine News, But Not Assuming Near-Term Changes to Home Health Operating Environment

Home health providers across the board are slowly starting to bounce back from COVID-19-related disruption. One thing that now provides further hope is a potential vaccine, especially as the U.S. continues to break daily records around new infections.

The Pennant Group Inc. (Nasdaq: PNTG) is among the providers rallying around this week’s positive vaccine news, which is centered on Pfizer’s announcement that one of its experimental vaccines is more than 90% effective.

The company’s leadership team expressed cautious optimism during a Wednesday conference call to discuss its third-quarter financial results.

“While we haven’t assumed a change in the operating environment stemming from the widespread adoption of a vaccine, we are encouraged by the initial reports on the efficacy and availability of potential vaccines,” Pennant CEO Daniel Walker said.

The Eagle, Idaho-based Pennant is a holding company of independent operating subsidiaries that provide health care services through 75 home health and hospice agencies, in addition to 54 senior living communities.

Pfizer’s progress is certainly promising, but home health providers and other long-term care operators will likely still have to deliver care without a widely available COVID-19 vaccine for months. The drug company still needs to explore how the trial vaccine works in different populations, and many health care organizations lack the freezers needed to actually store an effective vaccine.

For now, Pennant is taking a wait-and-see approach, Walker noted. But the company believes it could reap the benefits of the vaccine during the second half of 2021.

“The key there is the actual execution, finalizing it, making sure that communities are comfortable with it,” Walker said. “I think once it’s fully baked and available, distribution won’t be that big of a difficulty.”

Aside from keeping an eye out for COVID-19 vaccine updates, Pennant reported a continued successful transition to the Patient-Driven Groupings Model (PDGM), the Medicare payment overhaul that has been somewhat overshadowed by the pandemic. Pennant has benefitted from PDGM’s relatively favorable reimbursement rates for higher-nursing-acuity patients, according to Walker.

“Our strong performance is driven by the ability of our local leaders to adapt to the changing reimbursement and operating environment, and appropriate reimbursement for care provided to higher-nursing-acuity patients,” he said. “Since our inception, we have been committed to caring for patients based on individual patient and community needs. Often, this has resulted in serving underserved, higher-nursing-acuity patients, … now more appropriately reimbursed under PDGM.”

The third quarter also saw ample dealmaking opportunities. Between August and September, for example, Pennant announced the acquisitions of four home health agencies and two hospice agencies. Most recently, the company announced the purchase of Grants Pass, Oregon-based Riverside Home Health Care.

These transactions bring the total number of operations acquired or started since 2019 to 227.

During Q3, the company also closed on its home health joint venture with Scripps Health, a San Diego, California-based nonprofit integrated health system. The deal was first announced in March.

“Each transaction represents a unique opportunity for local leaders to drive outside multi-year growth, as they respond to local market conditions and take advantage of additional acquisition opportunities,” Derek Bunker, Pennant’s chief investment officer, said during the call. “As evidenced by the different structures of these transactions, our disciplined growth strategy takes many forms.”

As an organization, Pennant’s focus is on the “opportunistic” acquisition of existing operations, but startups and joint ventures are additional tools available to drive similar long term-results, according to Bunker.

In Q3, Pennant’s total revenue checked in at $98.4 million, an increase of $10 million, or 11.3%, compared to the prior year’s quarter. The company’s home health and hospice services segment revenue was $64.4 million, an increase of $9.2 million, or 16.7%, compared to Q3 2019.

Total home health admissions for Pennant in Q3 were 6,771, an increase of 21.9% over the prior year’s quarter.

The company’s quarterly results don’t include any funds from the Provider Relief Fund.

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LHC Group to Acquire End-of-Life Care Provider in the Arizona Market

LHC Group Inc. (Nasdaq: LHCG) announced Monday it has agreed to purchase Arizona-based East Valley Hospice and East Valley Palliative Care. The deal is expected to close on Jan. 1.

Mesa, Arizona-based East Valley Hospice and East Valley Palliative care provide at-home care for end-of-life patients as well as ones living with complex conditions. Together, they offer services to patients in Mesa, Phoenix and dozens of surrounding communities.

Both providers will continue to operate under the East Valley Hospice and East Valley Palliative Care names, respectively.

“We look forward to welcoming the teams at East Valley to our LHC Group family of providers,” LHC Group Chairman and CEO Keith Myers said in a statement. “We share a mission and vision to provide high-quality, in-home service to those who place their trust in us. Together, we will be able to bring hospice and palliative care to even more patients and families in Mesa and the surrounding Phoenix metro area.”

On its end, LHC Group offers home health, hospice and personal care services to patients in 35 states and Washington, D.C. LHC Group operates more than 110 hospice locations around the nation.

The Lafayette, Louisiana-based company expects $4.8 million of annualized revenue from the purchase, with the move expanding its footprint and service diversity in the greater Phoenix area.

Strategically, the acquisition is part of LHC Group’s goal of locating multiple in-home health care services in markets where there is an identified need. The company — like most others — has been especially active around hospice and end-of-life care over the past couple of years.

LHC Group already has a well-established and sizable home health agency in the Phoenix market that operates under the brand “At Home Healthcare.”

On a Q3 earnings call last week, LHC Group executives were openly optimistic about the company’s M&A capabilities for the rest of the year and the beginning of 2021.

In October, the company finalized an expansion of its joint venture with Irving, Texas-based Christus Health to enhance hospice services in that market.

The company believes its success dealing with the current COVID-19-impacted landscape has helped it the M&A arena.

“It’s having a positive impact not only on organic growth, but also on our M&A pipeline as we are extending current joint ventures and reviewing an increasing number of inbound requests for new partnerships to fulfill similar needs,” LHC Group President Joshua Proffitt said on the call.

The company also completed joint ventures in Florida, Georgia, Colorado and South Carolina in recent months.

“We believe that this recent activity will continue to gain momentum with increased M&A and continued strong organic growth trends in Q4 of 2021,” Myers said during the call.

Many home health insiders expected historic consolidation due to the Patient-Driven Groupings Model (PDGM) at some point during 2020. LHC Group still believes that is coming, or already underway, with COVID-19’s impact adding to it.

“We anticipate a historic consolidation opportunity in home health, and are seeing an increasing number of hospice opportunities in our pipeline,” Myers said. “We believe we are well positioned for a strong finish in 2020 and a strong start in 2021.”

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Why Complex Care Management Is Charter Healthcare’s ‘Crown Jewel’

In the midst of the in-home care M&A resurgence, Charter Healthcare Group has made a few moves of its own. Its recent acquisitions of Heartwood Home Health & Hospice and Vitality Home Healthcare reflect its two-pronged acquisition growth strategy.

Founded in 2006, Charter is a rapidly growing PE-backed post-acute care platform company.

Lately, when it comes to dealmaking, Charter has set its sights set on smaller organizations that need additional support, especially ones that share its focus on palliative care and complex care management services, Steve J. Larkin, the company’s CEO, told Home Health Care News.

“What we’re really doing is taking these small operations, talking with ownership, talking with local leaders, and then really creating a new future about how Charter can come in and handle these complex patients,” Larkin said. “Either in a palliative setting or a complex care setting with these at-risk providers, but then being able to work with them for those that may be appropriate or eligible for end-of-life care.”

Rancho Cucamonga, California-based Charter has locations across Arizona, California, Colorado, Nevada and Utah. The company’s service lines include personal care, skilled home health care, palliative care, complex care management and hospice.

Charter’s average daily census is about 4,000 patients.

In order to fill its acquisition pipeline, Charter has also sought out agencies in geographic locations where the company has existing relationships and partnerships.

In 2020 alone, Charter has made four acquisitions. In addition to Heartwood and Vitality, those deals include Las Vegas-based St. Luke’s Home Hospice LLC and Phoenix-based Arizona Select Hospice.

Over the past two years, the company’s home health business has experienced between 10% to 15% growth on a year-over-year basis. The company’s complex care management line has seen 38% year-over-year growth, while its palliative care division has seen 50% year-over-year growth.

While its growth has been a positive, it has also come with some growing pains. Finding a sufficient supply of in-home caregivers has been particularly difficult.

“The staffing component has been a real challenge,” Larkin said. “It’s just making sure that we can find, attract and train the right people. Staffing is constantly at the forefront of our conversations within the organization — to make sure that we can care for the patients that are coming in.”

Staffing challenges have been a consistent pain point for providers. Earlier this year, 44% of surveyed providers named staffing as their top operational challenge in 2020, according to HHCN’s 2020 Outlook Survey and Report.

To address this issue, Charter created a dedicated recruitment team last year. While this has helped, the COVID-19 pandemic has only made the situation even more difficult.

“I think COVID has made it that much more difficult,” Larkin said. Now we’ve got positions that have opened up because people have to step away. This has created stress, but I’ve been very pleased with the volume of candidates that have come in, as well as with the quality of candidates that have come in.”

Charter has also relied on its reputation in states where the company is well known to bolster its recruitment efforts. On the flipside, strategic acquisitions have been key in states that are new territory for the company.

“As we continue to recruit [in] states where people may not be as familiar with Charter, we’re relying on the local reputation of these businesses that we’re acquiring,” Larkin said.

Looking ahead, Charter wants to continue filling gaps between home health and hospice. Palliative care will remain a key focus, as will complex care management service — the company’s “crown jewel.”

“There is a significant amount of people in the population who are chronic and frail, even terminal, that may not wish to be in hospice or end-of-life care services,” Larkin said. “We also know the patients that we’re caring for today are more complex and wish to be at home. Our growth strategy at Charter is to really focus on palliative care and complex care management services, making sure that we’re keeping patients out of the hospital.”

To this end, working with at-risk providers, health plans and health systems has enabled Charter to evaluate the care the company provides.

“There’s a massive need in these markets for the services that we’re providing,” Larkin said. “For us, just making sure that we’re continuing to engage with our partners, with our communities, so that we know exactly what needs to be done.”

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Novo Nordisk to buy Emisphere and diabetes pill tech for $1.8bn

Novo Nordisk has agreed to buy Emisphere Technologies for $1.8 billion, as it continues its quest to develop diabetes medicines that can be taken as pills.

Copenhagen-based Novo Nordisk already markets Rybelsus (semaglutide), a version of its GLP-1 class drug that can help to control blood sugar levels in patients with type 2 disease.

But the company has tried and failed to produce insulin that can be taken orally – this proved unfeasible due to the high doses of the hormone that were needed for absorption through the gut.

The two companies have been working together since 2007 and Emisphere’s technology is already used under a licence agreement in the formulation for Rybelsus.

Novo will buy all outstanding shares in Emisphere for $1.35 billion plus royalty obligations owed to MHR Fund Management, Emisphere’s largest shareholder, for $450 million.

Chief scientific officer Mads Krogsgaard Thomsen told Reuters in an interview: “I don’t think we will ever completely get rid of the needles.”

“We have been making injection drugs for a hundred years, but we just have to admit that if we want patients to get treatment quickly in order to optimise the long-term course of the illness, then it requires tablets if possible,” he said.

Novo said it plans to make “substantial investments” into the platform and has around a hundred scientists at its headquarters refining the tablet technology.

He added: “By further developing the technology, we hope in the future to produce the medicine cheaper than we do now, thus allowing us to penetrate more markets and give broader access to diabetes drugs.”

Novo launched Rybelsus in the UK in September after it won backing from the cost-effectiveness body NICE.

After EU approval in April Novo said it had priced Rybelsus at parity with rival GLP-1 drugs in the UK, and NICE will not perform a single technology appraisal as a result, allowing the company to begin negotiations in England and Wales to get the drug included on NHS formularies.

 

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Novo Nordisk to Acquire Emisphere Technologies for $1.8B

Shots:

  • Novo Nordisk to acquire all outstanding shares of Emisphere for $1.35B and also acquires royalty stream obligations to the firm’s biggest shareholder (MHR) for $450M, making a total deal value as $1.8B
  • Novo Nordisk eliminates its future royalty obligations to Emisphere and MHR & obtains full access to the Eligen SNAC technology platform, thus enabling Novo Nordisk to expand its portfolio of oral biologics across therapy areas
  • The acquisition will provide Novo Nordisk full rights of the Eligen’s SNAC technology, which has been used under a 2007 license agreement to develop the first oral biologic, Rybelsus for T2D

Click here ­to­ read full press release/ article | Ref: Novo Nordisk | Image: SRX

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Bayada, Baptist Health Announce New Joint Venture

Bayada Home Health Care — one of the largest nonprofit providers of in-home care and post-acute care services in the country — is expanding its already massive footprint.

It’s doing so at a time when the need for home-based care is at an all-time high.

On Thursday, the Moorestown, New Jersey-based company announced it is forming a new joint venture with Baptist Health, a faith-based, mission-driven health system in Northeast Florida. The new JV will be known as “Baptist Home Health Care by Bayada” and begin operations in early 2021, pending licensing and regulatory approvals.

“This partnership enables Baptist Health to provide a wider array of in-home services to help people with multiple chronic conditions as well as patients recovering from an illness, injury or recent hospitalization,” Joe Mitrick, president of transitional care for Baptist Health and the hospital president of Baptist Beaches, said in a statement. “The demand for high-quality home health care services is rising, and there has never been a better time to build on our legacy of care for the community.”

As an overall system, Baptist Health comprises Baptist Medical Center Beaches, Baptist Medical Center Jacksonville, Baptist Medical Center Nassau, Baptist Medical Center South and Baptist Clay Medical Campus. The system also runs Wolfson Children’s Hospital, Northeast Florida’s only children’s hospital.

Bayada — which transitioned to nonprofit status in 2018 — provides a range of in-home care services to adults and children via its 345 total locations. Its U.S. footprint spans 22 states, with additional areas of operation in Canada, Germany, India and four other countries.

Among the strategic advantages, Baptist’s new joint venture with Bayada will allow the system to care for more of its patients in the home setting, something it had already been doing for 25 years.

An increasing number of health systems and hospitals are forging similar relationships with home-based care operators, which are generally better positioned to navigate the series of regulatory and payment changes currently taking place.

Teaming up with home health organizations also often gives systems an edge when it comes to avoiding costly readmissions.

“Health systems and hospitals have a vested interest in the success of their patients after they are discharged,” Bayada CEO David Baiada said in a statement. “With 45 years of home health care expertise grounded in our values of compassion, excellence and reliability, we are recognized as a valuable resource to help keep patients safe at home and out of the hospital.”

Nearly half the nation’s hospitals are getting lower payments for all Medicare patients this year because of their history of readmitting patients, Kaiser Health News recently reported. The penalties are part of the Hospital Readmissions Reduction Program, created under the Affordable Care Act.

Those penalties come at a time when systems and hospitals are already financially stressed, as many have had to postpone or cancel elective procedures due to the COVID-19 virus.

“We are committed to partnering with organizations like Baptist Health to meet the post-acute care needs of patients and other community residents, advancing Bayada’s mission to help millions of people experience a better quality of life in their own homes,” Baiada’s statement continued.

In addition to its core home health and post-acute care services, Bayada also offers non-skilled home care and private-duty nursing services to high-tech pediatric clients. It also delivers physician house calls.

Earl Evans — executive director of Baptist AgeWell, which provides enhanced primary care for adults 65 and older — said Bayada’s mission-driven mindset made it a perfect JV match.

“Baptist Health and Bayada’s culture and values are strongly aligned,” Evans said in a statement.

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‘These Funds Can Best Be Used Elsewhere’: LHC Group Returns $93.3M in Federal Relief

Rising demand for health care services delivered in the home and an increasingly favorable regulatory environment have set the stage for the nation’s top-tier home health operators. That idea has LHC Group Inc.’s (Nasdaq: LHCG) leadership team bullish about the company’s near- and long-term outlook.

LHC Group’s optimism is additionally supported by shifting referral patterns that suggest a new awareness of home-based care’s value. At the height of the COVID-19 public health emergency, for example, the Lafayette, Louisiana-based company saw a flood of primary care physician referrals.

“As we described in August, we continue to see a new normal in referral patterns,” LHC Group Chairman and CEO Keith Myers said during a Q3 earnings call on Thursday. “One where patients, families, physicians, discharge planners and other referral sources are increasingly choosing the safety, effectiveness and efficiency of in-home health care services over more costly — and potentially higher risk — congregant in-patient care settings.”

During Q1 2020, LHC Group saw 3,915 new sources of home health referrals. That improved to 3,996 in the second quarter, then to 4,582 in Q3.

The company has also increasingly turned its attention to the diversion of post-acute care patients into the home and away from skilled nursing facilities (SNFs).

“SNF diversion, which was an increasing trend, has become a best practice,” Myers said. “We believe that, at a minimum, the lower acuity third of patients referred to SNFs are clinically appropriate to be cared for in the home, achieving equal to or more favorable outcomes and patient satisfaction.”

LHC Group is already gaining a greater share of hospital discharges relative to SNFs, according to Bruce Greenstein, the company’s chief strategy and innovation officer.

When looking at discharges to post-acute care providers from Q2 2019 through Q1 2020, 21.3% of patients went to SNFs, while 21.1% of patients were sent to a home health provider, according to a recent report from Trella Health.

“That’s an area where, despite lower discharges from the hospital in an absolute number, we’re picking up a higher percentage of those that are coming out for any kind of post-acute care, as we continue to take market share from patients that otherwise would have ended up in a SNF,” Greenstein said on Thursday’s call.

COVID-19’s bottom-line impact

All in all, LHC Group incurred $10.5 million in COVID-19 costs during Q3. These costs are attributable to personal protective equipment (PPE) and employee-compensation initiatives, including bonuses and increased pay for front-line caregivers.

That amount is nearly half of the company’s Q2 COVID-19-related expenses, which came out to $27.3 million.

Throughout the home health industry, some operators have opted to cover those COVID-19 costs via the Provider Relief Fund, created under the CARES Act. LHC Group, however, decided to return the entire $93.3 million in funds it received from the fund.

“We believe returning these taxpayer dollars is the right thing for us to do, and that these funds can best be used elsewhere and with assisting with the ongoing response to the pandemic,” LHC Group President and former CFO Joshua Proffitt said on the call. “As a result, for the third quarter, we reversed $44.4 million … in government stimulus income that we had recognized in the second quarter.”

LHC Group’s service lines include home health, hospice and personal care services. Currently, the company operates in 35 states and Washington, D.C.

Overall, it posted net revenues of $530.7 million for the third quarter of 2020, a 0.41% increase compared to $528.5 million from the same period a year ago.

As for volume, LHC Group’s home health average daily census jumped from a “low point” of 74,817 for the month of April to a high of 84,091 for the month of October, a 12.4% increase.

“This monthly improvement has come even though there are a number of states that were slow to lift the ban on elective procedures and reinstated them in some cases,” Proffitt said.

As of Thursday morning, LHC Group is sitting at 85,259 patients on census, according to the company.

In April, the company’s home health admissions were at a low of 27,948. Q3 saw between 34,400 and 35,200 admissions per month, resulting in a 4.7% increase in organic home health admissions.

LHC Group had 36,786 admissions in October.

The company also noted it has experienced a severe decline in COVID-19-related missed visits, going from 22,913 in April to 722 in October.

LHC Group’s pipeline ‘as active as ever’

During the third quarter, LHC Group also further solidified its reputation for being a leader in joint venture partnerships with hospitals and health systems.

“Our partners have experienced firsthand throughout the pandemic just how well we have been able to deliver for them through close integration and collaboration, with the highest level of quality, in the most cost-effective setting,” Proffitt said. “That’s having a positive impact, not only on organic growth but also on our M&A pipeline.”

In August, the company finalized a JV with not-for-profit health care organization Orlando Health.

In October, LHC Group finalized a JV with University Health Care System.

The company also finalized a JV with Northeast Georgia Health System in October.

In November, the company finalized its plans to expand an existing JV partnership with Christus Health.

“We expect we’ll have a few more transactions to announce by the end of the year,” Proffitt said. “All told, we’ve completed joint ventures representing approximately $14 million in annual revenues since early August. With our value proposition on display, our pipeline is as active as ever.”

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Merck to Acquire VelosBio for $2.75B

Shots:

  • Merck will acquire all the outstanding shares of VelosBio for $2.75B in cash. The transaction is expected to be closed by the end of 2020
  • The acquisition will bolster Merck’s oncology pipeline with the addition of VelosBio’s VLS-101, which is an investigational ADC targeting ROR1 to treat hematological malignancies and solid tumors
  • In Oct’2020, VelosBio has initiated P-II study to evaluate VLS-101 for the treatment of patients with solid tumors, including patients with TNBC, HR+/HER2+ BC, and NSCLC. Additionally, VelosBio is developing a preclinical pipeline of ADCs and bispecific Abs targeting ROR1 to complement VLS-101 by offering alternative methods of tumor cell killing

Click here to­ read the full press release/ article | Ref: PRNewswire | Image: Shutterstock

The post Merck to Acquire VelosBio for .75B first appeared on PharmaShots.

Coloplast Acquires Nine Continents Medical

Shots:

  • Coloplast has acquired implantable tibial nerve stimulation (ITNS) treatment developer Nine Continents Medical for $145M upfront and an additional contingent milestone. ITNS is developed for overactive bladder (OAB)
  • Coloplast expected to initiate clinical studies of ITNS in 2021 with the goal to obtain pre-market approval for a Class III device in the US and EU market approvals in the 2024-2025 timeframe
  • ITNS is a miniaturized, self-powered unit placed in the lower leg in a short, minimally invasive procedure under local anesthesia. The unit does not require patient activation, recharging, or recurring visits to the doctor and works on the clinically proven MoA of percutaneous tibial nerve stimulation

Click here to­ read the full press release/ article | Ref: GlobeNewswire | Image: The Job Network

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Caring People Building Its Business by ‘Reinvigorating’ Home Care Owners

Sky-high equipment costs and staffing shortages tied to the COVID-19 virus have made it drastically more difficult to run a profitable home care business for many operators. That’s not true for Caring People, CEO Steven East told Home Health Care News.

Caring People has had to face its fair share of challenges over the past several months, but the West Palm Beach home care provider has been able to leverage its scale to stay in the black. A portfolio company of private equity firm Silver Oaks Services Partners, Caring People currently operates in New York, New Jersey, Connecticut, Florida and Texas, serving an average of 1,700 clients per day.

In addition to avoiding “going upside down financially,” Caring People has also had success recruiting caregivers and adding to its leadership team.

HHCN recently connected with East to learn more about COVID-19’s impact and the toll it takes on home care operators. During the interview, the CEO also touched on what Caring People looks for in its acquisition targets and how the company is tapping into new service lines.

Highlights from HHCN’s conversation with East are below, edited for length and clarity.

HHCN: Providers have incurred higher-than-normal operational costs in 2020 because of the COVID-19 pandemic. What has “the cost of COVID” been for Caring People?

East: If you want to break it down to a micro level, every visit that a provider performs, you have to protect your caregivers and clients with personal protective equipment (PPE). In the past, we didn’t have to do this. It’s definitely increased per visit costs by several dollars. If you’re going through multiple gloves and masks, then that increases costs exponentially. While it is a cost, we haven’t found it to be a very significant impact on the business.

