ORENCIA Approved for Psoriatic Arthritis

Bristol-Myers receives FDA approval for PsA treatment ORENCIA

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Bristol-Myers Squibb Company (BMY) announced the U.S. Food and Drug Administration has approved #ORENCIA for the treatment of adults with active Psoriatic Arthritis, a chronic, inflammatory disease that can affect both the skin and musculoskeletal system.

ORENCIA is approved and available in both intravenous and subcutaneous injection formulations.

ORENCIA should not be administered concomitantly with TNF antagonists, and is not recommended for use concomitantly with other biologic Rheumatoid Arthritis therapy, such as anakinra.

This approval marks the third autoimmune disease indication for ORENCIA.

The co-stimulation blockade of ORENCIA inhibits T-cell activation and the resulting cascade of events that contribute to inflammation.

T-cell activation is involved in the pathogenesis of PsA. The approval was based on results from two randomized, double-blind, placebo-controlled trials in which ORENCIA improved disease activity in both TNF-naive and exposed patients with high disease activity, high tender and swollen joints, and a disease duration of more than seven years.

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U.K. Approves Alexion’s Strensiq

Alexion reaches funding agreement with NICE and NHS England for Strensiq

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Alexion Pharmaceuticals (ALXN) announced that it has reached a national funding agreement with the National Institute for Health and Care Excellence, or NICE, and the National Health Service, or NHS, England based on a Managed Access Agreement, or MAA, which provides access to Strensiq for patients in England with pediatric-onset hypophosphatasia, or HPP, regardless of their current age.

The funding agreement was announced today in a positive final evaluation determination, or FED, issued by the NICE Highly Specialised Technologies, or HST, Evaluation Committee to recommend Strensiq according to the MAA.

#Strensiq (asfotase alfa) is an enzyme replacement therapy approved for the treatment of patients with perinatal/infantile- and juvenile-onset hypophosphatasia (HPP). 

#HPP is a genetic, chronic, progressive and life-threatening metabolic disease in which patients experience devastating effects on multiple systems of the body, leading to debilitating or life-threatening complications. HPP is characterized by low alkaline phosphatase (ALP) activity and defective bone mineralization that can lead to destruction and deformity of bones and other skeletal abnormalities, as well as systemic complications such as muscle weakness and respiratory failure leading to premature death in infants.

The MAA has been developed in collaboration between physician thought-leaders, patient groups, NHS England, and Alexion. The MAA ensures access to Strensiq for infants, children and adult patients with pediatric-onset HPP who experience the most disabling symptoms and are expected to benefit most from therapy.

ALXN has a 52-weeks trading range of $96.18 – $145.42. Shares last traded at $124.48.

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Walgreen Dumps Rite Aid, Buys 2186 Stores Instead

Rite Aid, Walgreens terminate prior deal, Rite Aid agrees to sell stores instead

Walgreens dumps Rite Aid, See Stockwinners Market Radar for more

Rite Aid (RAD) announced that it has entered into an asset purchase agreement with Walgreens Boots Alliance (WBA), whereby WBA will acquire 2,186 stores, related distribution assets and inventory from Rite Aid for an all-cash purchase price of $5.175B, on a cash-free, debt-free basis.

Under the terms of the agreement, Rite Aid has the option to purchase generic drugs that are sourced through an affiliate of WBA at cost, substantially equivalent to Walgreens for a period of 10 years.

The 2,186 stores included in the agreement are primarily located in the Northeast, Mid-Atlantic and Southeastern regions of the United States. The three distribution centers included in the agreement are located in Dayville, Conn., Philadelphia and Spartanburg, S.C.

Under the terms of the agreement, Rite Aid will provide certain transition services to WBA for up to three years after the closing of the transaction.

The transaction, which is expected to close within six months, has been approved by the Boards of Directors of Rite Aid and WBA and is subject to antitrust clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and other customary closing conditions.

Approval of this transaction does not require a shareholder vote. Rite Aid expects to use a substantial majority of the net proceeds from the transaction to repay existing indebtedness, significantly reducing Rite Aid’s leverage levels.

Rite Aid also expects that the federal tax gain on the sale of the assets will be largely offset by its net operating loss carryforwards, resulting in a minimal cash tax payment on this transaction.