One of the interesting things that evolved during the pandemic was the need to have safer transportation service for our caregivers, too. They were not comfortable going on public transportation. The clientele didn’t want someone who just rode the train to go in and take care of them. We had to become more reliant on Ubers and similar services.

We were also lucky because we had our own internal van service. We were able to start leveraging our fleet of vans, with about four or five vans driving all over New York, New Jersey and Connecticut during that initial wave of the pandemic. We were able to get our caregivers from Point A to Point B. Clients were more comfortable knowing caregivers were taking the van and not riding on the train with 50 or 60 other people. That was a cost we incurred, but it also helped us continue services for our clients.

With the added costs in mind, how do your financial margins compare to last year? Is it harder to run a profitable business?

At our scale, No. I remember the days when I started out, doing eight different jobs in the office. Margins were so tight back then that if my cost of care went up by 10%, I probably was upside down financially.

Now, we’ve been doing this for 20-plus years. We have significant back-office support. We’re able to really navigate the situation a little bit better than if I was still just a single-site provider. I could definitely see how PPE and other COVID-related costs can adversely impact someone, but we’ve been very fortunate.

Caring People is currently experiencing growth in administrative staff and caregivers. Can you provide some details and numbers around this?

We added two new executive positions: chief operations officer and the chief people officer. There is a need to have super-talented individuals in leadership positions as we continue to grow. We don’t ever want to sacrifice our delivery of care because of growth. We want to always make sure we have the right people in the right positions, at the right time.

As far as caregivers are concerned, we have a very comprehensive recruitment process. We have a completely centralized recruitment team, which has worked tirelessly since COVID-19 first hit. They were doing everything they could to source caregivers and onboard them. We went to a completely virtual onboarding process, so we’ve been able to keep our pipeline of caregivers going. We were very lucky that we weren’t seeing a dwindling workforce while demand continued to increase.

We saw a significant influx of folks coming from the service industry to work with our clients, individuals who could benefit from just the companion-type of service. For our companion business line, non-certified caregivers, we definitely saw more availability.

Your company has been active on the acquisition front, with its latest purchases being Acappella In Home Care, Aging Care LLC and AMR Care Group. Will acquisitions continue to play a major role in the company’s growth strategy moving forward?

It’s definitely part of our growth strategy, especially when we look at new potential markets and also adjacent markets to where we are now.

We have an approach that focuses on acquisitions, as well as organic growth, which includes new branches and also new service lines.

When it comes to acquisition targets, we definitely look for culturally aligned owners. It’s not our preference to do an acquisition where you go to closing, then the owners disappear right afterward. We like owners who want to stay on and be part of a larger company. We support the parts of the business they’re passionate about by removing all the stuff that kind of bogs you down, such as payroll, making deposits, etc. Once that’s off of an owner’s plate, they get reinvigorated with the business.

That’s the stuff that we really enjoy — sitting at a table with the owners. I’ll sit with 10 or 12 owners of companies that became part of the Caring People family. We’ll talk about different ideas, different growth strategies, different things they’ve always wanted to do but couldn’t. For me, having owners who want to be part of that vision is critical. Everything else will fall into place if you have that.

Do you have any specific goals when it comes to acquisitions? Are there new markets that Caring People is trying to enter? A specific amount of targets the company wants to purchase?

We’re very disciplined, so we’re not going to get out of our comfort lane when it comes to acquisitions. We’ll look for companies that, as I said, have that cultural alignment. It’ll probably be in a geographic location that’s desirable to us. We don’t ever go into the year saying, “Well, we want to get 10 or 20 done this year.” I don’t think it’s realistic to ever position it that way. It’s about finding the right opportunities. We have a great system and process for meeting owners and sourcing opportunities. So it’s just finding the right people, then we kind of see where the conversation goes. But we’ll focus primarily on markets that were attracted to.

What do you expect in-home care M&A activity to look like in 2021?

I don’t have a crystal ball for that.

I think you’re seeing a lot of activity now because people want to take some of the tax benefits of 2020, and there’s a lot of uncertainty about what 2021 looks like. I think there’s going to be a lull for a bit in 2021. It’s been such a volatile year, to say the least, I think things are going to slowly come down at some point. The election will be over, the vaccine will be out, kids will be back at school, and I think people will take a deep breath and evaluate where they are.

It’s a great time to be in home care and a great time for people who are thinking about getting out or joining a larger company. But I think once January comes, that first-quarter gets a little slow.

Aside from acquisitions, what else has helped your company see growth?

We are now getting more involved in understanding how to implement different service lines for our clients, such as telehealth, collaborating with physician practices that do video assessments. We’ve begun offering different geriatric care management services in most of our markets now, which we’re also doing virtually. I think there’s a lot of opportunities to grow organically, especially as people are embracing the digital space.

Last month, your company launched an Alzheimer’s and dementia care program. Can you provide an overview of the program and an update on how it’s going?

About 80% of our clients have a primary or secondary diagnosis of Alzheimer’s and dementia, so it behooves us to really start to dive into understanding the best way to deliver care for that client population. By advanced training with our staff members and hiring certified dementia specialists, we now are able to add that next layer of services to our clients.

Our caregivers go through a very rigorous continuing education program that is customized for our caregivers and our clients. We call it the Caring People University. We’re slowly continuing to evolve the way we can offer support services to our clients.

We have other ideas that we’re looking to further deploy over the next several months.

For me, the bottom line is really a byproduct of everything else that goes into the business. If you provide a high level of service, your turnover is going to be less, caregivers will stay longer, and clients will have a better experience.

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Addus Reignites M&A Engine, Targets Home Health and Hospice Acquisitions

The feeling around the recently expanded Addus HomeCare Corporation (Nasdaq: ADUS) headquarters in Frisco, Texas, is different from just three months ago.

Speaking on its Q2 earnings call in August, Addus leadership said the company was in “rebounding mode,” but also not as affected by COVID-19 uncertainties as they initially expected. Additionally, recruiting had become a pain point for the organization, Addus executives noted at the time.

Their tune was different Tuesday during the company’s Q3 earnings call, as Addus execs reflected on a strong quarter based on year-over-year growth despite harsh economic realities tied to the COVID-19 virus. Instead of more recruiting difficulties, company leaders suggested Addus is now in a successful hiring stretch.

“Our revenues continue to be adversely impacted by the COVID-19 pandemic, with a decline of approximately $6 million dollars from our pre-COVID 2020 run rate,” Addus CEO Dirk Allison said on the call.

Addus is a provider of home health, hospice and personal care services. It currently provides care to about 44,000 clients by way of 215 locations spanning 25 states in the U.S.

In Q3, its net service revenues were nearly $194 million, a 17% increase from about $169 million in Q3 2019. Its personal care services line accounted for $165 million of that figure.

The negative monetary impact tied to COVID-19 is mostly due to the company’s New York personal care market and its New Mexico hospice operations, where it’s having trouble gaining access to patients in facility-based settings.

“We estimate our fourth-quarter revenues will continue to be negatively affected by approximately 3% to 4% as compared to our pre-pandemic run rate,” Allison said. “The majority of this reduction is occurring in our New York market.”

New York state of flux

The state of New York has reduced its Medicaid payments uniformly, dealing a major blow to Addus, which has a large market share in the state and also deals heavily with Medicaid as a payer.

The New York State Department of Health announced that all non-exempt Medicaid payments would be reduced across the board by 1% beginning Jan. 1, with an additional 5% reduction taking place beginning April 1 of this year.

“Approximately one-third of our New York business is directly with the state and was immediately affected by this reduction,” Allison said. “We continue to work with our New York State associations to mitigate any future rate reductions and help educate the state leaders of the value of home- and community-based services.”

While headwinds have persisted out of New York, the state’s budget is not the only potential problem moving forward. States nationwide will have to navigate difficult budget challenges due to the ongoing COVID-19 crisis in the coming months and years, which could challenge a provider like Addus.

Addus would argue, however, that with federal relief to states and the general population, states should be able to survive budgetary constraints without undermining home- and community-based service providers.

“States are currently receiving an additional 6.2% federal Medicaid match as part of the CARES Act that will continue through the duration of the health emergency, which currently goes through the first quarter of 2021,” Allison said. “Our home-based care is cost effective and significantly safer than having patients in long-term care facilities in today’s challenging environments, which we believe the leadership of our states have recognized.”

Still, Addus’ New York market census is about 17% below what it was in Q1 of 2020.

But in two of Addus’ largest markets — Illinois and New Mexico — the company has seen a promising bounce-back in billable hours per week.

Those two states have shown promise heading into Q4 for the company.

“With the upcoming rate increase in Illinois on Jan. 1, we should continue to see solid same-store growth in our personal care segment,” Allison said.

M&A strategies

Addus recently acquired home care service providers in Pennsylvania, Montana and New Mexico, as well as VIP Health Care Services, a provider out of Richmond Hill, New York.

“Acquisitions have been and remain an important part of our growth strategy at Addus,” Allison said. “We have strategically maintained a strong capital structure, which allows us to take advantage of acquisition opportunities as they occur.”

Addus “took a short pause” from pursuing new acquisitions during the early phases of the COVID-19 pandemic, but it is now fully reengaged in the process of identifying and closing additional acquisition, he added.

One of the company’s chief M&A concerns remains building density in different geographic markets. Although personal care services dominate the greater portion of Addus’ business, it hopes in the future to build out its home health and hospice segments to complete the “three legs of the stool,” an expression commonly used within the home-based care space.

Addus feels as though it is working toward that goal in New Mexico, in particular.

“We will continue to look in the personal care market, which is obviously the biggest part of our business, trying to fill out states in which we currently have strong operations,” Allison said. “But at the same time, we want to continue to look at the clinical side of our business, adding home health and hospice in those markets.”

Recruiting during COVID-19

After initial bumps in recruiting at the beginning of the COVID-19 pandemic, Addus has rebounded on the recruiting and hiring front.

“On a company-wide basis, we continue to see an overall reduction in patients on hold and improvement in our caregivers hiring numbers, which contributed to a sequential 6.5% increase in our personal care same-store census,” Allison said.

New York still remains a challenge, as there are still enhanced unemployment benefits in place in the state, which can discourage caregivers from coming back to work.

From August forward, however, Addus says that it’s up 2% in terms of caregiver hires per business day.

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Centerbridge Partners, The Vistria Group Acquire Wellspring’s Help at Home

Help at Home — a Chicago-based home- and community-based services provider that operates across 13 states — has been acquired by a consortium of private equity buyers.

Specifically, Centerbridge Partners and The Vistria Group are teaming up to purchase Help at Home from Wellspring Capital Management, which will remain a minority investor in the company. The deal officially closed on Friday.

Founded in 1975, Help at Home provides a variety of medical and non-medical in-home care services across its footprint, caring for more than 60,000 clients across 155 locations. New York-based Wellspring — a PE firm that has raised more than $4 billion of initial capital commitments through six private equity funds — completed its acquisition of Help at Home in August 2015.

In the deal announcement, Help at Home CEO Paul Mastrapa thanked Wellspring for its five years of stewardship. The CEO likewise noted that the Help at Home team looks forward to working with both Vistria and Centerbridge in years to come, especially as the COVID-19 pandemic shines a brighter light on the value of home-based care.

“For more than four decades, Help at Home has enabled seniors and people with disabilities to continue to lead independent lives in the familiar settings of their homes and communities,” Mastrapa said. “Now, with the COVID-19 pandemic, the in-home care we provide is more critical than ever because it allows these often vulnerable populations to receive care and support in the safety of their own homes.”

Chicago-based PE firm Vistria is already a big player in the home care and hospice space. Its portfolio, for example, includes St. Croix Hospice, Hospice Care of South Carolina and Civitas Solutions.

Broadly, the firm’s purchase of Help at Home was an opportunity to further bolster the delivery of care in the home, according to David Schuppan, a senior partner at Vistria.

“Help at Home is a leader in what is an important trend in health care and one that’s consistent with a theme we’ve been exploring, which is the support of seniors and others with complex conditions in their preferred home- and community-based setting,” Schuppan told Home Health Care News in an email. “We think there’s tremendous societal and economic value creation here.”

With offices in New York and London, Centerbridge Partners is a private investment management firm that has $26 billion in capital under management. Centerbridge had previously worked with Vistria to acquire Civitas as part of a $1.4 billion deal that closed in March 2019.

“We are excited to have completed the acquisition of Help at Home, a trusted provider of care solutions that empowers individuals to live life on their own terms with support from highly trained, compassionate and dependable caregivers,” Jeremy Gelber, senior managing director at Centerbridge, said in a press release. “As we move forward, we will partner with Paul and the talented Help at Home team to expand access to the company’s services as the company continues to deploy its resources and expertise to deliver unsurpassed care.”

Help at Home and Centerbridge both declined to comment for this story.

While financial terms of the transaction were not publicly disclosed, PE Hub previously reported on a rumored deal between Help at Home, Vistria and Centerbridge in September. At the time, PE Hub reported the deal was for $1.4 billion.

Now officially in the books, Vistria and Centerbridge’s play for Help at Home adds to what has been an increasingly active M&A market.

The second quarter of 2020 saw the lowest number of home health, home care and hospice transactions since the end of 2017, according to data from M&A advisory firm Mertz Taggart. Q3, however, saw at least 25 total transactions.
“I’ve been selling home health agencies since 2006, and can’t recall a time when demand has been higher,” Mertz Taggart Managing Partner Cory Mertz told HHCN early in October. “Since July, we have received more calls from both strategic and financial buyers looking for home health than I can ever recall in a three- or four-month period.”

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24 Hour Home Care Acquires Grace Care Management, ‘Actively’ Searching for More M&A Opportunities

In an effort to bolster its at-home care offerings in the San Diego market, 24 Hour Home Care has acquired Grace Care Management, another home care agency located in the area.

Since its founding in 2008, Los Angeles-based 24 Hour Home Care has grown quickly and steadily. But that growth has been mostly organic — until now.

Grace Care Management will become a part of the 24 Hour Home Care brand later this month. The deal will mark 24 Hour Home Care’s fifth acquisition overall.

“[Grace Care Management] has been in the San Diego area for nearly 20 years, so they’re really a staple of the community,” Andy Matthews, the VP of business development for 24 Hour Home Care, told Home Health Care News. “It made a lot of sense for us from that standpoint.”

24 Hour Home Care is an independent, non-medical home care provider with 20 locations spanning California, Arizona and Texas. It employs over 10,000 caregivers and has been one of the fastest growing companies in the U.S. for the past eight years, according to Inc. Magazine.

The acquisition of Grace Care Management was seamless considering that the two agencies have been working together since 2018, when Grace Care Management needed help with staffing capacity. Since then, 24 Hour Home Care has helped with any overflow the agency has had.

“But what we saw while helping was that they really have a patient-centered focus, and they also have a geriatric case manager — and we love that aspect,” Matthews said. “That’s something that really adds a lot of value to our clients, that we can now provide. It really seemed like this was the obvious next step.”

Grace Care Management is based in Ramona — a part of San Diego county — and expands 24 Hour Home Care’s footprint nicely in that area, Matthews noted. In addition to home care services, the organization also offers 24/7, on-call care management capabilities, as its name implies.

Ryan Iwamoto, the president and co-founder of 24 Hour Home Care, explained how the first decade of the company’s expansion was mostly driven by internal, organic growth on the most recent HHCN Disrupt podcast.

Now, the company’s success has positioned it to become more aggressive in M&A, Matthews said.

“We were very fortunate that Grace Care Management fell right into our lap,” Matthews said. “But we are actively looking for acquisitions as well. This is an active part of our strategy that we’re looking for new partners, whether it be in new markets or in our current market share.”

24 Hour Home Care’s strategy now will combine that trust in organic growth and growth through M&A. Matthews sees M&A as a way to add value to its existing markets and also expand to new markets in California, Texas and Arizona, and perhaps across the U.S. moving forward.

Cindy Hasz — the founder and CEO of Grace Care Management, and the geriatric expert that 24 Hour Home Care was so eager to add to its network — believes that the move will be mutually beneficial. 

“We’ve been looking for a partner that could provide the tech infrastructure that will create greater efficiencies,” Hasz said in a press release. “This is a win-win for seniors and those with special needs throughout San Diego because they will get the best of both worlds – the same great caregivers they know and love along with access to a staff of experts that can provide counsel any time they need it.”

Broadly, an increasing number of home health and home care companies have been active in seeking care management assets.

In August, for example, Caring People completed a handful of deals driven by a focus on care management. Meanwhile, in January, Arosa+LivHome acquired Lifecare Innovations to expand its care management footprint.

The focus on care management is likely to continue heading into 2021, especially as providers build out their service lines and care for more clients or patients on a longitudinal basis.

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Sanofi to Acquire Kiadis for ~$358M

Shots:

  • Sanofi to acquire all outstanding shares of Kiadis for $6.34/ share, representing an equity value of $358.76M. The offer price represents a premium of 272% over the closing price on Oct 30, 2020, a premium of ~247% over the 30 trading days VWAP and a premium of ~200% over the 90 trading days VWAP
  • The transaction is expected to be completed in H1’21. The addition of Kiadis’ NK cell platform and pipeline of cell-based cancer immune-therapeutics & infectious disease therapies complements Sanofi’s existing therapeutic expertise
  • In July’2020, Sanofi licensed Kiadis’ pre-clinical K-NK004 program for MM. Sanofi’s infrastructure and capabilities will be leveraged to advance the development of Kiadis’ pipeline

Click here to­ read the full press release/ article | Ref: Sanofi | Image: Kiadis

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FTC clears Mylan merger with Pfizer’s Upjohn – with conditions

Mylan’s $12 billion takeover of Pfizer’s Upjohn unit has been cleared by the US authorities, but on the condition that the two companies divest various generic drug products.

The Federal Trade Commission (FTC) has ruled that the combined company – to be called Viatris – could have an anticompetitive position in the US market for seven generic drugs used for high blood pressure, heart failure, epilepsy, bacterial infections and uterine bleeding if the divestments don’t go ahead.

The FTC’s ruling means that Pfizer and Mylan have now obtained all the antitrust approvals needed for the merger to go ahead. Upjohn is now due to be spun off from Pfizer on 13 November, with the merger concluding three days later – around 16 months after first being announced. It was backed by the European Commission in mid-September.

Once formed, Viatris will be a generics behemoth with annual sales of around $19 to $20 billion and operations in 165 markets around the word. Mylan shareholders will hold approximately 43% of the new venture, with Pfizer investors taking 57%.

The deal is structured in a similar way to Pfizer’s joint venture with GlaxoSmithKline in consumer health, allowing the company to shed off lower-margin products whilst retaining an interest and generating cashflow to invest in its new product pipeline.

Mylan meanwhile will benefit from Upjohn’s greater global reach, allowing its generics to grow more quickly, according to the companies.

The generics that have to be divested include medroxyprogesterone, amlodipine besylate/atorvastatin, phenytoin, prazosin, spironolactone, gatifloxacin, and eplerenone products, according to the FTC.

Upjohn’s amlodipine besylate/atorvastatin, phenytoin, prazosin, spironolactone, gatifloxacin and medroxyprogesterone products must be divested to Prasco, and Mylan’s eplerenone product must also be shed.

The FTC was also concerned about three other drugs – sucralfate to treat and prevent ulcers in the small intestines, levothyroxine for hypothyroidism, and varenicline, the active ingredient in Pfizer’s smoking cessation brand Chantix.

The approval conditions also require a green light from the FTC before Pfizer, Mylan or Viatris may “gain an interest in, or exercise control over, any third party’s rights” to levothyroxine, sucralfate and varenicline tablets.

The divested products should continue to be manufactured by Upjohn and Mylan’s current suppliers in order to avoid any shortages in the market, and in some cases Pfizer will act as a contract manufacturer to Prasco.

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Sanofi to acquire Kiadis and NK cell tech for $353 million

Sanofi is to acquire Kiadis, a biotech specialising in therapies based around ‘off the shelf’ natural killer (NK) cells, for 308 million euros ($353 million).

The French pharma is buying Kiadis for 5.45 euros per share in cash, an offer price representing a premium of 272% over the biotech’s closing price on Friday evening on Amsterdam’s Euronext market.

It’s a substantial price to pay for the small pharma. Although the company’s share price has been notoriously volatile, the NK-cell technology is still largely unproven in clinic.

Allogeneic, or ‘off the shelf’, cell therapies are derived from banks of cells, and potentially offer the therapeutic benefits seen with autologous cell therapies derived from a patient’s own bodies but without the complex, costly and lengthy manufacturing process.

Autologous CAR-T cancer therapies based on T-cells are already on the market from Novartis and Gilead, but have had a slow start in terms of sales as health systems struggled to come to terms with their high price and the logistics of manufacturing them and delivering them to patients.

While Kiadis’ technology is mainly intended for cancer, the biotech announced plans in August to develop a NK-cell therapy for COVID-19, sending its shares soaring before they fell back due to profit-taking.

This followed a separate deal with Sanofi in July, where the pharma licensed Kiadis’ pre-clinical drug K-NK004 for multiple myeloma.

Kiadis has K-NK002 in phase 2 development to prevent patients with acute myeloid leukaemia (AML) and myelodysplastic syndromes from relapsing after transplant.

Also in phase 1 development is K-NK003, for patients with relapsed or refractory AML.

Kiadis is drawing up plans to begin a phase 1/2a clinical trial of KNK-ID-101, its COVID-19 therapy in high risk patients, with funding from the French government.

Acquiring Kiadis outright makes sense for Sanofi, which already has a foothold in cancer immunotherapy thanks to its Libtayo (cemiplimab), developed in partnership with Regeneron and already approved in a form of skin cancer.

Shareholders in Kiadis will likely be pleased with the substantial premium agreed and the deal has the unanimous support of its board.

Funds managed by Life Sciences Partners have committed to support the offer, accounting for 18.3% of shares in the Netherlands-based biotech.

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Medtronic Expands ENT Portfolio with the Acquisition of Ai Biomed and the Approval of NIM Vital Nerve Monitoring System

Shots:

  • Medtronic has expanded its portfolio of technologies focusing on improving the safety of head and neck surgeries with the acquisition of Ai Biomed and the US FDA’s 510(k) clearance of NIM Vital nerve monitoring system
  • The NIM Vital nerve monitoring system enables physicians to identify, confirm, and monitor nerve function to help reduce the risk of nerve damage during head and neck surgery
  • The acquisition marks the 7th acquisition by Medtronic in 2020. The acquisition will add the PTeye laser system to Medtronic’s ENT portfolio which a tissue-detecting probe used in thyroid surgery

Click here to­ read the full press release/ article | Ref: Medtronic | Image: Market Watch

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Novartis keeps a close eye on gene therapy with Vedere Bio buy

Already a major player in gene therapy, Novartis has swooped on US startup Vedere Bio in a $280 million deal that builds its position in inherited eye diseases that can lead to blindness.

Incubated by Atlas Ventures, Cambridge, Massachusetts Vedere has been flying under the radar since it was founded in 2019 to develop adeno-associated virus (AAV) based gene therapies for ocular diseases, but didn’t escape the beady eye of Novartis.

The Swiss pharma group already sells one gene therapy for inherited retinal diseases (IRDs) – Luxturna (voretigene neparvovec) – for which it licensed ex-US rights from Spark Therapeutics (now part of Roche) in 2018.

Novartis’ big move in the gene therapy market came when it bought AveXis for $8.7 billion in the same year to add spinal muscular atrophy therapy Zolgensma (onasemnogene abeparvovec), which has made $1 billion in sales since launch last year.

Earlier this year, the group also signed a licensing deal with Dyno Therapeutics for its AAV capsid-based gene delivery technology, also focused on ocular disease which remains one of Novartis’ core drug development targets despite the spin-off of the Alcon eyecare division in 2019.

Shortly after, Novartis teamed up with Sangamo in a deal focused on the adjacent gene therapy discipline of gene silencing, targeting neurodevelopmental disorders like autism.

The Vedere acquisition includes $150 million upfront and $130 million in potential milestones, and expands Novartis position in ocular disease gene therapy with an AAV delivery platform as well as rights to light-sensing proteins that can be delivered to cells in the retina.

It also gets two preclinical-stage development projects. One focusing on IRDs – a wide range of genetic retinal disorders caused by mutations in some 250 genes that are marked by the loss of photoreceptor cells and progressive vision loss. IRDs affect around 2 million people worldwide.

The second is looking at geographic atrophy, an advanced form of ‘dry’ age-related macular degeneration (AMD) that affects around 5 million people around the world and has no approved medical treatments.

While gene therapies like Luxturna are aimed at preventing progressive vision loss, Novartis thinks it could go a step further with the Vedere platform and attempt to restore vision that has already been lost – something that the company’s scientific founders have achieved in animal models.

Combining the light-sensing proteins and AAV platform has the potential “to vastly expand the number of patients who could be treated for vision loss due to photoreceptor death,” according to the company.

When delivered to retinal cells, the proteins stimulate them to sense and transmit information to the visual processing centres in the brain, bypassing cells that have already degenerated.

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Novartis Acquires Vedere Bio for $280M

Shots:

  • Vedere Bio received $150M as upfront payments and is eligible to receive up to $130M as milestones making a total deal value of $280M. The transaction closed in Sept’2020
  • The acquisition will strengthen Novartis’ footprints with the addition of lead preclinical intravitreally injected AAV gene therapy programs focused on pan-genotypic vision restoration in patients with photoreceptor-based vision loss
  • Prior to the acquisition, earlier-stage vision restoration and vision preservation assets leveraging the company’s ocular gene therapy toolbox were spun out into a newly formed entity – Vedere Bio II. The new company will operate as a wholly independent entity from Novartis and Vedere Bio

Click here ­to­ read full press release/ article | Ref: PRNewswire | Image: Easier Accounting

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Home-Based Care Powerhouse Intermountain Healthcare to Merge with Sanford Health

Intermountain Healthcare — one of the largest health systems in the country and among the most bullish on home-based care — is merging with Sanford Health.

Sioux Falls, South Dakota-based Sanford Health is a health system that operates across 24 states. The organization boasts 46 hospitals, 1,500 provider groups and 366 Good Samaritan Society senior care and living centers.

Founded in 1975, Salt Lake City, Utah-based not-for-profit Intermountain is the largest health care provider in the Intermountain West region. The system has 41,000 employees who work across 24 hospitals and 225 clinics, plus an in-house insurance division.

Intermountain unveiled its merger plans on Monday, announcing it has signed a letter of intent to develop a strategic partnership with Sanford Health. Intermountain President and CEO Marc Harrison pointed to Intermountain and Sanford’s aligned values when it comes to better serving communities as a key reason for the move.

“This merger enables our organizations to move more quickly to further implement value-based strategies and realize economies of scale,” Harrison said in a press release. “Through coordinated care, increased use of telehealth and digital health services, we will make health care more affordable for our communities.”

On Sanford Health’s end, the merger helps the organization accomplish its goal of further propelling health care affordability and accessibility, according to Kelby Krabbenhoft, the system’s president and CEO.

“Today, we’re marking another major milestone in our long history of working to change the course of health care across the globe,” Krabbenhoft said in a press release. “By coming together with Intermountain Healthcare, we will improve the health and well-being of the communities we serve and strengthen our impact in health care delivery and value.”

After the two organizations officially merge, the combined Salt Lake City-based entity will employ more than 89,000 people and operate 70 hospitals. It will additionally operate 435 clinics across seven states, delivering senior care in 233 locations in 24 states while also covering 1.1 million people through its health plan arm.

With both Krabbenhoft and Harrison touching on community-focused care in the merger announcement, in-home care will likely remain a huge priority for the combined enterprise. Intermountain has been aggressive in its efforts to push care further into the home over the past few years, with one of the biggest examples being the expansion of its Intermountain at Home program last year.

“Intermountain has been in the home space for quite a while through our home health and hospice business,” Rajesh Shrestha, chief operating officer of community-based care for Intermountain, told Home Health Care News in April 2019. “We’ve expanded that over the last couple of months with palliative care, some very early home-based primary care and a little bit of dialysis in the home as well. Essentially, we’re doubling down on moving upstream into patients’ homes.”

Prior to that expansion, Intermountain had also partnered with Lifesprk — a Minnesota-based in-home care provider — for the launch of Homespire, a holistic home care joint venture in Utah.

“With the addition of our Homespire joint venture, we’re able to wrap all of [our] services around with activities of daily living and social determinants of health work,” Shrestha said. “That package together, we feel, is the most comprehensive home-based program in the U.S., once this is all rolled out.”

In addition to those efforts, last year, the organization also launched a new Kidney Care Center designed to allow patients to receive at-home dialysis.

Most recently, Intermountain rolled out a hospital-level in-home care partnership with Castell, a health IT platform.

As far as leadership under the pending merger with Sanford, Harrison will serve as president and CEO of the combined organizations. Meanwhile, Krabbenhoft will serve as president emeritus.

The merger is slated to close in 2021. For now, the companies will retain their current names.

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Exact Sciences buys cancer detection company Thrive for $2.15 billion

Stocks for Exact Sciences leaped 33% after it announced the acquisition of liquid biopsy rival Thrive and UK start-up Base Genomics.

Exact Sciences said it has agreed to buy Thrive for a cash and stock deal worth up to $2.15 billion, positioning it as a leader in the cancer-screening market.

The Madison-based company has made no secret of its ambitions to become the top player in the liquid biopsy space.

Thrive’s technology has attracted excitement from investors since it spun out of Johns Hopkins University. In July 2020, the company closed a $257m series B funding round, led by Casdin Capital and Section 32.

The CancerSEEK blood test is designed to detect multiple cancers by analysing tumour specific genomic mutations in circulating tumor DNA (ctDNA) and cancer-associated protein biomarkers in plasma. These are then analysed by machine learning algorithms.

The company’s DETECT-A study was the first-ever prospective, interventional study of a multi-cancer blood test. Key findings from the study showed CancerSEEK had a specificity of 99.6% and identified cancer in individuals without a history of the disease. The study was hailed by Thrive as a “seminal moment” in cancer screening.

Exact Sciences, which is behind brands Cologuard and Oncotype DX, said it will combine CancerSEEK with its scientific platform, clinical organization, and commercial infrastructure. The company also announced the acquisition of Base Genomics, a UK epigenetics start-up for $410m. The start-up uses DNA methylation analysis to detect cancer in its early stages.

Exact Sciences Cologuard business also received a boost from updated guidelines released by the United States Preventive Services Task Force. The draft recommended colorectal cancer screening should now begin at age 45 and recommends Exact Sciences’ Cologuard as a screening method for all average-risk patients between the ages of 45 and 75.

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Exact Sciences to Acquire Thrive Earlier Detection for ~$2.15B

Shots:

  • Exact Sciences to acquire Thrive in all cash & stock transaction for ~2.15B out of which $1.7B would be payable at closing, consisting of 65% in Exact Sciences common stock and 35% in cash along with ~$450M as milestones related to the development and commercialization of a blood-based, multi-cancer screening test. The transaction is expected to be close in Q1’21
  • The acquisition will establish Exact Sciences as a leading competitor in blood-based, multi-cancer screening with the addition of Thrive’s, CancerSEEK. The agreement will accelerate the approval, availability, and adoption of multi-cancer screening
  • Additionally, Exact Sciences also acquires Base Genomics to extend its DNA methylation capabilities. The acquisition will boost Exact Sciences’ efforts in cancer diagnostics across the continuum

Click here ­to­ read full press release/ article | Ref: Exact Sciences | Image: European Coatings

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Bayer Acquires Asklepios for ~$4B

Shots:

  • Bayer acquires AskBio for $2B as upfront and ~2B as milestones with 75% of the milestones to be paid during the next five years. The transaction is expected to be close in Q4’20
  • The focus of the acquisition is to foster Bayer’s cell and gene therapy platform with the potential to bring treatments to patients across multiple disease areas. Bayer will own full rights to AskBio’s gene therapy platform, including its IP portfolio and an established CDMO
  • The acquisition of AskBio will complement Bayer’s 2019 acquisition of BlueRock and lay the foundation for partnerships in AAV therapies. AskBio’s development portfolio includes investigational pre/ clinical-stage candidates for neuromuscular, CNS, CV and metabolic diseases

Click here ­to­ read full press release/ article | Ref: Bayer | Image: FinSMEs

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Bayer buys cell & gene therapy firm AskBio for $4 billion

Bayer is making clear its ambitions in cell and gene therapy with a $4 billion acquisition of US biotech Asklepios BioPharmaceutical, also known as AskBio.

AskBio’s portfolio includes pre-clinical and clinical stage candidates for the treatment of neuromuscular, central nervous system, cardiovascular and metabolic diseases.

Through the acquisition, Bayer will gain full rights to the company’s gene therapy technology and manufacturing platforms, including AskBio’s adeno-associated virus (AAV)-based platform, which has already demonstrated applicability across different therapeutic areas. 

The company’s most advanced programmes are in Pompe disease – a rare genetic disease causing buildup of a sugar molecule inside cells – Parkinson’s disease and congestive heart failure.

Under the terms of the agreement, Bayer will pay $2 billion, with a further $2 billion marked out for potential success-based milestone payments.

According to the company’s statement, some 75% of the potential success-based milestone payments are expected to be due during the course of the next five years and the remaining amount late thereafter.

Last year Bayer fully acquired another cell therapy company, BlueRock Therapeutics – which was created in 2016 via a joint venture between Bayer and Versant Ventures, and is also working on Parkinson’s Disease therapies. 

Like with BlueRock, Bayer says it wants AskBio to operate on an “arm’s-length basis” to “persevere its entrepreneurial culture as an essential pillar for nurturing successful innovation”.

Reuters reports that AskBio and BlueRock will exchange information and collaborate but will each operate as independent companies. In light of this, AskBio’s five main owners have pledged to remain with the firm.

“We are staying on board because of the unique structure that Bayer has provided,”  said CEO and co-founder Sheila Mikhail.  We’ll have the ability to make our science decisions.”

Cell and gene therapy is viewed as one of the most promising areas in pharma, with several biotech and big pharma firms making plays in the area.

These therapies offer new treatment options for many currently untreatable diseases, particularly genetic diseases caused by a single genetic defect.

AskBio has licensed some of its experimental drugs to external partners, such as Pfizer, which recently won fast-track designation in the US for a Duchenne Muscular Dystrophy candidate, PF-06939926, that was invented by AskBio.

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Varsity-Backed Angels of Care Announces Strategic Partnerships, Expands into Three New States

Angels of Care, a home health provider that specializes in caring for pediatric patients with complex medical conditions, announced Thursday that it has entered into a strategic partnership with Nursing Solutions and Mission Medstaff.

Under terms of the strategic partnership, Nursing Solutions and Mission Medstaff will join Angels of Care’s platform going forward. The financial terms of the deal were not disclosed.

Founded in 1992, Phoenix, Arizona-based Nursing Solutions is a home health provider that cares for both adult and pediatric patients. Its service lines include long-term skilled nursing care, personal care and respite service.

Mission Medstaff — founded in 2009 — also provides home health services to both pediatric and adult patients, doing so in North Carolina and South Carolina.

Moving forward, Nursing Solutions and Mission Medstaff patients will continue to receive services from the caregivers and office staff they are familiar with, Jessica Riggs, CEO of Angels of Care, told Home Health Care News in an email.

“The partnership will enable each company to benefit from Angels of Care’s scale and expertise in recruiting and training excellent nurses, and supporting the families of patients with complex medical needs,” Riggs said.

Founded in 2000 by Bonnie West, Sherman, Texas-based Angels of Care provides private-duty nursing care, skilled therapy and other home health services across five states. According to the provider’s website, it employs more than 4,000 passionate pediatric nurses, skilled nurses, physical therapists, occupational therapists, speech therapists, attendants and specialists.

Angels of Care is backed by Varsity Healthcare Partners, a lower middle-market private equity firm focused on health care services.

For Angels of Care, Nursing Solutions and Mission Medstaff were attractive targets because of how well the companies aligned as far as mission, services and values.

“Like us, Angels of Care is passionate about providing the highest quality care possible to its patients,” Matt Hampton, founder of Mission Medstaff, said in a statement. “We are excited to join their platform, which will enable us to continue providing exceptional, cost-effective, family-focused care for our patients with complex medical needs.”

Another draw for Angels of Care: The deal allows the company to further expand into additional geographies.

On Nursing Solutions’ end, the opportunity to join an established home health platform that has a strong industry foothold was appealing.

“We evaluated a number of alternatives and felt this partnership with Angels of Care was in the best interest of our clients and caregivers,” Bill Johnsen, founder of Nursing Solutions, said in a statement. “We look forward to joining this winning team and continuing to serve the needs of our patients 24/7.”

The global pediatric home health care market is valued at $30.9 billion and is expected to grow to roughly $56 billion by 2026, according to a 2020 study conducted by Acumen Research.

While there is high demand for pediatric home health services, operators are often challenged by staffing and reimbursement constraints. One innovative solution focused on both problems has been the “Family CNA Model,” pioneered in Colorado by companies like Team Select Home Care.

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David Hung’s Nuvation Bio seals merger with blank cheque firm Panacea

Two years after quietly forming cancer start-up Nuvation Bio, ex-Axovant and Medivation CEO David Hung has agreed a big merger that will take it public – and provide more than $850 million in funding to boot.

Hung’s new company is merging with Panacea Acquisition Corp, a special purpose acquisition company or SPAC – sometimes referred to as a ‘blank cheque’ company – tapping into an emerging trend among biotech companies.

SPACs are set up with investor funding – generally aiming to bolt-on an R&D pipeline via M&A – and can provide a quicker route to a public market debut than the more common initial public offering (IPO).

The SPAC goes public itself, ahead of any acquisition or merger, and Panacea went down that route with a $150 million IPO earlier this year, along with a pledge to find suitable merger candidates in the oncology field.

That IPO adds to a sizeable $275 million first-round financing for Nuvation last year, while institutional investors led by EcoR1 Capital have committed $500 million to the company through concurrent equity investments associated with the Panacea merger.

That big war chest will be available to advance Nuvation’s pipeline of six-wholly-owned experimental cancer therapies that all scheduled to start clinical trials between now and 2026, headed by a drug for patients with high-grade gliomas, an aggressive form of brain cancer.

The deal catapults Hung back into the spotlight after a turbulent few years. He led Medivation to a big $14 billion takeover by Pfizer in 2016, and then joined Roivant group company Axovant, where things didn’t go so well.

Hung left Axovant in 2018, shortly after the biotech’s lead candidate for Alzheimer’s disease flunked a phase 3 programme and was abandoned, and founded Nuvation later that year to develop “novel oncology therapeutic agents for the most difficult-to-treat cancers, specifically targeting indications for which conventional therapies have failed.”

The first of these, CDK 2/4/6 inhibitor NUV-422, is due to start a phase 1/2 trial in gliomas, including a form called glioblastoma multiforme (GBM) with very few treatment options, in the first quarter of 2021. That’s also around the time the Panacea merger is expected to close.

There are also drugs targeting BET, WEE1 and A2A in preclinical development for leukaemia and solid tumours, and a series of PARP-targeting drugs for prostate, breast and ovarian cancer.

“We have demonstrated, in preclinical studies, the potential of those candidates to significantly improve outcomes over current standards of care,” said Hung, who will retain his position as CEO of the company after the merger closes.

Hung, together with the team of chemists from Medivation, invented all of the programs in Nuvation’s current pipeline, according to the company.

Panacea CEO Oleg Nodelman said the SPAC was set up to partner with a company that had “an exceptional management team, a deep pipeline, and a platform technology that could enable success to be replicated over and over,” adding: “that is exactly what we saw in Nuvation.”

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StageBio Acquires TPL Path Labs to Expand its Footprints Globally

Shots:

  • StageBio and TPL Path Labs offers an expanded array of histopathology, molecular pathology, and related solutions to biopharma, medical device and academic researchers across the US, EU, and other countries
  • The acquisition expands StageBio’s pre/ clinical laboratory resources, GLP/GCLP-compliant lab facility and staff in Germany tits existing 6 GLP-compliant lab facilities and 2 GLP specimen archive sites in the US
  • The acquisition enhances StageBio ability to support clinical investigators in the areas of biomarker development, TCR and immunohistochemistry

Click here ­to­ read full press release/ article | Ref: PRNewswire | Image: Harman Professional Solutions

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M&A Experts ‘Can’t Recall a Time When Demand Has Been Higher’ in Sizzling In-Home Care Market

M&A activity across home health, hospice and in-home care appeared to be “business as usual” at the start of 2020. COVID-19 froze the market in March, however, causing both buyers and sellers to bide their time.

But dealmaking action is finally starting to heat up again, multiple M&A experts confirmed to Home Health Care News.

In the past few weeks alone, for example, Charter Health Care Group announced its purchases of Vitality Home Healthcare and Heartwood Home Health & Hospice. Meanwhile, Bridges Health Services announced a series of mergers with various home health and hospice providers. Most recently, Chicago-based private equity firm the Vistria Group agreed to sell St. Croix Hospice to an affiliate of investment company HIG Capital.

To get a better understanding of the developing M&A market, HHCN asked several experts to provide insight into what they are currently seeing in the final months of 2020. They also touched on 2021 expectations.

* * *

I’ve been selling home health agencies since 2006, and can’t recall a time when demand has been higher. Since July, we have received more calls from both strategic and financial buyers looking for home health than I can ever recall in a three- or four-month period.

While hospice M&A has dominated the spotlight these past couple years, home health M&A has cooled off. The uncertainty of the Patient-Driven Groupings Model (PDGM) caused both the strategic and financial buyers to hold off on any significant home health investments until after dust settled on the overhaul. We expected buyers would be ready to engage in the second quarter of 2020, but COVID-19 delayed that by a couple months in April and May.

With the public companies, which are the ultimate consolidators, the long-term strategy remains the same. They want to have all three legs of the stool: home health, hospice and personal care. And they want that in each of the markets they serve. As a practical matter, most of these companies are really focused on filling out the skilled side first. As recently as three years ago, most of these strategic buyers had a significantly larger home health presence than hospice. That has changed.

As a result of the aforementioned hospice M&A activity and a lot of denovos, many of these strategic buyers are now shifting their attention back to penetrating new markets via home health acquisition, which they will then complement with hospice and at some point, plus personal care.

My crystal ball is clouded somewhat with an election less than a month away and a threat of another significant COVID outbreak, but I’m going to go out on a limb and speculate we will see near-record — if not record — home health M&A activity between Q4 2020 and Q1 2021.

— Cory Mertz, managing partner at Mertz Taggart

* * *

In order to provide an appropriate context to understand how 2021 is setting up, we must first look back to this time last year. There was a mixed level of excitement regarding the forecasted 2020 home health merger and hospice acquisition marketplace.

Home health owners were facing PDGM implementation with certain uncertainty. Hospice owners were enjoying uncounted unsolicited calls and emails from buyers asking for “just a few minutes of their time.” A tale of two cities!

Since mid-March, the COVID pandemic “tripped the breaker” on scheduled and intended home health and hospice deals — or did it? Data researched and compiled exclusively by The Braff Group may come as a surprise to some.

Home Health’s expectation for a “down” year appears to be on track as expected; 42 projected deals vs. 60 transactions in 2019. Similarly, during the past five years, we’ve documented 296 completed deals; averaging just under 60 per year.

Looking ahead to 2021, home health will start off slow but pick up greater deal activity as the year unfolds, especially for mid- and larger-size agencies.

There are several reasons for this. Sellers, as well as buyers, will be well past the initial shock of dealing with COVID-19 and have settled into new daily norms and routines. While we have not completely recovered, many agencies have returned to pre-COVID levels of activity. Once preoccupied within their own portfolio companies, private equity firms now are back aggressively looking to build up their pipelines and line-up deals to get done. By many indicators, home health, and especially hospice valuations remain at all-time highs.

— Mark Kulik, managing director at The Braff Group

* * *

I do believe we will continue to see in-home care M&A acquisitions pick up. I believe that dual-service-line providers will continue to get more traction in the market. Hospice continues to be a valuable target for both strategic and sponsor buyers. We believe that home health-only agencies will continue to be challenged with admissions and the PDGM RAP reductions in cash flow.

According to a survey by the National Association for Home Care & Hospice (NAHC), almost 80% of home health agencies have experienced a decline in admissions due to the pandemic, with a majority of agencies reporting a decline of greater than 15%. Although elective procedures and routine visits are beginning to open up across the U.S., we are still seeing agencies struggle with therapy-heavy episodes and facility-based patient admissions. With the decrease in admissions, timing for presenting the company to buyers may cause them some reservations until the agency has proven stabilization related to admissions and Low Utilization Payment Adjustments (LUPAs).

In regard to the future of dealmaking in this space, agencies with both home health care, private duty and hospice service lines will be more eye-catching to potential buyers. Diversification of service lines will remain attractive.

— Tom Maxwell, co-CEO at Maxwell Healthcare Associates

* * *

With the onslaught of the COVID-19 pandemic in early March, it quickly became pretty clear that M&A activity generally, as well as with in-home care, was going to slow down significantly through the balance of Q1 and likely until the middle part of Q2. We thought we would begin to see an uptick in deal activity around mid-June and after, and that assessment has more or less turned out to be accurate.

While business travel and group meetings have continued to be on-hold for many, sourcing deals, discussions among transactional parties, diligence and other deal-related activity has adapted to the new “normal” through virtual meetings, conference calls and increased use of outside support such as law firms like ourselves and other industry transactional advisors and consultants.

Since mid-June, we have seen a marked increase in “deal talk” among sellers, buyers, bankers, investors and lenders both in home care and hospice, and we are currently working on a number of home care and hospice transactions across the country.

As transaction parties have begun to understand better some of the COVID-19 related factors and issues and their impact on deals, valuations have stabilized and in some cases increased. We expect to see a continuing surge of deals as both PE and strategic players seek to add bolt-on transactions in their markets and additional platforms where available.

Capital remains generally available to acquirors, and both home care and hospice are being seen as more stable health care verticals with the ability to give patients an alternative environment to group settings like hospitals and nursing homes. That is an additional important consideration to patients and payers in this COVID-19 era.