Following the completion of the transaction, Rite Aid will continue to operate EnvisionRx, its pharmacy benefit manager, RediClinic and Health Dialog and leverage the capabilities of these subsidiaries to deliver a higher level of care in the communities it serves.

The company also announced the immediate termination of the merger agreement, which was announced on October 27, 2015 and amended on January 29, 2017, under which WBA would have acquired all outstanding shares of Rite Aid. The decision to terminate the merger agreement follows feedback received from the Federal Trade Commission that led the company to believe that the parties would not have obtained FTC clearance to consummate the merger.

In connection with the termination, WBA has agreed to pay Rite Aid a termination fee in the amount of $325M in cash.

In light of the termination of the merger agreement, the divestiture agreement with Fred’s (FRED) was also terminated, effective today.

Price Action:

RAD closed at $3.93. Shares last traded at $3.05 in pre-market. FRED closed at $12.32, last traded at $9.85. WBA closed at $77.09, last traded at $81.00.

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Cara Therapeutics’ Rise Could Continue

Watch Cara Therapeutics into osteoarthritis pain results

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Cara Therapeutics (CARA) has soared this month amid the wider biotech rally, but research firm Janney argues the stock could continue higher on a pending release of data from a study of its potential treatment for osteoarthritis pain.

BACKGROUND

Cara Therapeutics is a clinical-stage researcher focused on treating pain and pruritus, or itching, by targeting the body’s so-called “kappa” #opioid receptors.

The company’s pipeline includes #CR845 and #CR701, the former of which is in advanced studies for both oral and intravenous forms.

In its most recent earnings report on May 4, Cara said it expects top-line data from the Phase 2b trial of oral CR845 for osteoarthritis-related pain in Q2, and the company confirmed on its conference call that the trial is “now fully enrolled at 480 patients and on track for a data readout later in Q2.” Cara’s second quarter ends June 30.

JANNEY SEES BIG POTENTIAL MOVE

Janney’s Ken #Trbovich said Wednesday he expects “significant volatility” in Cara Therapeutics as investors await the Phase 2 osteoarthritis data.

Highlighting the stock’s all-time highs on the back of the biotech rally and Friday’s announcement of “breakthrough therapy” designation, the analyst nevertheless says positive osteoarthritis data can “easily justify” a move into the $31-$36 range, though he warns that negative results could take the stock to $10-$15.

The long-term potential of oral #CR845 in chronic pain is “tantalizing” for a company whose market cap remains below $1B — with Trbovich offering Nektar’s (NKTR) 42% surge on the back of Phase 3 opioid data as an example — but the analyst cautions that the pending results are only mid-stage and that “a portion” of the potential upside has already been priced in.

Modeling the company on a discounted cash flow basis while factoring any potential dilution necessary to fund and launch oral CR845, Trbovich ends up at $31-$34 per share assuming peak sales of just over $1B.

On the other hand, he expects a retrace to $15 if data is negative, or even as low as $10-$12 if results are particularly bad and investors apply the news to Cara’s pain program for intravenous CR845.

POSITIVE HINT FROM UNRELATED TRIAL

H.C. #Wainwright analyst Corey Davis wrote June 22 that the osteoarthritis data is “expected any day.” #Davis added that Cara’s announcement that week of continuing its Phase 3 trial of I.V.

#CR845 in postoperative pain after an interim analysis — while largely unconnected from the osteoarthritis trial — is “still a slight positive indicator” given the lack of futility or safety signals.

PRICE ACTION:

CARA last traded at $27.72.

See our recent post on CARA.

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Spectranetics Sold for $2.1 Billion

Philips to acquire Spectranetics for $38.50 per share in cash

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Royal Philips (PHG) and Spectranetics (SPNC) announced that they have entered into a definitive merger agreement. Pursuant to the agreement, Philips will commence a tender offer to acquire all of the issued and outstanding shares of Spectranetics for $38.50 per share, to be paid in cash upon completion. This represents a 27% premium to Spectranetics closing price on June 27.

The implied enterprise value is approximately EUR 1.9B, inclusive of Spectranetics’ cash and debt.