In sum, all indications are that absent a systemic disruption, home care and hospice deal activity should continue to be active through 2020 and well into 2021.

— Les Levinson, co-chair of the national health care transactions practice at Robinson & Cole LLP

* * *

At the onset of the coronavirus pandemic, there was uncertainty of the impact of the virus across all sectors of the health care industry. The practicalities of country-wide lockdowns, coupled with high-risk patients who were reluctant to allow providers into their homes, led to weaker performance for in-home health care companies. For companies that qualified, government stimulus in the form of Paycheck Protection Program (PPP) loans alleviated cash flow concerns and allowed many providers to weather the storm. As a result, M&A activity slowed and deal activity was put on hold.

We are eight months into the pandemic, and M&A activity has accelerated. Transactions that were on hold are ramping up. Valuations are strong. Buyers are becoming more active as additional investment opportunities arise, and the upcoming U.S. presidential election seems to be motivating dealmakers to close deals before the end of the year.

In-home health as a “buy-and-build” strategy is attractive to investors as the sub-segment is highly fragmented. Buyers executing a consolidation strategy backed by a scalable platform for growth and supported by strong processes and systems, along with a well thought-out integration plan for acquisitions to achieve synergies, should experience robust investment returns.

— Claudine Cohen, managing principal, transactions and turnaround advisory at CohnReznick

* * *

It is a sobering truth that if you follow the money, you usually find the answer, or at least the motivation. Currently, investors are deploying massive amounts of capital to acquire home care agencies. The interest is at record levels. The money is telling us that we’re on the threshold of a golden age for home-based care. The growth of home care will be of great benefit to the patients. Let’s hope this growth trend continues.

— Andre Ulloa, principal at American Healthcare Capital

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Endo to Acquire BioSpecifics for ~ $540M

Shots:

  • Endo to acquire all the outstanding shares of BioSpecifics for $88.50/ share in cash, making a total deal value of $540M. The transaction is expected to close in late 2020 while Endo expects to fund the transaction with cash on hand
  • BioSpecifics receives a royalty stream related to Endo’s collagenase-based therapies, which include Xiaflex for Dupuytren’s contracture and Peyronie’s disease, and Qwo for cellulite, which is expected to be launched by Endo in spring 2021
  • Endo’s acquisition subsidiary will be merged into BioSpecifics, and the remaining shares of BioSpecifics will be canceled and converted into the right to receive the same consideration payable pursuant to the tender offer

Click here ­to­ read full press release/ article | Ref: PRNewswire | Image: Seeking Alpha

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Eli Lily to Acquire Disarm Therapeutics for ~$1.36B

Shots:

  • Lilly to acquire Disarm for $135M upfront and ~$1.225B as potential development regulatory and commercial milestones, making a total deal value of ~1.36B
  • The acquisition will expand Lilly’s R&D efforts in pain and neurodegeneration with the addition of Disarm’s preclinical SARM1 programs for axonal degeneration
  • Disarm is advancing its potent SARM1 inhibitors in preclinical development intending to deliver patients with peripheral neuropathy and other neurological diseases like ALS and MS

    Click here ­to­ read full press release/ article | Ref: Eli Lilly | Image: Eli Lilly

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LHC Group, Christus Health Expand Joint Venture Partnership

LHC Group Inc. (Nasdaq: LHCG) has inked another joint venture agreement.

On Thursday, the Lafayette, Louisiana-based home health, hospice and personal care services provider announced plans to expand its existing JV partnership with Christus Health, a nonprofit health system out of Irving, Texas.

LHC Group and Christus have been JV partners since 2017.

“Our experience working with [LHC Group] in other communities has proven that they work hard to invest and grow services that are vital to the community, like home care and hospice,” Christus Health Chief Strategy and Network Officer Paul Generale said in a press release announcing the news.

Specifically, the JV expansion adds a hospice provider in San Marcos, Texas, to the LHC Group-Christus partnership. The expansion agreement is expected to be finalized on Nov. 1, according to the organizations.

Once it is completed, LHC Group’s JV with Christus will include 22 home health, hospice and palliative care locations across three states. It also includes a number of community-based and long-term acute care locations.

In total, LHC Group is the preferred joint venture partner for almost 400 U.S. hospitals and health systems. The company signed its first JV in 1998 with Opelousas General Hospital.

While LHC Group operates across 35 states and Washington, D.C., it has been a hyper-local focus that has made its JV strategy so successful, according to Chairman and CEO Keith Myers.

“The real key to success is being able to realize that all health care is local and creating a model that works for that [particular] community,” Myers said last month at the Home Health Care News FUTURE conference. “Rather than thinking that you’re such an expert in everything and trying to deploy a one-size-fits all model.”

On its end, Christus Health operates more than 600 services and facilities, including more than 60 hospitals and long-term care facilities. It also oversees more than 400 clinics and outpatient centers, with dozens of other health ministries and related ventures.

The health system’s relationship with LHC Group has been one of its strengths while navigating the COVID-19 pandemic over the past several months, it noted in the press release.

Prior to the Christus expansion, LHC Group’s most recent JV moves included two new agreements in Georgia.

At FUTURE, Myers said he remains bullish on the JV strategy for the rest of 2020 and beyond. The company’s strong JV outlook is partly due to home health’s increasingly important role in managing complex patient populations and succeeding in emerging payment models.

“We’re taking more acute patients with each passing year,” Myers said. “We’ve moved from cost reimbursement to prospective payment, now to being not just a participant but, in many cases, the manager of bundles and value-base models. I think bringing all of that expertise to the table is important to our joint venture partners.”

In most of its JVs, LHC Group has at least two, though often three, of its service lines active with a single partner. 

“I think what we provide is more up to date, cutting-edge support for them, because this industry is changing so fast,” Myers said at FUTURE.

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WellSky to Acquire CarePort from Allscripts in $1.35B Deal

WellSky announced Tuesday it has entered into an agreement to acquire CarePort Health from Allscripts Healthcare Solutions (Nasdaq: MDRX), a health care information technology provider. The deal is for $1.35 billion, according to Allscripts.

WellSky is an international software and professional services company with clients that include home health providers, hospital systems, blood banks, labs, hospices, government agencies and human services organizations. The company is jointly owned by private equity firms TPG Capital and Leonard Green & Partners, which teamed up with WellSky this July.

Boston-based CarePort is a care coordination software company that connects health care providers and payers, an increasingly important function as Medicare Advantage enrollment continues to soar and as the U.S. health care system steadily shifts away from fee-for-service models.

Currently, CarePort serves 1,000 hospitals and health systems, plus 110,000 post-acute provider locations.

CarePort was an attractive acquisition target for WellSky because of the natural alignment between both organizations, Bill Miller, CEO of WellSky, told Home Health Care News in an email.

“WellSky is committed to investing in care coordination and interoperability solutions, and CarePort was the obvious choice — based on its superior technology, market leadership and national presence,” Miller said. “We’ve been impressed with CarePort’s proven track record as the leading post-acute care coordination platform in the U.S.”

CarePort’s $1.35 billion price tag represents more than 13 times the company’s revenue over the past 12 months. It’s also roughly 21 times CarePort’s non-GAAP adjusted EBITDA over the trailing 12 months

As part of the deal, CarePort’s customers and more than 200 employees will join WellSky.

“This agreement is another all-around win for Allscripts, as it unlocks significant value for our shareholders, enables us to increase our focus on our core business and brings our CarePort customers the benefit of continued investment under new and very strong ownership,” Rick Poulton, Allscripts president and CFO, said in the press release announcing the news.

For WellSky, the planned purchase of CarePort allows the company to better manage the acute care discharge process, as well as keep track of patients across post-acute care settings, including home health care.

Additionally, the deal will allow home health providers to streamline their referral management and intake processes, according to Miller.

“CarePort’s EHR-agnostic platform allows home health providers to effectively coordinate patient care through real-time collaboration with hospitals, health systems, ACOs, and other post-acute providers to close gaps in care and improve patient outcomes,” he said. “This collaboration has the potential to create a meaningful, measurable difference for patients, providers and payers across even more care settings.”

Overall, CarePort represents about 6% of Allscripts consolidated revenues. Allscripts reported Q2 2020 revenues of $406 million in July.

The sale is slated to close before the end of the year, subject to clearing customary regulatory hurdles. WellSky and CarePort will continue to operate independently prior to that time.

“Joining WellSky means that we can increase vital connections between acute, post-acute and community care providers to make a meaningful difference in the lives of more patients in more places,” Dr. Lissy Hu, CEO of CarePort, said in the press release.

WellSky’s plan to acquire CarePort is closely in line with leadership remarks following the news about Leonard Green & Partners. At the time, WellSky noted the new investment would help it expand current capabilities and service offerings, particularly when it comes to analytics, telehealth and payer relationships.

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Home Health Buyers, Sellers Headed Toward Frenzied Finish to M&A in 2020

Charter Health Care Group — a PE-backed post-acute care platform company with multiple locations across five states — announced Tuesday the acquisitions of both Vitality Home Healthcare and Heartwood Home Health & Hospice.

The news comes less than two weeks after Bridges Health Services similarly announced a series of transactions at the start of October. It likewise comes after The Pennant Group Inc. (Nasdaq: PNTG) closing on a new joint venture and making its own hospice acquisition.

While none of these deals are directly related, they signal a recent rekindling of the M&A fire across the home health and hospice spaces. Dealmaking experts are starting to notice, too, with some expecting a frenzied final few months of 2020.

“I was discussing this with my partner,” Rich Tinsley, president of M&A advisory firm Stoneridge Partners, said during last month’s Home Health Care News FUTURE event. “I’m expecting the end of this quarter and Q4 maybe being one of our strongest second halves of the year in the last decade. Volume is definitely picking back up and, speed is picking back up in transactions on deal flow.”

Originally, many home health and hospice insiders believed 2020 would be a record-setting year for dealmaking, partly due to the transition of the Patient-Driven Groupings Model (PDGM) and a handful of other major regulatory changes. But that historic M&A action hasn’t played out for a variety of reasons.

On one hand, many of the small- to mid-sized home health and hospice agencies that were likely going to come on the market this year haven’t due to the ongoing COVID-19 pandemic. Operators once interested in selling are now too focused on delivering care during a crisis, while formerly distressed businesses have been able to stay afloat through Paycheck Protection Program (PPP) money, Medicare loans and Provider Relief Fund grants.

At the same time, buyers looking to conduct traditional due diligence or “kick the tires” on acquisition targets haven’t always been able to because of travel restrictions, Tinsley noted.

“Everybody was expecting to have a lot of volume to the home health side, with lots of those smaller to medium-sized [deals],” he said at FUTURE. “Then as we kept going into the transition to the new payment system, COVID hit. Everything kind of went into quicksand from a deal perspective.”

Buyers and sellers of all shapes and sizes have clearly started to rise out of the muck in recent weeks, however.

In addition to the previously mentioned deals, for example, Cypress at Home announced its acquisition of All About Home Care Inc. on Oct. 5., while Nova Leap Health Corp. made home care acquisitions in the New England and South Central U.S. markets. Kindred Healthcare also announced the pending sale of its RehabCare business line to Select Rehabilitation this month.

Perhaps the largest of all the home health and hospice deals to take place this fall: The Providence Service Corporation’s (Nasdaq: PRSC) $575 million play for Simplura Health Group, a company that oversees a home health and personal care network spanning seven states.

“There was a four- to six-, maybe seven-week period of time when everything got frozen,” Tinsley said. “We’re just now getting out of that and things are moving.”

‘Not exactly the same deal’

It’s not just the confirmed deals that suggest the M&A landscape has started to heat up again. There have been rumors swirling around at least two noteworthy deals in the home-based care space.

Toward the end of September, reports surfaced that Centerbridge Partners and Vistria Group were joining forces on a $1.4 billion deal for Wellspring Capital Management’s Help at Home. Days later, sources familiar with talks said Anthem Inc. (NYSE: ANTM) was in “late stage” talks to acquire PE-backed CareCentrix.

“The COVID crisis has underscored how important home health is to the future of health care,” Kenneth Baer, a CareCentrix spokesperson, told HHCN at the time. “Based on that and the strength of our business, we have received many interesting inquiries, but we are focused on delivering better health for the thousands of patients who rely on us for care.”

Apart from direct acquisitions, general investment in proven home-based care businesses is picking up as well. Also in September, Liberty Lake, Washington-based Family Resource Home Care announced a new investment partnership with Great Point Partners, a health care-focused private equity group out of Connecticut.

Tinsley isn’t the only one to notice all of the action. Philip Feigan, managing partner of Polsinelli’s Washington, D.C., office, has also seen a clear uptick in transactions — with an important caveat.

“Over the last four weeks, they’re really picking up,” Feigan said at FUTURE. “They’re as strong as they’ve ever been. A lot of the deals that have stopped are looking a little different. When they come back, they’re not exactly the same deal.”

M&A legal hurdles

Although deals are starting to pick back up, negotiations and agreements likely look very different compared to years past, according to Feigan. In fact, some yet-to-be-finalized deals that took shape in late 2019 for 2020 may even see substantial changes.

“Prior to COVID, I think the legal, regulatory and even the tax [factors], were not necessarily driving the deals,” Feigan said. “They were just following the deals, making sure there is nothing that stopped the deal from happening. Now, there’s a lot more involved on the legal side because of the things that have happened over the last few months.”

PPP money, in particular, becomes a significant legal consideration in any deal.

Since the Small Business Administration (SBA) initiated the program, thousands of home-based care organizations have received PPP loans, which could range from less than $150,000 to millions of dollars.

Unlike other loan programs, PPP money is open to full forgiveness. Yet that forgiveness process hasn’t begun, so prospective buyers need to be aware of any PPP risk their acquisition target currently bears.

“The key that made it different from any other type of loan is if you used the money properly and followed the rules, you could get up to the entire amount of the loan forgiven,” Feigan said. “When you’re talking about doing an acquisition or selling your business, if either party has received a PPP loan, that can be a lot of money you’re talking about that’s at risk of forgiveness from the government.”

When PPP money is involved, Feigan recommends that sellers first seek SBA consent for a change of ownership. Along those lines, sellers should additionally secure the consent of the bank that handled the PPP loan and related paperwork.

From a buyer’s perspective, it may even be worth revisiting the timing of a deal so it can take place after loan forgiveness has been reached. Alternatively, a buyer should consider adding language to any deal clarifying who bears risk if a loan isn’t forgiven.

“There’s a whole new playbook for the PPP part of doing a deal that didn’t exist before,” Feigan said. “You don’t want to rely on what you’ve normally done in a transaction.”

Tax considerations

How common are PPP considerations in today’s home health and hospice deals? Stoneridge had just closed on eight transactions in the 60 days prior to Tinsley’s appearance at FUTURE — and all eight of those deals had some sort of PPP component.

Besides the immediate consideration, buyers and sellers in PPP-related deals also need to think about future tax implications, according to William Sanders, who chairs Polsinelli’s tax practice group.

Under U.S. tax law, loans that are forgiven typically fall into taxable-income territory. With PPP specifically, if a loan is forgiven, expenses that are usually deductible won’t be deductible, which has the same basic impact as making the receipt of the forgiveness taxable.

“What this means from an M&A-transaction perspective is that a seller needs to be aware of the fact that those expenses won’t be deductible by them in the pre-M&A closing period,” Sanders said at FUTURE. “And a buyer, on the other end, has to make sure that the documents will require the seller to exclude those expenses as deductions in the period prior to the transaction.”

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Medicare Advantage Startup Clover Health Slated to Go Public in a $3.7 Billion SPAC Deal

Clover Health recently announced that it will go public through a merger with a special purpose acquisition company (SPAC), Social Capital Hedosophia Holdings Corp. III.

“Going public will enhance our ability to execute on our mission of improving every life, providing significant capital for the company to scale and improve health outcomes for seniors across the United States,” Andrew Toy, president of Clover Health, told Home Health Care News in an email.

Clover Health is a San Francisco-based Medicare Advantage insurer. The company’s in-home care model utilizes technology, including data analytics and machine learning, to identify its highest-risk members. It then finds solutions to lower their risk of adverse health events.

Since its launch in 2013, Clover Health has raised more than $900 million. The company has 57,000 members across seven states.

The deal, which values Clover Health at $3.7 billion, is expected to provide up to $1.2 billion in cash proceeds. This includes up to $828 million of cash held in Social Capital Hedosophia Holdings’ trust account.

Additionally, Clover Health will receive up to $728 million of the transaction proceeds, and up to $500 million will go to the company’s existing shareholders.

Broadly, SPACs are an alternative to the traditional route to going public. SPACs raise money through an IPO and then search for an acquisition target. Once a merger has been completed, the target becomes a listed stock.

Over the past several years, Clover Health has been positioning itself to go public, according to Toy.

“We’ve generated incredible business momentum and have a well-defined and exciting growth strategy and a highly scalable approach,” he said. “We’ve also assembled a strong management team that has extensive experience across the health care and technology industries.”

As part of the transaction, Clover Health’s leadership team — including Toy and CEO Vivek Garipalli — will stay on and continue to serve in their roles. Chamath Palihapitiya, founder and CEO of Social Capital Hedosophia, will join Clover Health as a senior advisor to the management team.

The news of Clover Health’s plans to go public is fresh off the heels of a recent partnership with retail giant Walmart (NYSE: WMT). Last week, the company announced that it was teaming up with Walmart to make Medicare Advantage plans available in eight Georgia counties.

The Clover Health-Social Capital Hedosophia transaction is slated to close in the first quarter of 2021.

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Bridges Announces Series of Mergers; Pennant Lands Hospice Agency

Bridges announces series of mergers

Los Angeles-based Bridges Health Services has announced a series of new merger agreements.

In Nevada, Bridges will join forces with Las Vegas-based home health and hospice companies Gentlecare Home Health and Renaissance Hospice. Meanwhile, in California, the provider will merge with Supreme Healthcare Inc. and Supreme Hospice Inc.

All merger targets are Medicare-certified and provide community-based services with similar missions, cultures and visions for transforming health care, according to Bridges, a more than 10-year-old company with a national footprint.

Originally founded by Carolyn Romero, a home health and hospice nurse, Bridges provides a range of in-home health care services across its markets. In addition to its recent mergers, the provider also implemented a new artificial intelligence platform designed to help identify patients who are in critical need of their services as soon as possible in their disease trajectory.

“The traditional approach of our health care delivery system focuses on treatment rather than prevention,” Romero said in a statement. “At Bridges Health Services, we pride ourselves on integrating promotive, preventative, curative and palliative health solutions with the use of revolutionary AI technology and our highly skilled health care professionals.”

Bridges Health Services has also partnered with a crisis management team to help redefine its COVID-19 response. The provider hopes to strengthen its home health and hospice relationships with both assisted living and independent living facilities through the partnership.

Pennant lands hospice agency, closes Scripps JV

The Pennant Group Inc. (Nasdaq: PNTG) is back at it on the M&A front.

The parent company of affiliated home health, hospice and senior living companies, the Eagle, Idaho-based Pennant has acquired Harmony Hospice, located in Las Vegas. Prior to the transaction, Harmony was one of three affiliated hospice agencies Pennant acquired earlier this year, with the other two being Prime Hospice and Harmony Hospice of Arizona.

The closing of the Harmony deal was effective Oct. 1.

“We are thrilled to add Harmony Hospice to our growing presence in southern Nevada,” Pennant CEO Daniel Walker said in a statement. “This acquisition was not broadly marketed, but instead was sourced through our extensive local network.”

Pennant expects it will continue to find “many more opportunities” like the recent Harmony acquisition moving forward, Walker noted.

Overall, Pennant Group is a holding company of independent operating subsidiaries that provide health care services through 73 home health and hospice agencies, plus 54 senior living communities. Its network spans more than a dozen states, with a concentration across the South and Southwest.

In a separate transaction, Pennant has also closed on its previously announced home health joint venture with Scripps Health.

Select Rehab to purchase Kindred’s RehabCare

Kindred Healthcare has announced the pending sale of its RehabCare business line to Select Rehabilitation, further putting distance between former skilled nursing heavyweight Kindred and the sector.

The terms of the deal were not disclosed. Upon the deal’s completion, Illinois-based Select will emerge as an even larger player in the contract rehabilitation space, expanding its footprint from 35 to 43 states.

“Select’s acquisition of RehabCare presents exciting growth opportunities based on the companies’ shared cultural foundation of clinical excellence, quality care provision, and outstanding customer service,” Select CEO and co-founder Anna Gardina Wolfe said in a statement.

The combined company will employ 17,000 therapists and cover 2,300 sites of care — including skilled nursing facilities, senior living campuses, schools and home health agencies. Kindred and Select expect the deal to close sometime before the end of 2020.

Cypress at Home acquires home health agency

Cypress at Home, an aging services provider serving older adults in southwest Florida, is expanding in the home health space. It is doing so through its recently announced acquisition of the skilled home health service operations of All About Home Care Inc.

All About Home Care — accredited by Community Health Accreditation Partner (CHAP) — has been providing skilled home health services to the southwestern Florida market for 13 years. Its core offerings include post-hospital care, in-home monitoring services, home infusion, social services, wound care, skilled nursing care and more.

“Health care continues to experience a shift within the care environment as providers look to improve outcomes and lower the cost of care by changing how, when and where it can be provided,” Troy H. Churchill, CEO of Cypress Living, said in a statement. “This evolution has created an opportunity for Cypress at Home to create a new patient-centric approach to care, which wraps compassionate services and innovative solutions around the client to provide extra security and support while they are in their home.”

Adding skilled home health services to Cypress at Home will create a seamless, well-coordinated approach to care that supports aging-in-place for older adults, he added.

Cypress at Home is a nonprofit organization that’s under the Cypress Living umbrella.

Texas home health providers rebrands

Home Health Care of North Central Texas has officially changed its name to “GoJo Home Health.” The rebrand is due to the expansion of its service areas beyond north central Texas.

A division of Gordon Jordan Healthcare Management, GoJo Home Health has been serving North Central Texas patients in their homes since 2006. GoJo Home Health offers a range of medical, social and therapeutic treatments in the home setting.

Additional reporting by Alex Spanko, editor of Skilled Nursing News.

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BMS acquires MyoKardia, maker of drugs for cardiovascular disease, for $13.1B

heart, doctor, cardiac

The companies expect the deal to close in the fourth quarter. MyoKardia’s lead drug candidate is mavacamten, which it is developing for hypertrophic cardiomyopathy and plans to submit to the FDA in the first quarter of next year.

Recently Launched Alivia Care Plans to Enter ‘Saturated’ Home Health Market

Alivia Care Inc., a new operator in the senior care space, has plans to enter the home health market.

Launched at the end of September, Alivia currently provides hospice and palliative care throughout the Jacksonville, Florida, area. The company’s history is tied to Community Hospice & Palliative Care, which now provides care as Alivia’s subsidiary, serving 8,000 hospice patients and 9,000 palliative care patients annually.

Community Hospice & Palliative Care’s CEO, Susan Ponder Stansel, has joined Alivia as its president and CEO.

Aside from Alivia’s hospice and palliative care service lines, the company will provide home health care, private-duty nursing and personal care services moving forward. Alivia will additionally offer PACE programs and advanced care management in the future.

PACE — or Programs of All-Inclusive Care for the Elderly — is a comprehensive care model that often uses a combination of in-home care and center-based care to keep older individuals out of institutional settings.

“The goal was to create a care continuum as a whole, while paying attention to the individual products and give them the attention that they need to make sure that our quality and network keeps up with our goal to be innovative,” Ponder Stansel recently told Home Health Care New.

In creating a sort of one-stop-shop for aging services, Alivia has its eye on the future of how care will be delivered, according to Ponder Stansel. Increasingly, health system partners and payers are looking to team up with providers capable of caring for patients on a longitudinal basis.

“Part of it was to make sure that we are not just at the end of the waterfall, waiting for the fish to come over,” Ponder Stansel said, referring to Alivia’s roots in end-of-life care.

As far as home health care, Alivia’s interest was piqued when the company saw how more hospitals were beginning to move toward risk-based payments.

“We really want to be in the home health business, as well as have the home health capacities to allow us to do more of that advanced illness care, because we do see … a lot more interest in them moving to that risk-based payment,” Ponder Stansel said.

One of the biggest challenges Alivia has experienced in the home health space is figuring where its market opportunities are in an already saturated landscape.

From 2018 to 2019, the number of home health agencies dropped by about 3.6%, a decrease of 427 individual providers, according to the Medicare Payment Advisory Commission (MedPAC) 2020 data book. Since 2015, the home health subsector has contracted by more than 8%, with nearly 1,000 agencies exiting the market.

In light of this, Alivia has opted for acquisitions of existing entities over starting de novo locations, Ponder Stansel said.

“We figured that for us, the better way would be to go ahead and buy an existing book of business,” she said. “We weren’t starting cold.”

Looking ahead, Alivia is also paying close attention to how the Patient-Driven Groupings Model (PDGM) and other payment changes will shake out for the company’s home health business.

“It’s not just PDGM. There’s the pre-claim authorization,” Ponder Stansel said. “There’s a lot of pressure on home health care agencies. They have sort of a ‘death by 1000 cuts.’ For what we want to do with home health, PDGM is actually a good change because it incentivizes you to take those higher-acuity patients and not be so therapy-heavy, and that really that aligns with our serious-illness strategy very well.”

Additional reporting by Jim Parker, editor of Hospice News.

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BMS bulks up in cardio with $13.1bn takeover deal for MyoKardia

Bristol-Myers Squibb has said it will buy biotech MyoKardia in a $13.1 billion takeover that marks a step up in its development of cardiovascular drugs.

The all-cash deal is mainly about MyoKardia’s mavacamten drug that BMS thinks could be a first-in-class treatment for hypertrophic cardiomyopathy (HCM) – a form of heart disease – based on clinical data reported in the spring.

In the EXPLORER-HCM study, cardiac myosin inhibitor mavacamten improved exercise capacity, cardiovascular health scores like left ventricular outflow tract (LVOT) and overall health status in patients with obstructive HCM over placebo, setting up an FDA filing on the first quarter of next year.

HCM is a condition in which the heart becomes thickened without any obvious cause, and can lead to chest pain and shortness of breath, irregular heartbeats and even heart failure in severe cases.

BMS is a longstanding player in cardiovascular with drugs like Pfizer-partnered Eliquis (apixaban) and Sanofi-partnered Plavix (clopidogrel), but over the last few years has been directing its R&D dollars mainly towards oncology.

Its cancer franchise – headed by flagship immunotherapy Opdivo (nivolumab) – accounted for around 80% of BMS’ sales of $20 billion in the first half of 2020.

It does have a few cardiovascular candidates in clinical trials – cimlanod for heart failure and Johnson & Johnson-partnered factor XIa inhibitor BMS-986177 for thrombotic disorders in phase 2 trials for example – but its heart disease programmes are dwarfed by the dozens of candidates for blood cancers and solid tumours.

Adding mavacamten gives it a near-term product candidate with potential in additional indications like non-obstructive HCM, as well as other drugs in clinical development, including follow-up myosin inhibitors danicamtiv (MYK-491) for dilated cardiomyopathy and MYK-224 hypertrophic cardiomyopathy.

Cardiovascular diseases haven’t seen the dramatic strides forward in drug therapy that have transformed other illnesses like cancer in recent years, so MyoKardia’s programmes – which are both based on novel mechanisms of action – have been keenly anticipated by physicians and patients alike.

BMS has bought into MyoKardia’s cardiovascular pipeline around 18 months after the California-based biotech’s former partner Sanofi walked away from a partnership on those three drugs, reportedly because the biotech was reluctant to extend commercial rights covered by the deal.

It is paying $225 per share for MyoKardia – a 60% premium on its closing share price last week – and shows clearly that BMS chief executive Giovanni Caforio isn’t averse to pursuing further sizeable deals despite its $74 billion takeover of Celgene last year that has left it with a sizeable debt burden of around $47 billion.

“We are further strengthening our outstanding cardiovascular franchise through the addition of mavacamten, a promising medicine with the potential to address a significant unmet medical need in patients with cardiovascular disease,” said Caforio.

He added: “We have long admired MyoKardia and what they have done to revolutionise cardiovascular treatments through a precision medicine approach.”

After the EXPLORER-HCM readout, analysts at Cantor Fitzgerald suggested that mavacamten could make $2 billion or more in sales in obstructive HCM, with another $600 million or more from the non-obstructive HCM category if approved.

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BMS to Acquire MyoKardia for ~$13.1B

Shots:

  • BMS to acquire all the outstanding shares of MyoKardia’s common stock for $225.00/ share in cash, making a total deal value of ~$13.1B. The transaction is expected to be close in Q4’20
  • The acquisition will foster BMS’ CV portfolio with the addition of MyoKardia’s mavacamten. BMS expects to explore mavacamten in additional indications, including non-obstructive HCM and will develop MyoKardia’s two clinical-stage therapies, danicamtiv (formerly MYK-491) and MYK-224
  • Mavacamten is a potential first-in-class therapy with compelling data in the treatment of patients with symptomatic obstructive HCM. The NDA submission of the therapy is based on the EXPLORER-HCM study, which is expected to be submitted to the US FDA in the Q1’21

Click here ­to­ read full press release/ article | Ref: BMS | Image: MyoKardia

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STADA Expands its Specialty Footprint with the Acquisition of Lobsor Pharmaceuticals

Shots:  

  • STADA acquires Lobsar and its innovative therapy to foster its footprints in specialty pharmaceuticals. The acquisition complements STADA’s portfolio and expertise in the treatment of late-stage Parkinson’s disease
  • With the acquisition, STADA gain rights to a triple fixed combination (levodopa/carbidopa/ entacapone) delivered via modern pump technology, already launched in Nordic countries
  • Levodopa, carbidopa and entacapone infusion therapy is inserted in the small intestine through a discreet, wearable pump. The infusion is approved in Sweden, Denmark, Norway, and Finland, while STADA is currently submitting approval applications to launch the therapy in multiple EU markets

Click here ­to­ read full press release/ article | Ref: STADA | Image: S

The post STADA Expands its Specialty Footprint with the Acquisition of Lobsor Pharmaceuticals first appeared on PharmaShots.

Philips to Acquire Intact Vascular for $360M

Shots:

  • Philips will acquire Intact Vascular for $275M up front and deferred payments of $85M upon completion of the transaction. The transaction is expected to be completed in Q3’20
  • The collaboration will expand Philips’ image-guided therapy portfolio with the addition of Intact Vascular’s Tack endovascular system, that reinforces standard and drug-coated balloon PAD treatment results
  • Intact Vascular’s Tack implant is a minimal-metal, dissection repair device that provides precision treatment of peripheral arterial dissections following balloon angioplasty in ATK and BTK therapeutic interventions

Click here ­to­ read full press release/ article | Ref: Philips | Image: Philips

LHC Group, University Health Care System Announce New JV Agreement

LHC Group Inc. (Nasdaq: LHCG) has added another joint venture partner into its fold. 

The Lafayette, Louisiana-based home health, hospice and personal care services provider announced Thursday it has signed a definitive agreement to form a new JV with University Health Care System, one of the largest, most comprehensive health care organizations in Georgia.

University Health Care System is anchored by University Hospital, an 812-bed nonprofit acute care hospital serving Georgia’s Augusta-Richmond County and the surrounding region. The health system has three hospitals overall, with ancillary services ranging from home health and rehab, to primary care and specialty physician services.

LHC Group and its 32,000 employees care for patients in 35 states and Washington, D.C., reaching 60% of the U.S. population 65 and older. Teaming up with entities like University Health Care System is a core part of LHC Group’s strategy, as it is currently the preferred in-home health care partner for 350 hospitals around the country.

The newly announced JV will operate across eight cities in Georgia and South Carolina.

It will include 10 total locations: three University Health home health providers, three University Health home health branches, two LHC Group home health providers and two LHC Group hospice providers.

“We are pleased to join our new partners at University Health in announcing plans to expand the availability of vital health care services in the states of Georgia and South Carolina,” Keith Myers, LHC Group’s chairman and CEO, said in a statement. “With our combined experience and infrastructure, we will be able to offer more families and patients the high-quality, efficient, and effective in-home healthcare and hospice services they deserve.”

It is anticipated that the joint venture agreement will be finalized on Oct. 1, subject to customary closing conditions. Upon closing, LHC Group will purchase majority ownership and assume management responsibility of the JV.

LHC Group expects incremental annualized revenue from the joint venture of about $8.3 million.

“This partnership combines the expertise and experience of two high-quality medical providers, creating new opportunities to further develop and expand our in-home health care services to include hospice, completing University’s continuum of care,” James Davis, University Health Care System’s president and CEO, said in a statement. “The great success LHC Group has demonstrated with other partnerships has shown us that their focus on in-home medical services will move the safe, quality and compassionate care University is known for to the next level.”

While LHC Group has long invested in its JV strategy, it has seen even more interest in recent months due to the COVID-19 pandemic, according to the company.

Apart from Thursday’s announcement, LHC Group’s most recent JV move was its partnership with Orlando Health System in Florida.

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ACADIA Acquires CerSci Therapeutics for $52.5M

Shots:

  • ACADIA acquires all outstanding shares of CerSci for $52.5M. CerSci may receive up to $887M as development, commercialization milestones along with royalties on sales
  • The acquisition will boost ACADIA’s clinical pipeline with the addition of non-opioid pain therapies including CerSci’s lead candidate ACP-044
  • ACP-044 has demonstrated a promising effect in the P-I study with an anticipated initiation of P-II study in H1’21. The novel RSDAx MOA interferes with multiple pain pathways treating pain simultaneously

Click here ­to­ read full press release/ article | Ref: ACADIA | Image: San Diego Business Attorney

Bionano Genomics Acquires Lineagen to Facilitate the Clinical Adoption of Saphyr for Digital Cytogenetics

Shots:

  • Lineagen to receive $9.6M consisting of 6,167,510 shares of Bionano’s common stock, ~ $1.7M in cash and assumption of ~$2.9M in liabilities. The acquisition complements Binano by adding leading cytogeneticists, genetic counselors, laboratory operations and billing experts, clinical commercialization experts, and payor contracts
  • The acquisition expands Bionano’s Saphyr genome imaging platform by adding Lineagen’s diagnostics services business based on a menu of LDTs and other services performed in a CLIA-certified environment serving a $1B market
  • The addition of Lineagen gives Bionano a unique combination of centralized and decentralized solutions for genomics research and clinical genomics to support revenue growth

Click here ­to­ read full press release/ article | Ref: Businesswire | Image: Arup Laboratories

BMS swoops on Forbius, snaring another immuno-oncology player

With the ink barely dry on a deal to develop Dragonfly’s lead cancer immunotherapy, Bristol-Myers Squibb’s business development team has agreed to buy Canadian biotech Forbius and its pipeline of drugs for cancer and fibrotic diseases.

Since its foundation in 2011, privately-held Forbius has been working on drugs that inhibit TGF beta 1 and 3, two targets thought to play a role in protecting cancers from attack by the immune system and the development of fibrosis (scarring).

The financial basis of the deal remains under wraps, but BMS said it includes an upfront fee and future milestone payments tied to the TGF programmes.

Forbius has also been working on some other targets, including an EGFR-targeting antibody-drug conjugate (ADC), but these will be spun into another company that will remain in the hands of its current shareholders.

Forbius’ most advanced drug candidate is AVID200, a TGF-beta 1 and 3 inhibitor that already has clinical data in hand in studies involving patients with systemic sclerosis, an autoimmune disorder, and advanced solid tumours.

Just last week, BMS paid $475 million upfront to license Dragonfly Therapeutics’ DF6002, a long-lasting fusion protein that looks like the “tail” (Fc) end of an IL-12 antibody. The rationale behind the drug is that it causes the area around a tumour to become inflammatory, stimulating an immune response against the cancer.

Forbius’ drugs are closer to BMS’ core checkpoint inhibitor approach to cancer immunotherapy with PD-1 inhibitor Opdivo (nivolumab) and CTLA4-targeting Yervoy (ipilimumab), which work by taking the brakes off immune responses to malignant cells.

TGF beta is a cytokine that is produced in large amounts in the vicinity of tumours and is thought to suppress T cell-mediated immunity, by inhibiting the proliferation of T cells and preventing them from being activated to attack the cancer.

It’s also viewed as a “master regulator” of fibrosis, which means AVID200 and related drugs could complement BMS’ in-house activities in this area, which include drug candidates like pegbelfermin for non-alcoholic steatohepatitis (NASH), HSP47 for hepatic fibrosis and a JNK inhibitor for NASH and idiopathic pulmonary fibrosis (IPF).

BMS seems to be interested mainly in AVID200’s potential in cancer, however, at least initially. Its head of research and early development, Rupert Vessey, said Forbius’ drug may enhance the activity of drugs like Opdivo and allow the company to “serve more patients with cancer, including those who may not respond to immunotherapy.”

BMS is still only a few months into its $74 billion mega-merger with Celgene, which closed last November, but the latest moves shows that it is still interested in bolt-on deals to flesh out its cancer pipeline even further.

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Takeda agrees $2.3bn sale of Japanese consumer health unit

Takeda has joined the ranks of big pharma companies jettisoning consumer health businesses in order to concentrate on higher-margin prescription drugs.

The drugmaker is divesting Takeda Consumer Healthcare, which operates mainly in Japan, to private equity group Blackstone for 242 billion yen ($2.3 billion), with the deal expected to close in March of next year.

Takeda Consumer Healthcare sells OTC medicines and other health products with sales of 60 billion yen ($567 million) in fiscal 2019. Its top-selling products are Alinamin – a vitamin B1 preparation used to relieve eye fatigue and muscle pain that has been a staple for Japanese households for more than 60 years – and cold remedy Benza Block.

Takeda’s chief executive Christophe Weber

The deal adds to a drive at Takeda to pay down the sizeable debt it absorbed after taking over Shire in a $59 billion deal that closed in early 2019. It also comes after chief executive Christophe Weber said the sale of the consumer health unit was “unlikely” last year.

Since the mega-merger, Takeda has been steadily selling off over-the-counter (OTC) and mature prescription medicines on a piecemeal basis. Earlier this year it divested products with annual sales in Europe of around $230 million, plus two manufacturing plants in Denmark and Poland, to Danish drugmaker Orifarm in a $670 million deal.

That came after a $660 million divestment of OTC and prescription drugs – sold mainly in Russia and Commonwealth of Independent States (CIS) countries – to Germany’s Stada last year, and a similar $200 million sell-off to Acino in Near East, Middle East and Africa (NEMEA) countries.

The latest deal takes Takeda a big step closer to its strategic goal of divesting $10 billion in non-core assets, and Weber said it will allow the company to zero in on developing and selling medicines for its five key therapeutic areas – gastroenterology, rare diseases, plasma-derived therapies, oncology and neuroscience.

Weber added that Takeda Consumer Healthcare would benefit from the move as it deals with “an increasingly competitive consumer health care market in Japan.”

It’s the second transaction for New York-based Blackstone in Japan’s healthcare sector, coming after the private equity giant acquired specialty medicine and biosimilar company Ayumi Pharma last year for around $1 billion.

Atsuhiko Sakamoto, head of private equity for Blackstone Japan, said Takeda Consumer Healthcare is “well-positioned to grow its established brands in Japan and launch new and expanded product offerings,” adding: “we see tremendous potential for [the company] in Japan and throughout Asia.”

Other companies that have been exiting the consumer health business in recent years include Novartis, Merck KGaA, and Bristol-Myers Squibb as well as Pfizer and GlaxoSmithKline which have agreed to combine their respective business units into a joint venture intended for a future spin-off.

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Caring People Acquires Acappella In Home Care, Aging Care and AMR Care Group

Caring People is staying busy on the acquisition front.

In fact, the New York City-based Caring People has completed a handful of strategic deals — with a focus on care management organizations — in the last few months alone. The acquisitions consist of Acappella In Home Care, Aging Care LLC and AMR Care Group, all of which were purchased in separate transactions.

Financial terms of the deals were not disclosed.

Caring People is a portfolio company of private equity firm Silver Oaks Services Partners. The private-duty home care provider operates in New York, New Jersey, Connecticut, Florida and Texas, the latter state recently added to its geographic mix. Across its operations, Caring People serves an average of 1,700 clients per day.

Although Caring People CEO Steven East declined to disclose the financial terms of the deals, he told Home Health Care News that the transactions fell in-line with the current pricing parameters for private-duty home care assets.

“We feel very confident in the investment in those businesses,” East said.

Acappella In Home Care provides home health, hospice, private-duty home care and companionship services throughout 13 Texas counties.

“Texas is a terrific senior care market. It has very strong private-pay demographics,” East said. “At the beginning of 2020, I can’t say I could have predicted we’d be in Texas, but we’re not limited geographically.”

Meanwhile, Aging Care is a care management and non-medical home care company that operates throughout central Connecticut.

New York-based AMR Care Group is a care services company that enables seniors to age in place. The company is partly known for its Cultured Companions program — a service that connects older artists, musicians, professors and others with younger counterparts in their respective fields.

On its end, AMR Care Group had grown at a 97% clip from 2017 through last year. In 2018, the company’s annual revenue checked in at about $2.2 million.

“I don’t think there’s been a magic bullet to our growth,” the company’s founder and CEO Anne Markowitz Recht told HHCN last September. “There’s obviously a huge need for home care services, which everybody knows about. Beyond that, it’s just doing the right thing, expanding our business and giving clients what they want.”

Along with being a great cultural fit, all three companies were attractive acquisition targets because of their owners and infrastructure, according to East.

“We have a back-office support team that can scale and support new offices all over the country,” he said. “With these three acquisitions, what was attractive to us was that they had very like-minded owners, who all stayed on with the organization in different roles. We felt that we could continue working with them and growing what they built.”

Acappella In Home Care founder Jo Alch, for example, has moved into the role of ambassador of brand development for Caring People.

The acquisitions also allowed Caring People to expand the company’s service lines.

“[Aging Care and AMR Care Group] had a core competency in providing care management services,” East said. “That’s a revenue vertical and a service line that we’re very interested in adding to our existing platform. Those acquisitions were strategic in terms of getting that talent.”

In addition to the three acquisitions, Caring People recently opened a new branch in New Haven, Connecticut, last month.

“We set up that branch because we knew there was a great caregiver population in that area,” East said. “We felt that having an office in that location would give us some better positioning for recruitment.”

Looking ahead, East says Caring People will continue to take a multi-pronged approach to growth.

“Acquisitions are definitely part of [our growth strategy], especially as we look at new and existing markets,” he said. “Adding new service lines to our existing business is also part of it, as well as de novo branches to service clients. We see it as a mix, but acquisitions are definitely an important component [of our growth strategy] — at least 50% or 60%.”

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J&J pays $6.5bn for Momenta and its inflammatory disease hopeful

Johnson & Johnson is to buy Momenta Pharmaceuticals for $6.5 billion, adding potential inflammatory diseases blockbuster nipocalimab to the pipeline at its Janssen pharmaceuticals unit.

J&J thinks that Momenta’s lead drug nipocalimab could be a kind of Swiss army knife drug that could be used across a range of inflammatory diseases including maternal-foetal disorders, neuro-inflammatory disorders, rheumatology, and autoimmune haematology.

The success of AbbVie’s Humira (adalimumab), which peaked at almost $20 billion in sales in 2018, demonstrates the potential of inflammatory diseases drugs to make mega-bucks.

Johnson & Johnson’s own Remicade (infliximab) was also a blockbuster several times over thanks to approvals in a range of inflammatory diseases including Crohn’s, rheumatoid arthritis and psoriasis.

But like the rest of this first generation of antibody-based drugs, Remicade has been hit by cheaper competition from biosimilars and the hunt is on for newer drugs that outperform standard therapy in terms of safety and efficacy.

Whether nipocalimab achieves the astronomical figures seen from Humira and Remicade remains to be seen – but the price J&J has paid shows the big pharma thinks it has considerable potential.

Momenta is best known for producing a generic version of Teva’s multiple sclerosis drug Copaxone (glatiramer), but nipocalimab is the company’s lead pipeline asset and the main rationale behind the acquisition.

Nipocalimab works against the neonatal Fc Receptor, a protein that can cause pathogenic antibodies to linger in the body and is thought to play a role in inflammatory diseases.

Diseases driven by the body’s own antibodies include myasthenia gravis, haemolytic diseases of the foetus, newborn, warm autoimmune haemolytic anaemia and a host of other conditions.

Around 2.5% of the population, around 195 million people worldwide, suffer from some form of autoantibody-driven disease, many of which are orphan and rare diseases.

Janssen thinks that individual indications could exceed $1 billion, as it looks to outgrow the pharma market in the long term.

The company said that while the deal is focused on nipocalimab, Momenta’s other approved drugs and pipeline assets will be assessed as more data becomes available.

Nipocalimab has recently received a rare paediatric disease designation from the FDA and the transaction will include full global rights to nipocalimab.

The transaction valuing Momenta at $52.50 per share is expected to close in the second half of 2020, subject to clearance by US antitrust regulators.

The costs are expected to increase J&J’s R&D spend, shaving off around $0.1-$0.15 from earnings per share in 2021.

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Johnson & Johnson to Acquire Momenta Pharmaceuticals for $6.5B

Shots:

  • J&J acquires Momenta in all-cash transaction at a price of $52.50/ share, making a total deal value as $6.5B. The transaction is expected to be closed in H2’20
  • The acquisition allows J&J to expand its portfolio for autoimmune diseases with the addition of Momenta’s Nipocalimab (M281) to its pipeline. In addition to nipocalimab, Janssen will acquire Momenta’s pipeline of clinical and pre-clinical assets
  • Janssen plans to retain Momenta’s presence in Cambridge, Massachusetts which will increase J&J footprint and capabilities in the key innovation hub. Nipocalimab provides an opportunity for Janssen to deliver transformative treatments in autoantibody-driven autoimmune diseases

Click here ­to­ read full press release/ article | Ref: PRNewswire | Image: Canva

Online Caregiver Platform Carely Acquires CareGiving.com

Carely Inc. — an online referral platform for both caregivers and professional care providers — has announced it has an agreement in place to acquire CareGiving.com, an online community for family caregivers.