The board of directors of Spectranetics has approved the transaction and recommends the offer to its shareholders.

The transaction is expected to close in Q3. Spectranetics is currently growing double digits and projects 2017 sales to be in the range of $293M-$306M. Upon completion of the transaction, Spectranetics and its more than 900 employees will become part of the Image-Guided Therapy Business Group within Philips.

Spectranetics’ standalone revenue growth is expected to be double-digit and adjusted EBITA to be positive by 2018. Philips sees sustained high sales growth through new product introductions across a highly synergistic therapy device portfolio.

Moreover, the transaction will enhance the geographical expansion of Spectranetics’ products and commercialization opportunities in new, adjacent segments.

As part of Philips, the Spectranetics business will benefit immediately from Philips’ platform enabling cost and working capital synergies. As a result, the combined Spectranetics and Philips Image Guided Therapy Devices business, within the Image-Guided Therapy Business Group, is expected to grow to approximately EUR 1B by 2020.

For the overall Image-Guided Therapy Business Group, Philips targets a high single-digit comparable sales growth and high-teens adjusted EBITA margin for the medium-term. In 2016, this business group reported sales of approximately EUR 1.9B of which approximately 20% was attributable to device sales.

The transaction is expected to be accretive to Philips’ revenue growth, adjusted EBITA margins and adjusted EPS by 2018.

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FDA Grants Conatus’ IDN-7314 Orphan Drug Designation

Conatus (CNAT) granted orphan drug designation for IDN-7314 for treatment of PSC

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Conatus Pharmaceuticals (CNAT) announced that the U.S. FDA has granted Orphan Drug Designation to Conatus’ drug candidate IDN-7314 for the treatment of primary sclerosing cholangitis, a disease affecting bile ducts in the liver which can lead to cirrhosis and liver failure.

The FDA’s Orphan Drug Designation program is intended to encourage the development of drugs and biologics that may provide benefit to patients suffering from rare diseases or conditions.

IDN-7314 is an orally active pan-caspase protease inhibitor designed to reduce the activity of enzymes that mediate inflammation and cell death, which has demonstrated reduction of relevant biomarkers in two preclinical models of PSC. One nonclinical model, the Mdr2-/- mouse model, is considered the current benchmark nonclinical model of PSC.

A new preclinical model, second mitochondria-derived activator of caspases-mimetic induced PSC in mice, has recently been reported that reproduces much of the phenotype of human PSC. IDN-7314 significantly improved biochemical indices of hepatic and biliary damage in these murine models of PSC, and these results suggest the involvement of caspases in the progression of PSC.

Other stocks to watch include: ICPT, INCY and AZN.

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Barron’s Is Bullish on Cigna, Red Hat

Barron’s is bullish on RHT, UTHR, ALXN, CI, AIZ, and NCR

Barron’s remains bearish on Foot Locker (FL)

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Barron’s, the weekly publication owned by the Wall Street Journal, in its latest issue is bullish on several names. They include:

Shares of NCR Corp. (NCR) could gain 30% in a year, Barron’s contends in a feature article. The publication argues that the cash-register company is a “rising software star with the discount valuation of a legacy hardware player,” and that NCR has opportunities to sell digital capabilities to retailers threatened by e-commerce leaders.

Assurant (AIZ) could double as investors reevaluate company.  Assurant is shifting toward a capital-light model, and some investors believe the stock could double in coming years as Wall Street begins to appreciate the company’s new focus on fee-based businesses, Barron’s contends in a feature article. In an interview with the publication, CEO Alan Colberg said Assurant is “on track for double-digit earnings-per-share growth this year.”

Alexion, United Therapeutics worth a look. After the recent jump in biotech stocks, Barron’s urges investors to look for companies that haven’t yet joined the rally, or that have unique reasons for potentially continuing higher. In a ‘Trader Extra’ column, Barron’s notes that a Credit Suisse screen of “fresh ideas” included Alexion Pharmaceuticals (ALXN) and United Therapeutics (UTHR), and the publication argues that both “could be attractive now” given the former’s now concluded sales investigation and the latter’s cheap valuation.