The acquisition will help Dayton, Ohio-based Carely with its ultimate goal of enhancing the family caregiver experience through its platforms, Carely CEO and founder Mike Eidsaune told Home Health Care News.

Through an online platform and mobile application, Carely aims to simplify the navigation of the caregiver workforce for providers, caregivers and families.

Its main investor — Guidance Health — helped facilitate the deal. It came about because Denise Brown, CareGiving.com’s founder, reached out to Eidsaune to suggest a deal in the first place.

“She said to me, ‘Hey, listen, I know you guys really understand the technology side of this. If CareGiving.com is going to have a chance competing with what’s out there today in terms of online search and caregiver support, it’s going to need a higher level of sophistication,” Eidsaune told HHCN. “It was good timing.”

CareGiving.com will be revamped under the support of Carely, but will continue to act as its own website despite the sale.

It will help offer “both community and tailored resources for caregivers,” aiding their decisions when selecting care facilities and families as well as offering solutions to issues and other general support.

“We are keeping a distance,” Eidsaune said. “Other than it being a part of our general ecosystem, the site will remain relatively independent.”

The transaction was completed on Aug. 1. Financial terms of the deal were not disclosed.

One of the main drivers of Carely and Eidsaune’s mission is fixing the online environment for caregivers. Right now, it’s driven by corporate interests that turn into sales calls and the wrong incentives, he said.

“It’s our sort of core belief that [these sites] don’t necessarily have the best interest of the consumer in mind when they’re making connections to providers,” Eidsaune said.

Carely is aiming to become not only an alternative solution to those sites, but the antidote to them.

“I shouldn’t have to give up my contact info and become a target, just to get a list of potential resources in my area. That to me doesn’t feel right,” Eidsaune said. “[We want] consumers to have the most real, up-to-date, clear picture and understanding of what each organization is all about.”

On the other side of the coin, that also helps providers paint a clearer picture of themselves moving forward.

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Sanofi to Acquire Principia Biopharma for ~$3.68B

Shots:

  • Sanofi to acquire Principia Biopharma in an all-stock transaction, at $100/share making total deal value ~$3.68B in cash. The transaction is expected to be completed in Q4’20
  • The focus of the acquisition is to strengthen its R&D areas of autoimmune and allergic diseases with the expansion of the SAR442168 development program into CNS disorders. Additionally, the deal also adds rilzabrutinib to Sanofi’s portfolio of immunology and inflammation indications
  • The Principia’s BTK inhibitor ‘168 is developed using its Tailored Covalency platform and was evaluated in P-IIb study for MS leading reduction of 85% Gd-enhancing T1 hyperintense lesions vs PBO. In 2017, Sanofi signed exclusive WW license agreement with Principia to develop and commercialize BTK inhibitor ‘168 in MS and other CNS diseases

Click here ­to­ read full press release/ article | Ref: Sanofi | Image: Principia Biopharma

Sanofi adds BTK inhibitors to pipeline with $3.68bn Principia Biopharma acquisition

Sanofi is to buy Principia Biopharma for up to $3.68 billion, adding a potential multiple sclerosis drug to its pipeline.

The French pharma said it will pay $100 per share in cash for San Francisco-based Principia, which specialises in Bruton’s kinase (BTK) inhibitor drugs, after the deal was unanimously agreed by both boards of directors.

Sanofi’s acquisition builds on a partnership to develop central nervous system drugs that began in late 2017.

In a statement Sanofi said that the acquisition will give it full control of the brain-penetrant BTK inhibitor, SAR442168, making marketing more efficient and eliminating any royalty payments due under the 2017 agreement.

The drug known for short as ‘168 reduced multiple sclerosis brain lesions by 85% compared with placebo in a phase 2b trial.

Phase 3 development has begun and will comprise four pivotal trials across the MS disease spectrum.

Another of Principia’s BTK inhibitors, rilzabrutinib, is being tested in phase 3 for patients with moderate to severe pemphigus, a rare and debilitating autoimmune disease that causes blistering of the skin and mucous membranes.

Phase 3 development in the bleeding disease thrombocytopenia is expected to begin by the end of the year as long as COVID-19 does not impact on trials and there is also an ongoing phase 2 development programme in various other immune diseases.

Principia also has a topical BTK inhibitor, PRN473, which is in phase 1 development for immune diseases that could benefit from local application to the skin.

The deal follows Sanofi’s announcement late last year that it is rethinking its R&D operations, turning its back on diabetes and focusing on badly needed “transformative” therapies and maximising the potential of its asthma and eczema drug Dupixent.

CEO Paul Hudson, who was appointed to the role in June last year, has already acquired the oncology firm Synthorx and last month signed a potential $2 billion collaboration with Kymera Therapeutics to develop immune-inflammatory drugs.

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‘Cautiously Optimistic’: Home Health Insiders Believe M&A Will Pick Up in Late 2020

M&A has been quiet in home health care for the most part, mostly due to the implementation of the Patient-Driven Groupings Model (PDGM) and the COVID-19 virus.

Each has created uncertainty, though it was the former that kicked off the quiet M&A environment starting last year. PDGM put a halt to a lot of activity beginning in 2019, when the new payment model became a forthcoming reality to prospective buyers.

That uncertainty has brought valuation gaps between buyers and sellers when working on — or trying to work on — deals.

Buyers assume the worst under PDGM, while sellers are going to assume the best, Cory Mertz, a managing partner at M&A advisory firm Mertz Taggart, said recently at the National Association for Home Care & Hospice (NAHC) 2020 virtual Financial Management Conference.

The first half of 2020 was supposed to be the time that gave sellers a chance to prove themselves under PDGM and get some useful data underneath their belts, but now COVID-19 has tossed any information gathering out by the wayside.

“It was really hard to get transactions done last year, and we expected that to continue into the first half of this year with home health,” Mertz said. “We thought we would start seeing a little bit of an uptick probably in the third quarter, but now that’s gotten delayed a little bit further because of COVID-19.”

Without a reliable track record to go by, it’s impossible to present a clear picture of an agency to the buyer.

PDGM made it hard enough. Now COVID-19 has thrown another variable into the equation — and an unpredictable one at that.

“It’s hard to get a good data set to value a business on,” Mertz said. “I think we’ll start seeing companies come to market on the home health side over the second half of this year, but I don’t know that we’ll see a big pickup in transactions because it takes five to seven months to get these closed.”

Assessing an acquisition without easily being able to find where the seller stands from a reimbursement standpoint post-PDGM is hard to manage.

As it pertains to COVID-19, one of the biggest challenges in M&A hasn’t been the virus itself.

Instead, it’s been the legislation that has come with it, which has blurred things further.

“The CARES act and the sequestration holiday came right around the time that we were expecting the Requests for Anticipated Payment (RAPs) phase-out to have the biggest cash flow impact on home health providers,” Kris Novak, VP of M&A at Amedisys Inc (Nasdaq: AMED), said at the Financial Management Conference. “So, I think that somewhat provided cash flow where it may have been slowing down.”

The relief provided by the Provider Relief Fund and the Paycheck Protection Program (PPP) have, in some instances, painted an artificial picture of an agency’s standing during the public health emergency.

Buyers will be waiting to see first how potential sellers performed under the first six months or so of PDGM. Then they’ll have to wait to see how they managed COVID-19 once the dust settles from all of the emergency legislation.

At least in some parts of the country, there’s still hope for activity to pick up on in the last few months of 2020, Novak said.

“I am cautiously optimistic — just from a deal flow perspective — that things will start to pick up again here towards the back end of the summer,” Novak said.

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The Pennant Group CEO: It’s Too Early to Draw Conclusions About PDGM’s Long-Term Impact

So far, the transition to the Patient-Driven Groupings Model (PDGM) has gone smoothly for many home health agencies, with a majority successfully avoiding questionable encounters and achieving staffing efficiencies across their operations.

Eagle, Idaho-based The Pennant Group Inc. (Nasdaq: PNTG) has seen positive results on its end, too, especially when it comes to coding accurately and keeping its Low Utilization Payment Adjustment (LUPA) levels relatively low. For those and other reasons, Pennant feels “increasingly confident” in its ability to adapt and thrive in the reimbursement environment, though plenty of uncertainty remains, according to CEO Daniel Walker.

“We believe it’s too early to draw conclusions about the long-term effects of PDGM,” Walker said Wednesday during a conference call to discuss the company’s second quarter financial results. “So far, our current results are ahead of expectations.”

The Pennant Group is a holding company of independent operating subsidiaries that provide health care services through 71 home health and hospice agencies and 54 senior living communities. Since 2019, it has added 21 home health and hospice operations to its footprint, recently completing deals for six more in Arizona, Utah and Idaho.

Overall, Pennant has operations across 14 states and several major markets.

Apart from avoiding LUPAs and coding accurately, Pennant is bullish on PDGM because of the progress it has made in terms of delivering high-quality care and lowering its rehospitalization rates. Additionally, Pennant has been helped by PDGM’s relatively higher reimbursement rates for neurological care and wound care, which it routinely provides.

“Part of the rebalancing of the reimbursement structure kind of moves away from the high therapy utilization, which we never were chasing,” Walker said. “And so I think we’re seeing the favorable side of that.”

While dealmaking opportunities have been few and far between during the ongoing COVID-19 crisis, Pennant’s leadership team predicts ample M&A action in months to come.

“We are pleased with the current strength of our balance sheet and access to capital, even after executing multiple transactions during the quarter,” Derek Bunker, Pennant’s chief investment officer, said during the call. “We think there are many more opportunities this year and beyond for growth through acquisitions.”

Based on the 2021 proposed payment rule issued by the U.S. Centers for Medicare & Medicaid Services (CMS), Pennant expects a 2.1% Medicare rate increase next year.

Ups and downs

The Pennant Group’s total revenue was $92.7 million in Q2 2020, an increase of $10 million — or about 12% — compared to the prior year’s quarter. The company’s home health and hospice services segment revenue was $58 million, an increase of $7.8 million — or nearly 16% — compared to Q2 2019.

When it comes to volume disruption, Pennant’s hospice average daily census was largely unaffected by the COVID-19 emergency. Home health volumes were a different story.

Total home health admissions were 5,259 in Q2 2020, while total home health Medicare admissions were 2,459. Volumes hit a low point in May, but have since rebounded and are up roughly 1.5% compared to pre-COVID levels.

“Our home health volumes experienced a V-shaped pattern that was driven primarily by stay-at-home mandates and the delay of elective procedures,” Walker said.

Still, Pennant estimates that it has experienced a potential COVID-related revenue loss of $8.1 million since the start of the pandemic through the end of the quarter.

While the company was eligible for federal relief grants through the CARES Act, it opted to reject and return all funding.

The post The Pennant Group CEO: It’s Too Early to Draw Conclusions About PDGM’s Long-Term Impact appeared first on Home Health Care News.

Medtronic to Acquire Companion Medical for Adding Smart Insulin Pen to its Diabetes Unit

Shots:

  • The acquisition will expand Medtronic’s capabilities to serve people using multiple daily injections (MDI) to manage diabetes with the addition of Companion Medical’s InPen to Medtronic’s portfolio. The acquisition is expected to be closed within 1-2mos.
  • Medtronic will advance the automation of insights and dosing capabilities to reduce the burden of diabetic patients. Additionally, Medtronic will expand the availability of InPen globally
  • InPen is the only US FDA-cleared smart insulin pen system paired with an integrated diabetes management app for providing support to diabetic patients regardless of how insulin is delivered

Click here ­to­ read full press release/ article | Ref: Medtronic  | Image: Diabetes Daily

Ligand to Acquire Pfenex for $516M

Shots:

  • Ligand to acquire all outstanding shares of Pfenex for $12/share in cash or $438 million in equity value with a 57% premium to the closing price of Pfenex’s stock on Aug 10, 2020. In addition, Ligand will pay $2/share or $78M as a CVR, making a total deal value up to $516M
  • The transaction is expected to be close in Q4’20. The acquisition will expand Ligand’s technology offerings by the addition of Pfenex’s Expression Technology
  • Pfenex’s technology is out-licensed for multiple commercial and development-stage programs while the Ligand will leverage its technology for additional licensing agreements. Pfenex’s expertise in the expression of complex proteins complements Ligand’s Ab and drug enabling technologies, building a comprehensive discovery and early-stage platform

Click here ­to­ read full press release/ article | Ref: Ligand | Image: Pfenex

Bayer to Acquire KaNDy Therapeutics for Augmenting its Women’s Healthcare Portfolio

Shots:

  • KaNDy to receive $425M upfront, ~$450M milestones until launch followed by additional commercial milestones. The transaction is expected to be completed in Sept’2020
  • The acquisition will add KaNDy’s menopause drug to Bayer’s portfolio. KaNDy has published results of its NT-814 in P-IIb study that demonstrated positive results in mod. to sev. vasomotor symptoms due to menopause with expected initiation of its P-III studies in 2021
  • Additionally, in early 2020, Bayer expands its partnership with Evotec to develop multiple clinical candidates for the PCOS and enters an exclusive license agreement with Daré for Ovaprene which is an investigational hormone-free monthly vaginal contraceptive, currently in development for the prevention of pregnancy in the US

Click here ­to­ read full press release/ article | Ref: Bayer | Image: KaNDy

Related News: Bayer Signs an Exclusive Option to License Agreement with Dare Biosciences to Commercialize Ovaprene in the US

Olympus to Acquire Arc Medical Design for Expanding its Product Portfolio

Shots:

  • The acquisition will expand Olympus’ offerings in GI therapeutic devices and the development of advanced colonoscopy tools with the aim of improving early detection and treatment of CRC
  • Olympus will obtain full rights to Arc Medical Design’s medical products and will convert its current exclusive distribution rights of Endocuff Vision to a full acquisition of the Endocuff family of products
  • Endocuff Vision is a device attached to the distal end of a colonoscope, designed to maintain and maximize visibility during colonoscopy. The Endocuff technology will increase the 11% ADR that will improve clinical outcomes, reduce overall costs and enhance QoL for patients

Click here ­to­ read full press release/ article | Ref: Olympus | Image: Olympus

Bayer adds menopause drug to pipeline with KaNDy acquisition

Bayer is to buy UK-based KaNDy Therapeutics in a deal worth more than $800 million, adding the biotech’s menopause drug to its women’s health pipeline.

Bayer will pay $425 million up front and potential milestone payments of up to $450 million until launch, followed by potential undisclosed “triple digit million” milestone payments once the drug is on the market.

The deal is expected to close next month, subject to customary conditions such as anti-trust approval.

At the beginning of this year, KaNDy completed a phase 2b trial of its first-in-class drug NT-814, showing activity against symptoms of the menopause such as hot flashes and night sweats.

A phase 3 trial is expected to begin in 2021 and the company says that the compound could generate peak sales of more than a billion euros globally.

If successful the company hope the drug will steal market share from hormone replacement therapies such as Pfizer’s Premarin, which has been on the market for decades and has several safety warnings, including endometrial cancer and heart disease.

Bayer is adding to its women’s health portfolio through strategic collaborations and acquisitions.

Earlier this year it announced the expansion of its partnership with Evotec with a new five-year collaboration, looking for several drugs to treat polycystic ovary syndrome.

Bayer’s exclusive license agreement with Daré Bioscience for the US market, signed in January 2020, is focused on its investigational, hormone-free, monthly vaginal contraceptive currently in clinical development for the prevention of pregnancy.

Based near GSK’s research base in Stevenage and headed by CEO Mary Kerr, KaNDy was spun out of NeRRe Therapeutics in 2017, itself a spin-off from GlaxoSmithKline following its decision to withdraw from neuroscience R&D in 2012.

By spinning off, KaNDy was able to focus on its lead drug NT-814, an oral first-in-class neurokinin (NK) 1,3 receptor antagonist which treats the postmenopausal vasomotor symptoms seen following the menopause, such as hot flashes and sleep disturbances.

The drug addresses vasomotor symptoms by modulating a group of oestrogen sensitive neurones in the hypothalamus in the brain called the KNDy neurons.

In menopausal women these become hyperactive due to the absence of oestrogen, disrupting body heat control mechanisms resulting in the debilitating symptoms.

Astellas in August last year announced it is beginning pivotal phase 3 clinical trials for fezolinetant, which could be considered a competitor although it only works against the NK3 receptor.

The post Bayer adds menopause drug to pipeline with KaNDy acquisition appeared first on .

How Home Health Agencies Can Demand Higher Valuations in M&A Deals

When it comes to acquiring home health care agencies, buyers can afford to be picky.

There are more than 10,000 home health providers nationwide, but typically, only a few dozen deals close per year. Between 2011 and 2014, the market saw an annual average of 80 transactions, according to data from the investment banking company Lincoln International. That number dropped to about 60 deals per year from 2016 to early 2020.

In other words, buyers looking to purchase a home health provider have thousands of options to choose from. Agencies, on the other hand, have less leeway.

However, there are a few key things home health acquisition targets can do to make themselves more attractive and drive up their valuations, according to Michael Weber, managing director of the health care group at Lincoln International.

“When you look at the number of agencies out there across the country versus the number of closed transactions per year, it’s extremely infinitesimal,” Weber said. “So it’s critical to know how buyers look at your agency, how they evaluate your agency, and what you can do to make your agency more attractive and more valuable to a buyer.”

Weber made those comments during a recent presentation at the National Association for Home Care & Hospice (NAHC) 2020 Financial Management Conference, which was held virtually due to the COVID-19 emergency.

He explained that buyers typically look at three main areas when evaluating a potential home health acquisition target: the agency’s annual income, its annual growth and any risks it brings to the table.

Generally, more income equates to a higher value, and the same is true for growth.

Meanwhile greater risk — whether real or perceived — lowers the valuation an agency can command.

“So what’s the valuation formula?” Weber said. “Income and growth [are] combined and multiplied times the buyer’s assessed risks, and that gives you the valuation of your agency.”

On a more granular level, valuation comes down to an agency’s sales, talent, processes and compliance, according to David Berman, principal of health care M&A at Simione Healthcare Consultants.

Regarding sales, agencies with diversified referral sources are most attractive to buyers. That is, agencies with more referral sources — as opposed to fewer — are generally considered to have a more stable future in store.

“The lower your risk, the higher your value,” Berman said during the presentation. “The more your referral sources are centralized into one, the higher the risk [and] the lower value. The second part is: Who has the relationship with a referral source?”

Like referral sources themselves, those relationships with referral sources should be various and diversified so they don’t disintegrate if and when one employee leaves.

In addition to illustrating that to buyers, it’s also important for an agency to demonstrate future opportunities in the market, showing that the market isn’t too saturated and that they have a proven ability for growth.

“I have a lot of buyers that come up to me and say, ‘Mark, I had a great year last year, we grew 29%,’” Weber said. “And I said, ‘Well, what happened the years before?’”

If an agency’s past is filled with inconsistencies, there’s no guarantee for the buyer that such growth will continue into the future. Instead, buyers are looking for consistent, sustainable growth.

Consistency is important in other metrics, too, Weber explained, noting that buyers like to see how acquisition targets compare to national benchmarks. For example, an agency is generally considered very attractive if it’s been able to grow revenue 10% to 15% per year, he said, and its EBITDA should be in the 12% to 16% range.

Above-average benchmarks aren’t always a guaranteed valuation driver, though.

“If you’re saying ‘Well, gosh, I’m doing better than the market. I get a premium. I’m doing 55% to 60% gross margin.’ Not so fast,” Weber said. “A borrower’s going to say, ‘Wait a minute: We know that Medicare is a national program, so how can you be outdistancing the national norms by 10 points? What are you not doing that you should be doing?’”

Talent metrics are also important. How long have key leaders been with the company? Does the provider have dedicated sales leadership? What does an agency’s turnover rate look like?

“Something that gets looked over too often is turnover rates,” Berman said. “It is really expensive to keep having to train and rehire … staff. The more you can keep your staff, the more efficient you’ll be able to provide care, and ultimately, the higher the value of your agency.”

Turnover of key leadership is especially important for financial buyers, such as private equity firms or platform companies, he explained. That’s the case because these entities are likely looking for an asset they can use as a starting point into which it can roll additional agencies.

Home health companies targeted by these buyers need to demonstrate strong leadership and processes that can be built upon.

“What they need from you as the seller is a solid management team, a solid revenue cycle, a good EMR, a good use of technology, solid intake and solid administrative functions,” Berman said.

Meanwhile, for strategic buyers already in the space looking to do bolt-on acquisitions usually prioritize gross margin, as they already have their processes in place.

Finally, compliance is important for all acquisition targets, as the buyer doesn’t want to have to worry about Medicare coming after its new asset in the future for its past indiscretions.

As such, home health companies that can show well established compliance programs and detailed, easily accessible electronic records can likely demand a higher value.

Additionally, sellers should be able to present two to three years of past financial statements and future projections, based on metrics and predicted headwinds, for the next three years.

The post How Home Health Agencies Can Demand Higher Valuations in M&A Deals appeared first on Home Health Care News.

Analysis: July Health IT M&A Activity; Public Company Performance

– Healthcare Growth Partners’ (HGP) summary of Health IT/digital health mergers & acquisition (M&A) activity, and public company performance during the month of July 2020.


While a pandemic ravages the country, technology valuations are soaring.  The Nasdaq hit an all-time high during the month of July, sailing through the 10,000 mark to post YTD gains of nearly 20%, representing a 56% increase off the low water mark on March 23.  More notably, the Nasdaq has outperformed the S&P 500 (including the lift the S&P has received from FANMAG stocks – Facebook, Amazon, Netflix, Microsoft, Apple, Google) by nearly 20% YTD. 

At HGP, we focus on private company transactions, but there is a close connection between public company and private company valuations.  While the intuitive reaction is to feel that companies should be discounted due to COVID’s business disruption and associated economic hardships facing the country, the data and the markets tell a different story.

While technology is undoubtedly hot right now given the thesis that adoption and value will increase during these virtual times, the other more important factor lifting public markets is interest rates.  According to July 19 research from Goldman Sachs,

“Importantly, it is the very low level of interest rates that justifies current valuations. The S&P 500 is within 4% of the all-time high it reached on February 19th, yet since that time the level of S&P 500 earnings expected in 2021 has been pushed forward to 2022. The decline in interest rates bridges that gap.”

Additionally, Goldman Sachs analysts also estimate that equities will deliver an annual return of 6% over the next 10-years, lower than the long-term return of 8%.  Future value has been priced into present value, and returns are diminished because the relative return over interest rates is what ultimately matters, not the absolute return.  In short, equity valuations are high because interest rates are low. 

What happens in public equities usually finds its way into private equity.  To note, multiple large private health IT companies including WellSkyQGenda, and Edifecs, have achieved 20x+ EBITDA transactions based on this same phenomenon.  From the perspective of HGP, this should also translate to higher valuations for private companies at the lower end of the market.  As investors across all asset classes experience reduced returns requirements due to low interest rates, present values increase across both investment and M&A transactions. 