Red Hat may eke out double-digit returns.  Red Hat (RHT) investors shouldn’t take profits yet, as order momentum and Wall Street’s appetite for growth suggest the stock can “eke out” double-digit returns in the year ahead, Barron’s contends in a ‘Follow Up’ column. The publication cautions that “it’s a close call.”

Cigna could gain over 15% by end of next year.  The GOP healthcare plan looks like a boon for Cigna (CI) and other insurers, and the stock could gain more than 15% by the end of next year, Barron’s contends in a ‘Follow Up’ column. Passage of the plan is “far from certain,” but it proposes to remove taxes, inject funding into insurance markets, and ease requirements on how much insurers spend on health care, Barron’s explains. Cigna has taken a “cautious approach” to Obamacare, and the company seems to be “firing on all cylinders,” the publication adds.

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FDA Approves Portola Pharmaceuticals’ Bevyxxa

Portola Pharmaceuticals announces FDA approval of Bevyxxa, Shares rise 45%

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#Portola Pharmaceuticals (PTLA) announced the U.S. Food and Drug Administration has approved #Bevyxxa, which it said is “the first and only” anticoagulant for hospital and extended duration prophylaxis of venous thromboembolism, or #VTE, in adult patients hospitalized for an acute medical illness who are at risk for thromboembolic complications due to moderate or severe restricted mobility and other risk factors for VTE.

The drug, BevyxXa, known also as betrixaban, is the first oral treatment and first extended duration treatment for this patient population, the company said.

Roughly 200,000 people in the United States develop deep vein #thrombosis each year, with about 40,000 of them dying of pulmonary embolism, caused when a blood clot breaks loose and travels to the lungs, blocking blood flow, the company said.

The timeline on which Portola expects to launch Bevyxxa is between August and November 2017.

During this period, Portola will complete salesforce hiring and training, drug manufacturing validation and inventory buildup, the company said.

BevyxXa was tested using a novel clinical trial strategy designed to test a series of subgroups before testing the broader patient population. It first tested the highest risk patients. Then it tested a lower risk group, and finally the overall patient population.

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AVEO Oncology’s FOTIVDA Receives Europe’s Pre Approval for Renal Cell Carcinoma

AVEO Oncology reports positive CHMP opinion for tivozanib as RCC treatment

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AVEO Oncology (AVEO) announced that the Committee for Medicinal Products for Human Use, the scientific committee of the European Medicines Agency, has recommended #FOTIVDA for approval as a treatment for patients with advanced renal cell carcinoma.

The #CHMP’s recommendation is now referred to the European Commission.

The EC, which typically adheres to the recommendation of the CHMP, but is not obligated to do so, is expected to make its final decision in about 67 days.

If approved by the EC, marketing authorization for tivozanib will be granted in all 28 countries of the European Union, Norway, Iceland and Liechtenstein. EUSA Pharma, a specialty pharmaceutical company with a focus on oncology and oncology supportive care, is the European licensee for tivozanib.

Under the terms of their December 2015 agreement, EUSA Pharma has agreed to pay AVEO up to $394M in future research and development funding and milestone payments, assuming successful achievement of specified development, regulatory and commercialization objectives, as well as a tiered royalty ranging from a low double-digit up to mid-twenty percent on net sales of tivozanib in the agreement’s territories.

Thirty percent of milestone and royalty payments received by AVEO, excluding research and development funding, are due to Kyowa Hakko Kirin as a sublicensing fee in Europe.

In the United States, the royalty obligation to KHK ranges from the low- to mid-teens on net sales.

AVEO says, “If the European Commission grants marketing approval for #tivozanib, it would trigger a $4 million research and development reimbursement payment from EUSA, and AVEO will also be eligible for up to $12M in additional milestones from EUSA based on member state reimbursement and regulatory approvals.

These payments would add significant resources to our balance sheet as we work toward the anticipated readout of our U.S. pivotal trial in third-line RCC, the TIVO-3 trial, in the first quarter of 2018.”

AVEO closed at $0.72. Shares are up 50% in pre-market trading.