As with everything in the COVID environment, it is difficult to make predictions with certainty.  Because the stimulus has caused US debt as a percentage of GDP to explode, there is an extremely strong motivation to keep long-term interest rates low.  For this reason, we believe interest rates will remain low for the foreseeable future.  Time will tell whether this is sustainable, but early indications are positive.

Noteworthy News Headlines

Noteworthy Transactions

Noteworthy M&A transactions during the month include:

  • Workflow optimization software vendor HealthFinch was acquired by Health Catalyst for $40mm.
  • Sarnova completed simultaneous acquisition and merger of R1 EMS and Digitech.
  • Payment integrity vendor The Burgess Group acquired by HealthEdge Software.
  • Ciox acquired biomedical NLP vendor, Medal, to support its clinical data research initiatives.
  • Allscripts divests EPSi to Roper for $365mm, equaling 7.5x and 18.5x TTM revenue and EBITDA, respectively.

Noteworthy Buyout transactions during the month include:

  • HealthEZ, a vendor of TPA plans, was acquired by Abry Partners.
  • As part of a broader wave of blank check go-public transactions, MultiPlan will join the public markets as part of Churchill Capital Corp III.
  • Also as part of a wave of private equity club deals, WellSky partially recapped with TPG and Leonard Greenin a rumored $3B transaction valuing the company at 20x EBITDA.
  • Edifecs partnered with TA Associates and Francisco Partners in another club deal valuing the company at a rumored $1.4B (excluding $400mm earnout) at over 8x revenue and 18x EBITDA.
  • Madison Dearborn announced a $410mm take private of insurance technology vendor Benefytt.
  • Nuvem Health, a provider of pharmacy claims software, was acquired by Parthenon Capital.

Noteworthy Investments during the month include:

Public Company Performance

HGP tracks stock indices for publicly traded health IT companies within four different sectors – Health IT, Payers, Healthcare Services, and Health IT & Payer Services. Notably, primary care provider Oak Street Health filed for an IPO, offering 15.6 million shares at a target price of $21/ share. The chart below summarizes the performance of these sectors compared to the S&P 500 for the month of July:

The following table includes summary statistics on the four sectors tracked by HGP for July 2020:


About Healthcare Growth Partners (HGP)

Healthcare Growth Partners (HGP) is a Houston, TX-based Investment Banking & Strategic Advisory firm exclusively focused on the transformational Health IT market. The firm provides  Sell-Side AdvisoryBuy-Side AdvisoryCapital Advisory, and Pre-Transaction Growth Strategy services, functioning as the exclusive investment banking advisor to over 100 health IT transactions representing over $2 billion in value since 2007.

LHC Group CFO: Historic Home Health Consolidation Opportunity Remains ‘Compelling as Ever’

Since the worst stretch of the public health emergency, LHC Group Inc. (Nasdaq: LHCG) has seen a decrease in weekly COVID-related missed visits and improved its average daily census. It has also added thousands of new physician referral sources, a win for the company considering many institutional sources are at a standstill. 

Those are just a couple positives highlighted by the Lafayette, Louisiana-based company during a Thursday earnings call on its second-quarter financial results.

“We’ve learned a lot about the resiliency of our organization through this public health emergency,” Chairman and CEO Keith Myers said during the call. “[We] have incorporated best practices adopted during this period into our care model and operating strategies.”

Since the end of June, LHC Group’s weekly COVID-related missed visits decreased from a high of roughly 8,600 to less than 300. Meanwhile, the company has seen a 9.3% increase in new referral sources compared to the same period in 2019.

“The momentum we established with new physician referral sources in January and February accelerated in April, hitting double-digit growth in both May and June,” Myers noted. “[That resulted] in nearly 4,000 new referral sources in the second quarter.”

Similar to LHC Group, many other home health providers have worked to expand relationships with physicians over the past few months, partly due to the realization that community-based referrals often mean a lower resource use and higher margins.

The company touted a number of other positives, too, including a proven ability to draw high-acuity patients away from skilled nursing facilities (SNFs), which will likely continue after the public health emergency ends.

“When we measure the number of SNF-diversion patients we’re taking, it’s not in the thousands,” Bruce Greenstein, chief strategy and innovation officer, said during the call. “But what’s happening is, we take in dozens and dozens [of patients]. We’re also bringing in new patients that would not have come to us otherwise.”

Still, LHC Group faced certain challenges and operational realities in Q2.

The cost of COVID-19

Overall, LHC Group incurred $27.3 million in COVID-19 costs related to personal protective equipment (PPE) and employee-compensation initiatives, including bonuses, increased pay and paid-time-off replenishments for front-line caregivers.

LHC Group also had to implement a number of cost-containment initiatives, including cutting non-essential travel and expenses. It also had to institute employee flexing, furloughs and other measures in some cases.

A home health, hospice and personal care services provider, LHC Group currently operates in 35 states and Washington, D.C. Overall, it posted net revenues of $487.3 million for the second quarter of 2020, down 5.9% from the same period a year ago.

The company’s home health business line brought in nearly 70% of that revenue total.

In terms of volume, its average daily census climbed from a low of 74,936 during the week ending April 18 to approximately 82,000 during the week of June 27. Its average daily census reached pre-COVID levels by the week of May 31, hitting 83,061 last week.

“This improvement has come despite some of our states being slow to fully lift bans on elective procedures,” Myers said.

All in all, organic growth in admissions for home health locations declined 4.7% for the quarter due to low points in April and May. The company fared better in June and July, with organic admissions growth up 7% and 8.5%, respectively, compared to the same periods last year.

That’s a good sign for the post-acute care provider, Jefferies analyst Brian Tanquilut told Home Health Care News.

“Volumes have recovered,” Tanquilut said. “If you look at their admission trends, it shows their average weekly admissions bounced back. That’s obviously a good sign that shows things are starting to recover.”

It’s also notable that LHC Group had a strong showing in states that have been highly impacted by the COVID-19 emergency. 

“They gave us the extra detail that they are showing pretty healthy growth in Florida, Texas and a few other states,” Tanquilut said. “It’s interesting, given that COVID-19 has obviously picked up in those markets in the last few weeks.”

To help offset COVID-19’s impact, LHC Group utilized the accelerated and advanced payment program from the U.S. Centers for Medicare & Medicaid Services (CMS). It received $310.7 million in funds under that program in April.

The company also received $88.7 million from the Provider Relief Fund, recognizing $44.4 million.

“[LHC Group] benefited from CARES Act grants. That helped them a little bit during the quarter as well,” Tanquilut said. “That probably holds true for a lot of providers.”

Consolidation opportunities

LHC Group’s joint venture partnerships with hospitals and health systems — a calling card for the company — has positioned it to play a meaningful role in the nation’s response to the public health emergency, according to Myers.

“While challenging, the COVID pandemic has provided a unique opportunity to highlight our clinical capabilities, how tightly integrated we are with our partners, how seamlessly we collaborate, and the extent to which they are leveraging our unique experience and capabilities to improve health outcomes, efficiency and patient satisfaction,” he said.

The company finalized a joint venture with Orlando Health — a not-for-profit health care organization that operates in nine Florida counties — on Aug. 1.

The deal is expected to bring in annual revenue of $3.5 million.

On the M&A front, LHC Group expects an acceleration of activity in terms of new hospital joint ventures and hospice acquisitions. It also still anticipates accelerated home health consolidation due to the Patient-Driven Groupings Model (PDGM) and the elimination of Requests for Anticipated Payment (RAPs). 

“It has not been on the front page with all the challenges and priorities we have needed to focus on throughout the pandemic, but historic consolidation opportunity within the highly fragmented home health industry is still there — and as compelling as ever,” President and CFO Joshua Proffitt said.

While PDGM has had a bigger impact because of the coronavirus, LHC Group remains confident in its ability to operationalize and mitigate the financial effect of the model moving forward.

The post LHC Group CFO: Historic Home Health Consolidation Opportunity Remains ‘Compelling as Ever’ appeared first on Home Health Care News.

Siemens Healthineers to Acquire Varian for $16.4B

Shots:

  • Siemens Healthineers to acquire Varian in an all-cash transaction, at a price of $177.50/ share with 42% to the 30-day volume-weighted average closing price of Varian’s common stock as of July 31, 2020, making a total deal value ~$16.4B
  • The transaction is expected to be closed in H1’21. The combined company will offer an integrated platform of end-to-end oncology solutions to addressing the complete continuum of cancer care, from screening and diagnosis to care delivery and post-treatment survivorship
  • Varian and Siemens Healthineers will lead the digital transformation of oncology healthcare, enabling more efficient diagnosis, increased treatment quality and access, personalized precision cancer care, and improved outcomes for millions of patients worldwide

Click here ­to­ read full press release/ article | Ref: Varian | Image: Varian




COVID-19, PDGM to Drive Home Health Deal Activity Up While Pushing Valuations Down

The COVID-19 emergency has slowed mergers-and-acquisitions activity in the home-based care space, largely due to travel restrictions, general sector uncertainty and the shifting priorities of top leadership.

However, interest in home-based care deals remains robust and valuations remain high. In fact, M&A experts expect deal activity to pick up dramatically come fall 2020 and beyond.

“The cash assistance that came from COVID-19 kind of masked the cash flow problems that we expected providers to have from the Patient-Driven Groupings Model (PDGM),” Stoneridge Partners President Rich Tinsley said. “I would expect after August [or] September you’re going to start seeing those agencies have some [difficulties] … as that cash burns off. … In so doing, I think you’re going to see those agencies come back out to market.”

Tinsley made those comments Tuesday during a presentation at the National Association for Home Care & Hospice (NAHC) 2020 Financial Management Conference, which was held virtually this year due to the COVID-19 emergency.

Struggling agencies will likely come to market with lower valuations, presenting unique, affordable opportunities for private equity companies and strategic buyers looking to make a deal.

Those opportunities are especially appealing considering the fact that home health services are in high demand amid the coronavirus. The COVID-19 emergency has pushed more and more long-term and post-acute care into the home and out of institutional settings to keep seniors safe.

More than half of the states in the country have rising COVID-19 case counts in nursing facilities, according to new same-store data compiled by the National Investment Center for Seniors Housing & Care (NIC).

On top of that, home health and hospice valuations reached an all-time high in the first half of 2020, according to a recent report by PricewaterhouseCoopers’ (PwC) Health Research Institute. Multiples hit 29 times in the first six months of the year, up from the previous high of 26 times in 2019.

Those figures are in reference to LTM EV/EBITDA.

PDGM and the coronavirus could help drive down those multiples — or at least, that’s what some buyers are hoping, according to David Berman, principal of health care M&A at Simione Healthcare Consultants.

“Moving forward into the next hundred days and having some conversations with some active buyers in the past, they expect Q3, Q4 and Q1 of 2021 to be very active on the M&A side,” Berman said during the presentation. “I don’t think anybody’s going to be looking to overpay for a B- or C-level asset. … People are going to be looking for value.”

While some private equity companies could be willing to pay more, he noted that most buyers are looking to drive down the multiples in the home health space.

Buyer considerations

Even though providers will come to market at a lower price than usual, don’t expect buyers to jump on every affordable agency they see. There are a number of considerations in play for acquiring entities to ponder before diving in.

“It’s trite to say, ‘One plus one has to equal more than two,’ but in the M&A world, it has to equal more than two,’” Berman said. “Otherwise, why do the deal? There has to be gained synergies.”

Those synergies can be expense savings, revenue growth or market expansion opportunities, just to name a few examples. In addition to identifying potential synergies, another important consideration is how long it will take for those synergies to be realized, Berman said.

Buyers will also be conducting other typical pre-transaction due diligence activities, such as working to understand an agency’s workflows, culture and financials. On top of that, they’ll be looking at new COVID-19 specific considerations.

For example, does the potential acquisition target have a PPP loan? If so, that introduces new risk for the buyer.

The post COVID-19, PDGM to Drive Home Health Deal Activity Up While Pushing Valuations Down appeared first on Home Health Care News.

Humana Helps Fast-Track In-Home Primary Care Company Heal’s Growth with $100M Investment

Health and well-being company Humana Inc. (NYSE: HUM) has spent the past few years adding to its health care services portfolio while aggressively investing around a home-based care strategy.

The Louisville, Kentucky-based company has now revealed its latest step in that direction. On Wednesday, Humana announced a wide-ranging strategic partnership with Heal, the in-home primary care company formed in 2014 by nephrologist Dr. Renee Dua and her husband, Nick Desai.

As part of the newly announced strategic partnership, Humana will invest $100 million into Heal, fast-tracking the Los Angeles-based startup’s growth plans and propelling it into several major new markets. Susan Diamond — segment president of Humana’s home business — will also join Heal’s board of directors as part of the collaboration.

Desai, who serves as Heal’s CEO, described the addition of Diamond and her “unparalleled expertise” as a key perk for his company and its ability to make doctor house calls mainstream again.

Residential primary care visits were common in the 1930s and earlier, when roughly 40% of all patient-doctor visits took place in the home, according to researchers.

“Humana’s partnership and investment accelerate things a lot,” Desai told Home Health Care News. “Humana isn’t just a financial investor, they are a strategic partner that gives us access to patients, technologies and expertise to grow and scale our business rapidly so that millions more Americans can benefit from health care in the comfort of home.”

The strategic partnership with Humana comes just over two weeks after Heal rolled out “Heal Pass,” a monthly subscription program designed to keep vulnerable populations at home and out of emergency rooms. Offered throughout California, New York, New Jersey, Georgia, Virginia, Washington, Maryland and Washington, D.C., Heal’s doctors have delivered more than 200,000 visits to date, generally at lower costs and with more engagement than traditional in-office visits as well.

Apart from its in-person doctor visits, Heal offers its patients the option of one-touch telemedicine visits, which have been particularly important during the COVID-19 pandemic.

“The COVID-19 pandemic is a watershed moment to highlight the importance of timely and safe access to quality health care,” Desai said. “But even after COVID-19 wanes, the home remains a preferred place to get care.”

Under terms of the partnership, Humana will help Heal expand its current footprint to offer value-based, primary care via virtual and in-home encounters to new markets such as Chicago, Charlotte, Houston and others. These new markets are part of Humana’s Bold Goal initiative, which is focused on whole-person care by co-creating solutions aimed at social determinants of health and more.

Strategically, Humana sees home-based solutions as “inherently more scalable” than clinic-based ones, Diamond told HHCN.

Humana also believes home-based approaches lead to improved patient satisfaction and health outcomes.

“As seen in other industries, we believe consumers will increasingly demand health care solutions that are more convenient and personalized and [that] better meet their needs,” Diamond said. “Deeper relationships with patients are needed, including a better understanding of the home environment, to deliver comprehensive and higher quality care.”

Humana and Heal plan to launch in the aforementioned new markets in early 2021. The partnership with Humana will “not at all” change how Heal works with other insurance plans — or how it cares for patients with no insurance.

Humana At Home and Kindred at Home are among the other core parts of Humana’s in-home care mission.

Humana — which reported annual revenues of about $64.89 billion in 2019 — also recently contributed to a $135.8 million Series C round for DispatchHealth. In February, Humana additionally announced it was teaming up with Welsh, Carson, Anderson & Stowe on a new joint venture designed to expand access to value-based primary care for Medicare patients.

All of those efforts are instrumental to Humana’s home vision, Diamond noted.

“We consider primary care to be the foundational element to our strategy, given the significant role the primary care physician plays in coordinating the patient’s overall care,” she said. “Through our partnership with Kindred at Home, we offer more comprehensive and higher quality home health services through enhanced clinical models and patient support services. One other example is the ability to provide true emergency-level care to patients in the comfort of their homes, which we intend to do through our partnership with DispatchHealth, which we announced a few weeks ago.”

While its new collaboration with Humana will likely win it more national attention, Heal is used to being in the health care spotlight.

Heal was recognized by the 2020 CNBC Disruptor 50 as the 13th-most disruptive private company in the U.S. earlier this year.

The post Humana Helps Fast-Track In-Home Primary Care Company Heal’s Growth with $100M Investment appeared first on Home Health Care News.

Pfizer ups guidance as it prepares to sell off generics division

Pfizer has cautiously upped its guidance despite second quarter figures showing a slip in sales and profitability compared with the same period last year.

Revenues for Q2 were $11.8 billion, down 11% compared with the corresponding period in 2019, and adjusted income fell 3% to $4.4 billion.

However Pfizer has lost a chunk of sales since spinning off its Consumer Healthcare division into a joint venture with GlaxoSmithKline last year.

The consumer division generated revenues of $862 million in last year’s Q2, and the company’s biopharmaceutical division reported a sales increase of 6% to just under $9.8 billion.

Pfizer’s generics division, known as Upjohn and containing the company’s off-patent drugs, also saw sales fall by 32% to just over $2 billion.

But UpJohn is also due to merge with Mylan, pending approval by US antitrust regulators, into a new company known as Viatris.

With that merger likely to go ahead in the second half of this year after backing from Mylan’s shareholders, Pfizer’s figures show the underlying performance of the company’s branded drugs business is strong.

Pfizer added that the groundwork is continuing to prepare for the merger – Upjohn began managing Pfizer’s Meridian subsidiary, the manufacturer of EpiPen and other auto-injector products under a pre-existing strategic collaboration with Mylan.

In the meantime Pfizer is scaling up manufacturing at risk to supply a potential novel treatment or vaccine for COVID-19.

The company this week announced the candidate it has chosen for a phase 3 trial with BioNTech and has begun recruiting the first patients.

Pfizer had briefly paused recruitment to ongoing clinical studies and delayed new study starts in late April as it focused on COVID-19 related research.

But it has restarted recruitment across its portfolio and is working with sites and performing remote monitoring where appropriate to oversee studies.

It is using telehealth and home healthcare where appropriate to support research.

Pfizer raised the mid-point of its revenue guidance for 2020 by $0.1 billion – the range is now $48.6 to $50.6 billion.

It raised its earnings per share forecast by $0.03 to $2.85 to $2.95.

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Home Health, Hospice Multiples Hit Record High Amid COVID-19 Emergency

Despite the economic turmoil of the ongoing COVID-19 emergency, home health and hospice multiples hit record-breaking numbers in the first half of 2020. 

Specifically, multiples reached 29 times in the early part of this year, beating their previous high of 26 times in 2019, according to a recent report by PricewaterhouseCoopers’ (PwC) Health Research Institute. Contextually, those figures are in reference to LTM EV/EBITDA.

PwC is a global network of firms that delivers tax and consulting services for businesses.

The record-high multiples reaffirm what so many experts have said over the past few months: The coronavirus is elevating the importance of home-based care, finally earning providers the recognition they deserve.

“COVID-19-driven needs could impact the types of assets health services companies find valuable,” the report said. “For example, the pandemic has accelerated the shift to virtual health, home health and remote work, making targets that enable these functions more attractive.”

From a multiples perspective, home health and hospice performed among the best of any sub-sector in health care during the first six months of the year. In fact, their sky-high multiples helped elevate the health care sector as a whole.

Overall, health care sector multiples hit 13.9 times, up slightly from 13.8 times in 2019. Without home health and hospice, that figure would have fallen to 12.3 times in the first six months of the year.

Deal volume, however, was a different story.

As a whole, the health care sector saw mergers-and-acquisition activity slow in the first six months of 2020, falling below 500 transactions for the first time since 2015.

“From 2016 to 2019, the health services sector routinely experienced more than 500 deals by the year’s halfway mark,” the report said. “[The first half of] 2020 fell just 3% short of that level, even amid the unprecedented challenges of the COVID-19 crisis.”

Overall, there were 483 health care deals in the first half of 2020, according to the report. The home health and hospice space saw 32 of those, with year-over-year deal growth by volume falling more than 33%.

While the coronavirus has undoubtedly played a part in slowing overall health care deals, the implementation of the Patient-Driven Groupings Model (PDGM) is more so responsible for delaying deals in the home health M&A market.

At least, that’s what Cory Mertz, managing partner at M&A advisory firm Mertz Taggart, believes.

“We may have had a few deals get pushed back or killed due to COVID-19, but most of this dip is a predictable result of PDGM,” Mertz previously said. “Buyers want to wait until the dust has settled on PDGM and see how potential targets perform under the new model, which requires at least a few months of financial and patient data.”

Deal activity should get back to near-normal levels by mid-2021, Mertz predicted.

Meanwhile, skilled nursing facilities, assisted living facilities and long-term care hospitals saw the greatest decline in multiples in the early part of this year. That’s possibly due to the market’s perception of these facilities’ vulnerability to COVID-19 cases, the PwC report speculated.

The post Home Health, Hospice Multiples Hit Record High Amid COVID-19 Emergency appeared first on Home Health Care News.

Sorrento to Acquire SmartPharm and Develop Pipeline of Gene-Encoded Therapeutic Antibodies Targeting COVID-19 and Cancer

Shots:

  • Sorrento enters into letter of intent to acquire SmartPharm and develops pipeline of gene-encoded therapeutic Ab, initiating with Sorrento’s STI-1499 or COVI-GUARD, currently preclinical studies with an IND submission targeted for Aug’2020.
  • The transaction is expected to be close in Aug’2020. The integration of Sorrento’s G-MAB Ab library and SmartPharm’s GET platform is expected to provide a vast product pipeline of novel, long-acting therapeutic proteins for multiple diseases, including cancer
  • STI-1499 is expected to be evaluated in ICU patients to ensure safety and potentially allow a preliminary look at efficacy. In vitro results demonstrated STI-1499’s ability to completely neutralize SARS-CoV-2 infection @low doses, making it lead candidate for potential treatment against COVID-19

Click here to read full press release/ article | Ref: Sorrento | Image: SmartPharm




Interest in Standalone Home Health Agencies Appears to Be Waning

Increasingly, home health providers have worked to expand their service offerings to care for patients on a more longitudinal basis. Mergers-and-acquisitions activity in the second quarter of 2020 reflected that trend.

Specifically, Q2 saw a number of deals that consisted of home health care and hospice pairings, according to the latest monthly M&A report from advisory firm Mertz Taggart.

Overall, Q2 2020 saw a drop in M&A activity, as prospective home health buyers had to navigate both the impacts of the COVID-19 emergency and the Patient-Driven Groupings Model (PDGM). There were a total of five home health transactions, with two of the deals paired with hospice, according to Mertz Taggart data.

There were 18 home health, home care and hospice deals in total. That number is a decrease compared to Q2 2019 when there were 27 total transactions.

The decline of standalone home health deals is something that may continue for the coming months, Cory Mertz, managing partner at Mertz Taggart, told Home Health Care News.

“In the short-term, we will see fewer standalone home health deals,” Mertz said. “Buyers will want to see how agencies perform under the new payment model before making a competitive bid. They’ll need at least a few months of data and financial performance to do a thorough evaluation and submit an offer.”

The home health and hospice deal pairings are in line with the overarching strategy of most of the larger providers, which is to provide care for their patients across the post-acute continuum, he noted.

Amedisys is one example of that trend.

Over the past few years, the Baton Rouge, Louisiana-based provider has aggressively gone after valuable hospice targets, with deals including a $235 million acquisition of AseraCare Hospice. Historically a home health care giant, Amedisys is also now one of the five largest hospice providers in the country.

“All of the big providers have their eyes set on providing both home health and hospice in each of the areas they service,” Mertz said. “Most of the larger transactions over the past 24 months have been the traditional public home health companies acquiring hospices that have some geographic alignment with their home health [businesses]. This allows them to capture referral synergies and generate additional business. It also helps prepare them for future value-based and risk-sharing payment models.”

For many larger home health providers, these deals mean becoming one-stop-shops for care needs.

Hospice’s relatively stable regulatory environment has made it an attractive acquisition asset for buyers, too.

The standalone home health deals that did take place during the second quarter were highly-targeted, strategic deals, according to Mertz.

One such deal was the joint venture formed between LHC Group Inc. (Nasdaq: LHCG) and Orlando Health in Florida. The JV agreement is slated to close on Aug. 1.

The JV agreement allows LHC Group to further strengthen its Florida presence. LHC Group will acquire majority ownership and assume management responsibility of three current Orlando Health providers.

“This is in line with LHC’s hospital JV strategy,” Mertz said. “The other [standalone home health deals] were relatively small but allowed the buyers to further expand into an existing or contiguous geographic service area.”

The post Interest in Standalone Home Health Agencies Appears to Be Waning appeared first on Home Health Care News.

Gilead eyes takeover of cancer biotech Tizona, despite its ties to AbbVie

Gilead Sciences’ run of oncology-focused deals has continued with an option to buy cancer immunotherapy specialist Tizona – even though the biotech’s lead drug candidate is already partnered with AbbVie.

Gilead is paying $300m for a 49.9% stake in Tizona, and taking an option to buy the company outright for another $1.25 billion.

Tizona is building a pipeline of drugs that are designed to switch off mechanisms that dampen down immune responses to tumours. Its lead asset – anti-CD39-targeted antibody TTX-030 – was licensed to AbbVie last year for an upfront fee of $105m, and isn’t included in the Gilead deal.

Gilead’s interest is fixed on Tizona’s follow-up candidates, headed by TTX-080, an antibody targeting the immune checkpoint HLA-G, which the biotech describes as an “immune evasion strategy” for cancer cells, as well as two undisclosed preclinical programmes.

TTX-080 is heading for a phase 1b trial later this year, and looks set to be the first drug in the anti-HLA-G class to be tested in humans, according to Tizona.

The company thinks it could be a treatment for a broad range of cancer types, and could have activity in some patients who don’t respond to treatment with PD-1/PD-L1 checkpoint inhibitors such as Merck & Co’s Keytruda (pembrolizumab) and Bristol-Myers Squibb’s Opdivo (nivolumab).

Gilead has the right to buy Tizona outright either before or after the TTx-080 trial generates results, according to the option terms.

The agreement ties into the strategy implemented by Gilead chief executive Daniel O’Day to expand the company’s focus beyond its traditional powerhouses in antiviral drugs into new therapeutic categories, particularly cancer.

This year, Gilead has already bought Forty Seven in a $4.9 billion deal that added immuno-oncology candidate magrolimab, an anti-CD47 drug that generated positive results in a phase 1b trial at this year’s virtual ASCO congress.

Since then it has also taken equity stakes in two other cancer drug developers – Pionyr Therapeutics and Arcus Biosciences – in bolt-on deals that add selected oncology drug candidates.

Those added to other pipeline-boosting deals last year including a wide-ranging, $5.1 billion alliance with Galapagos focused on immunology and fibrosis drugs.

“Tizona is pursuing first-in-class cancer immunotherapies that could make an important difference in oncology by helping patients who don’t respond to current checkpoint inhibitors,” said O’Day.

The deal “adds to the significant progress we’ve made in the first half of this year in building out a strong and diverse immuno-oncology pipeline,” he continued.

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Gilead to Acquire Tizona’s Stakes for $300M

Shots:

  • Gilead invests $300M to obtain 49.9% equity interest in Tizona and receives an exclusive option to acquire remaining stakes of Tizona for up to an additional $1.25B that includes an option exercise fee and milestones. The transaction is expected to be closed in Q3’20
  • Gilead can exercise its option following the results of a P-Ib study of Tizona’s TTX-080, or earlier if it chooses and provides funding to support Tizona’s ongoing research and development to advance its novel pipeline
  • Additionally, Tizona will spin-off TTX-03 into a separate entity prior to the closing of this transaction, as a part of its collaboration with AbbVie under which Tizona has received $105M as upfront & an undisclosed equity investment

Click here to read full press release/ article | Ref: Gilead | Image: Pharmacy Business




WellSky Nabs New Investment from Leonard Green & Partners

Private equity-backed health care software company WellSky has a new investor and a new capital structure, the company announced Monday. 

TPG Capital — the PE platform that currently owns WellSky — has entered into a definitive agreement to add private equity firm Leonard Green & Partners LP (LGP) as a capital partner. As part of the deal, TPG Capital will also make a new equity investment in WellSky.

Terms of the transaction were not disclosed. However, WellSky CEO Bill Miller provided Home Health Care News with some color on the company’s new structure.

“I think it’s safe to say [the deal] is more like a 50/50 partnership,” Miller told HHCN. “Leonard Green has come in and has taken a meaningful stake on par with TPG.”

WellSky offers technology solutions, analytics and services to post-acute and community care providers. That includes home health agencies, hospices and hospital systems, just to name a few examples.

As an organization,WellSky’s goal is to empower organizations to improve whole person care and care coordination using predictive insights and other services. The Overland Park, Kansas-based tech giant currently serves more than 15,000 client sites around the world.

Meanwhile, TPG Capital — which acquired WellSky, then Mediware Information Systems Inc., back in December 2016 — is the private equity platform of alternative asset firm TPG. Since 1993, TPG Capital has invested $50 billion, with about $11.5 billion of those investments in the health care space.

Kindred Healthcare — which is also co-owned by Humana Inc. (NYSE: HUM) and Welsh, Carson, Anderson & Stowe — is one notable home-based care example.

LGP, on the other hand, has raised over $40 billion of committed capital since inception. It specializes in consumer, business and health care services providers, as well as businesses in retail, distribution and industrials. 

WellSky will use its new investments from TPG Capital and LGP to grow and expand its current capabilities and service offerings. Miller singled out analytics, telehealth and payer relationships as specific growth areas of interest.

“For our clients, this is great news,” Miller said. “This is just adding to our capacity, capabilities and the ability to support them better. The management team is staying the same, and we’re the same company we were yesterday. We just have the wherewithal to continue to develop solutions that support them — and to use our ears better and really get things done faster.”

The addition of LGP and the new investment from TPG Capital will help the company “be better at everything” it already does, Miller added.

The transaction is expected to close in the third quarter of 2020.

From rumors to reality

WellSky’s Monday announcement doesn’t come as a total surprise.

PE Hub speculated WellSky could be getting new ownership earlier this month, citing “five sources familiar with the matter.”

The publication reported WellSky’s full sale valuation could be around $3 billion, thanks to the company’s EBITDA of about $150 million. It also floated the possibility of the 50-50 joint structure that came to be.

Miller also confirmed other details listed in the report, such as the timing of the transaction.

“This is something we had contemplated doing this year,” he said. “We were definitely contemplating it when the coronavirus outbreak hit … and it gave us some pause.”

When WellSky saw that its business continued to perform “very well” amid the COVID-19 emergency, it decided to move forward with the deal process. It heard from a handful of interested buyers and ultimately went with LGP due to the “aggressiveness of its bid” and its understanding of the WellSky vision and markets, according to Miller.

Growth trajectory

Since being acquired by TPG in late 2016, WellSky has grown significantly, thanks in large part to M&A. Recent transactions include the purchase of ClearCare late last year and another five acquisitions in 2018.

With the help of LGP, WellSky hopes to continue with that trajectory, using both organic and transactional growth methods.

“I fully expect the company to double in size again,” Miller said. “I don’t have any doubt about it. That’s what we do, and that’s what we’ve done. Largely, we’ve tripled in size, and now I suspect, we’ll double and triple again over the next handful of years.”

The post WellSky Nabs New Investment from Leonard Green & Partners appeared first on Home Health Care News.

Thermo Fisher Scientific Amends its Agreement to Acquire QIAGEN

Shots:

  • Under the amended agreement, the offer price increased from $44.5 to $49/QIAGEN share in cash, representing a premium of 35% to the closing price of QIAGEN’s ordinary shares on the Frankfurt Prime Standard on Mar 2, 2020, making the latest deal value as $12.5B
  • The amendment also provides for a reduction of the minimum acceptance threshold from 75% to 66.67% of outstanding QIAGEN shares at the end acceptance period on Aug 10, 2020, with $95M reimbursement to Thermo Fisher, if the minimum acceptance threshold is not met
  • QIAGEN’s Supervisory and Managing Boards reaffirm unanimous recommendation that all shareholders accept and tender all their QIAGEN shares in the offer prior to the end of the acceptance period. The transaction is expected to be completed in H1’21

Click here to read full press release/ article | Ref: PRNewswire | Image: MPO

Related News: Thermo Fisher Scientific to Acquire QIAGEN for ~$11.5B




Kronos Bio to Acquire Gilead’s SYK Inhibitor Portfolio

Shots:

  • Gilead to receive an up front in cash and convertible notes into Kronos equity, regulatory & commercial milestones along with royalties on sales of products emerges from the acquired programs
  • Kronos to acquire the two clinical-phase assets along with the rest of Gilead’s portfolio of SYK inhibitors. The portfolio includes entospletinib, being evaluated in P-I & II study in oncology patients, and lanraplenib that has been evaluated in P-II trials for autoimmune diseases
  • Kronos plans to initially focus on a biomarker-defined subset of AML patients. The focus indicates that SYK inhibition showed promising clinical activity in AML patients with cancers that overexpress the HOXA9 and MEIS1 transcription factors. Additionally, Entospletinib demonstrated positive clinical data in its early studies

Click here to read full press release/ article | Ref: Kronos Bio | Image: PharmaLive




Bayada, Universal Health Services to Launch New Joint Venture Focused on the Home

Bayada Home Health Care on Thursday announced plans to form a new joint venture with Universal Health Services Inc. (NYSE: UHS), one of the largest providers of hospital and health care services in the country.

Broadly, the goal of the newly announced JV is to meet the increased future demand for in-home care across both organizations’ markets, helping more people recover at home after recent illnesses, injuries or hospitalizations.

King of Prussia, Pennsylvania-based UHS has over 400 acute care hospitals, behavioral health facilities and ambulatory centers across the U.S., Puerto Rico and the U.K. Employing over 90,000 workers, UHS recorded net revenues of $11.3 billion during 2019, an increase of 5.6% year-over-year, according to the company’s most recent financial filing.

On its end, Moorestown, New Jersey-based Bayada has more than 300 U.S. locations, with additional locations in Germany, India, Ireland, New Zealand and South Korea. Among the nonprofit provider’s offerings are home-based nursing, rehabilitative, therapeutic, hospice and assistive care services.

Bayada recorded 2019 revenues of $1.5 billion in 2019, with the company’s pediatric home health business accounting for roughly one-third of that total.

For UHS, the JV with Bayada will enable the company to “significantly expand” its home health care services and offerings, bringing more care to more patients along the full continuum of care.

Across the United States, health systems and hospitals have increasingly embraced the concept of home-based care.

In part, the push toward the home is due to the coronavirus and the need to reinforce care capacity. While U.S. hospitals handled the initial COVID-19 surge fairly well, many are quickly becoming overwhelmed in emerging hotspots, including Texas, Florida and California.

As a result, some have even opted to launch hospital-at-home programs, with Minnesota’s North Memorial Health’s partnership with Lifesprk being the most recent example.

However, even before the coronavirus, a growing wave of health systems and hospitals had started teaming up with home health providers due to financial and operational struggles. Running home health care segments during a shifting, more complex payment landscape requires ample time and resources, so many organizations see outsourcing services as their best option.

“It’s a definite trend,” Mark Kulik, managing director at mergers-and-acquisitions advisory firm The Braff Group, previously told Home Health Care News. “The theme is [that] it’s hard to be great at everything. Your core competency as a hospital is acute care. Home care is very different.”

News about UHS’s JV with Bayada comes less than a week after the U.S. Department of Justice (DOJ) announced UHS and one of its facilities had resolved False Claims Act allegations in a $122 million settlement.

This is a developing story. Check back later for further updates.

The post Bayada, Universal Health Services to Launch New Joint Venture Focused on the Home appeared first on Home Health Care News.

HGP Semi-Annual Health IT Market Review: 6 Key Trends to Know

HGP Semi-Annual Health IT Market Review: 6 Key Trends to Know

Healthcare Growth Partners, an
Investment Banking and Strategic Advisory firm exclusively focused on the
transformational health
IT
market, today announced the release of its Semi-Annual Health IT Market
Review report that summarizes M&A and private equity activity across health
IT, health information services, and digital health.

Report Background/Methodology

This edition of the report includes feedback from our survey
of private equity professionals and their response to COVID-19, as
well as an overview of trends seen in the first half of 2020 including
COVID-19’s slowdown of the financial markets, digital health
IPOs, investment activity, and mergers and acquisitions. The report leverages
the Healthcare Growth Partners database to evaluate M&A and investment
trends, valuation multiples, and capital markets activity across the health IT,
health information services, and digital health sectors.

The Semi-Annual Report includes the following:

– Overview of COVID-19’s Impact on Health IT M&A and
Investment Trends

– Results from HGP’s Private Equity
Survey Covering COVID-19 and Health IT Investing

– Health IT Market Analysis

– Health IT M&A and Investment Activity

– Health IT Valuation Trends

– Macroeconomic Trends

Key Findings

Here are six key findings from the health IT semi-annual market report:

1. 1H 2020 US M&A Activity: M&A saw a sharp decline in April followed by a tentative recovery in May and June. The universe of strategics bifurcated between passive and active acquirers, contracting the field of buyers. Due to the liquidity crunch and uncertainties about the reopening of the economy, it is likely M&A activity will remain stunted through the rest of 2020.

2. 1H 2020 US Investment Activity: activity is down across most health IT investment themes because of COVID-19. This is in part due to a contracting deal pipeline as well as overall risk-aversion. The primary exception is the remote delivery of care, which swiftly gained interest as a result of CV-19. Deal pipeline activity appeared to be returning in late Q2, indicating a stronger 2H.

3. IPO Trends: The surge in health IT IPOs that started in 2019 continued into 2020, with 4 companies completing their IPO, and another 2 hoping to capitalize on the market’s rebound in 2H 2020. Strong public valuations are enticing new offers.  

4. Public Equity Valuations: Companies that facilitate the remote delivery of care saw significant rises in value, while those susceptible to a replacement market or the recent downturn in case volume saw value decline. As evident by the NASDAQ, tech valuations are at record highs.

5. Private Equity Valuations: Over the short-term, investors were slightly bearish on valuation and deal flow, but seem to expect that health IT may be more resilient than the overall market in the long-term with both valuations and interest expected to rise over time.

6. Health IT Sector Interest: Patient-facing solutions have gained interest in the COVID-19 era as well as those leveraging data, including AI to enhance outcomes and the delivery of care. Sectors directly impacted by the reduction in procedures, such as RCM faced near-term challenges.

For more information, the full report is available for
download here.

How to Draft an M&A Agreement When PPP Loans Are Involved

Smaller home-based care agencies could be forced to close their doors as a result of the coronavirus, creating merger-and-acquisition opportunities for larger providers in the space. 

However, the Paycheck Protection Program (PPP) adds a new layer of complexity to some of those M&A opportunities, specifically if an acquisition target is the recipient of a PPP loan.

It’s unclear how many home-based care providers have received loans under the program, but about 13% of all loans issued so far have gone to businesses in the health care and social service spaces. Plus, dozens of home-based care providers have received larger PPP loans of $150,000 or more, according to data released earlier this week.

Before entering a deal with a PPP recipient, buyers should consider how many employees the home-based care agency has, what the PPP loan total is and when the loan will be forgiven, among other factors.

If buyers decide to proceed with the transaction after all that, there are also special considerations they should take into account when pricing the deal and creating the purchasing agreement, according to Philip Feigen, attorney and shareholder at the international law firm Polsinelli.

“You need to look at [if there were] any salary reductions or reductions in [full-time equivalents] (FTE) that would cause the borrower to not get full forgiveness so that you can price that out when you’re making an offer,” Feigen said.

He and his colleagues shared that tip and other advice during a recent Polsinelli webinar designed to help attendees navigate the M&A deal landscape when PPP loans are involved.

The PPP was born out of the CARES Act earlier this year as a way to help small to mid-sized businesses make payroll and finance other expenses amid the COVID-19 emergency. PPP loans are forgivable if recipients meet certain criteria, such as spending a certain amount of the money on payroll and keeping salaries relatively steady.

But if PPP recipients fail to meet those requirements, the Small Business Administration (SBA) could decide to audit them. That’s one reason buyers of PPP recipients should make sure to include certain covenants in their purchase agreements to protect themselves.

Polsinelli attorneys recommend buyers include covenants that require acquisition targets to do everything they can to ensure loan forgiveness, if they have yet to obtain it. That includes requiring them to use all funds as required under the CARES Act and to apply for loan forgiveness within a set period of time agreed upon by both parties. 

Additionally, buyers should include a provision requiring sellers to comply with any future audits, as well as to provide certain documentation, regardless.

“It’s important to make sure that the seller is maintaining all of their records for at least six years, or at the very least providing the buyer with a copy of all the records,” Sara Ainsworth, Polsinelli associate and attorney, said on the webinar. “The SBA has that six-year time period to come back and review all the loans, so it’s important to make sure that documentation is available.”

Agreements should also indemnify the buyer against PPP-related issues such as seller ineligibility, non-compliance with loan terms, audit investigations by SBA or taxes owed related to the CARES Act.

Escrow option

In a typical M&A deal, a buyer might get a representation and warranties insurance policy to further protect itself against losses that arise out of the buyer breaching certain agreement terms. But that’s less of an option in M&A deals where PPP loans are involved, Feigen said.

“It’s been our experience so far that none of the insurers are willing to do reps and warranties insurance with respect to the PPP loans, just because it’s so new that they can’t get their hands on what the potential liabilities are,” he said.

As an alternative, Feigen suggests setting up an escrow account in the amount of the PPP loan.

Once the loan is forgiven, the seller can have that money back. If it’s not, the money can help.

“To the extent [the PPP loan] is not forgiven, partially or all, then that becomes money that is either used to pay the loan back or goes back to the buyer, who would pay the loan back,” Feigen said. “A lot of sellers might be uncomfortable with that, and there’s a lot of potential liability related to it, but we’ve been seeing that used in transactions.”

Finally, Polsinelli attorneys say it’s important to lay out what will happen with any remaining PPP loans in M&A agreements.

The post How to Draft an M&A Agreement When PPP Loans Are Involved appeared first on Home Health Care News.

Buyer Beware: Factors Home-Based Care Providers Should Consider Before Acquiring PPP Recipients

Pre-coronavirus, the home health and home care industries were already poised for historic consolidation, thanks to the Patient-Driven Groupings Model (PDGM), rising minimum wages and other operational pressures.

Industry leaders predict that the COVID-19 emergency will only drive M&A further going forward. However, home-based care businesses interested in picking up new agencies should heed caution, especially if their potential acquisition targets are recipients of loans under the Paycheck Protection Program (PPP).

So far, dozens of home-based care agencies across the country have received PPP loans of more than $150,000, according to Small Business Administration (SBA) data released earlier this week.

SBA has not released a list of smaller loan recipients, so it’s unclear how many in-home care agencies in total are participating in the program. What is clear, however, is that acquiring a PPP loan recipient comes with risks.

“There are more issues as a purchaser or buyer to beware of in a transaction,” Philip Feigen, attorney and shareholder at the international law firm Polsinelli, said. “But a lot of these things are equally as applicable if you’re on the seller side.”

Feigen and his colleagues ran down a brief checklist for potential buyers during a recent Polsinelli webinar. The considerations are key to ensuring home-based care organizations don’t enter deals that could introduce undue audit risk or eliminate PPP loan forgiveness opportunities down the line. 

Factors to consider

The CARES Act created the PPP just a few months ago to help small and mid-sized businesses stay afloat during the COVID-19 emergency. The program set aside billions of dollars in forgivable loans to help eligible applicants make payroll and finance certain other expenses such as rent, utilities and mortgage interest.

Loan forgiveness is conditional on borrowers meeting certain requirements. For example, they must spend 60% of the loan on payroll costs and not cut employees’ pay by more than 25% to be eligible for full loan forgiveness, among other requirements.

The program has been met with widespread confusion by recipients, about 13% of whom are health care and social services businesses, according to SBA data.

That’s only complicated by the fact that the SBA has updated and clarified the PPP rules dozens of times since the program was introduced in April.

As such, it should be no surprise that doing deals with PPP recipients means additional complications and unknown variables. Those should be taken into account before a home-based care provider agrees to acquire a PPP loan recipient.

First, potential buyers should be mindful of the number of employees an acquisition target has, as well as its financial information and the dollar amount of the PPP loan it has received, Feigen said.

One reason for that is so buyers can adequately weigh their audit risks, as the SBA has said that it will audit all PPP loans of more than $2 million dollars.

Once a transaction contract has been signed, the buyer and seller are officially affiliates, which have some implications in the eyes of SBA.

“On the loan forgiveness application, one of the questions that … the [PPP] borrower has to respond to is whether or not they have a loan of more than $2 million or whether, along with its affiliates, it has loans of more than $2 million,” Sara Ainsworth, Polsinelli associate and attorney, said on the webinar.

On top of that, a seller can have additional affiliates.

As such, it’s important for a buyer to consider when a potential deal would close: before or after the seller has received forgiveness for their PPP loans.

If the buyer times the transaction during the loan’s 24-week covered period, it could see a reduction in the loan forgiveness amount it’s eligible for. The purchaser runs that risk if it takes on the loan but fails to bring on the seller’s employees — or if the overall number of employees is less than the number present when the loan was issued.

“It’s potentially problematic if the buyer has fewer employees — because at that point, you really are looking at a likely reduction in the total forgivable amount,” Ainsworth said. “It’s also an issue if the buyer does not take the PPP loan but does take the employees, so the seller is left with the PPP loan, but a lower amount of employees, possibly down to zero.”

Buyers should also ensure that acquisition targets had economic need for the loan and that they have used the funds properly and followed the rules of the program.

Finally — and potentially the most important factor to consider before spending time trying to negotiate a deal with a PPP recipient — home-based care providers need to make sure that it’s allowed. Because the PPP is so new, that’s still somewhat up in the air.

Depending on language in the loan documents, a buyer may need to get the lender’s permission before they can proceed with the transaction. Others banks are handling M&A questions as they arise.

“A lot of banks that we’ve been dealing with … aren’t sure how to handle this situation,” Feigen said. “The reason they’re not sure how to handle this situation is the SBA has not taken a position on whether borrowed can undergo a change of control and how that would affect eligibility for forgiveness.”

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