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Cara Therapeutics Sharply Higher on FDA Action

FDA has granted Breakthrough Therapy designation to I.V. CR845 for the treatment of moderate-to-severe uremic pruritus in chronic kidney disease patients undergoing hemodialysis

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Cara Therapeutics announced that the FDA has granted Breakthrough Therapy designation to I.V. CR845 for the treatment of moderate-to-severe uremic pruritus in chronic kidney disease patients undergoing hemodialysis.

Cara Therapeutics, Inc. (CARA) is a biopharmaceutical company. The company is focused on developing and commercializing new chemical entities designed to alleviate pain and pruritus by selectively targeting peripheral kappa opioid receptors.

“The FDA’s decision to grant Breakthrough Therapy designation is recognition of both the significant unmet medical need among CKD patients with UP and the potential of I.V. CR845 to address it,” said Derek Chalmers, Ph.D., D.Sc., President and Chief Executive Officer of Cara Therapeutics.

“We have already initiated our Phase 3 program and look forward to working closely with the FDA to bring this potential new treatment option to hemodialysis patients as quickly as possible.”

Breakthrough Therapy designation is granted to expedite the development and review process for new therapies addressing serious or life-threatening conditions, where preliminary clinical evidence indicates that the drug candidate may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints.

CARA closed at $24.25. Shares are up $2 in pre-market trading.

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FDA Grants Thermo Fisher Pre-Market Approval for Oncomine Test

Thermo Fisher says FDA grants premarket approval for Oncomine Dx Target Test that simultaneously screens tumor samples for three FDA-approved therapies for non-small cell lung cancer

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Thermo Fisher ( $TMO ) announced that the FDA has granted premarket approval for its #Oncomine Dx Target Test, which the company called the first next-generation sequencing-based test that simultaneously screens tumor samples for biomarkers associated with three FDA-approved therapies for non-small cell lung cancer.

LabCorp’s ( $LH ) Diagnostics and Covance Businesses, NeoGenomics (NEO) Laboratories, and Cancer Genetics (CGIX) are among the first laboratories that will offer the Oncomine Dx Target Test as a service to oncologists, Thermo Fisher said.

All tests will be run on Thermo Fisher’s Ion PGM Dx System, which received FDA 510k clearance in parallel for use on formalin-fixed, paraffin-embedded tissue samples.

Thermo Fisher developed the Oncomine Dx Target Test in collaboration with Novartis (NVS) and Pfizer (PFE).

“This first iteration of the test is just the beginning since the diagnostic claims of the Oncomine Dx Target Test may be expanded in the future based on the existing panel.

Thermo Fisher has entered into discussions with several pharmaceutical companies looking to use the panel for FDA-approved targeted therapy applications beyond lung cancer,” the company noted.

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Novartis Reports Positive Results, Shares Rise

Novartis Phase III CANTOS study met primary endpoint

Durect (DRRX) completes enrollment in Phase 3 trial for pain relief candidate Posimir

#Novartis (NVS) announced topline results from the global Phase III CANTOS study investigating the efficacy, safety and tolerability of ACZ885 in combination with standard of care in people with a prior heart attack and inflammatory atherosclerosis.

With more than 10,000 patients enrolled in the study over the last six years, #CANTOS is one of the largest and longest-running clinical trials in Novartis’ history.

The CANTOS study met the primary endpoint, demonstrating that when used in combination with standard of care ACZ885 reduces the risk of major adverse cardiovascular events, or MACE, a composite of cardiovascular death, non-fatal myocardial infarction and non-fatal stroke, in patients with a prior heart attack and inflammatory atherosclerosis.

The full data from the study will be submitted for presentation at a medical congress and for peer reviewed publication later this year.

Durect Data

Separately, Novartis announced that #Durect (DRRX) has completed patient enrollment in PERSIST, the pivotal Phase 3 clinical trial of Posimir, an investigational locally acting, non-opioid analgesic intended to provide up to three days of continuous pain relief after surgery.

The company expects to complete patient follow-up visits during Q3 and announce top-line data in Q4.

In May 2017, Durect signed a development and commercialization agreement with Sandoz AG, a division of Novartis (NVS), covering the U.S.

Under the terms of the agreement, #Sandoz made an upfront payment to Durect of $20M following review under the HSR Antitrust Improvements Act of 1976, with the potential for up to an additional $43M in development and regulatory milestones, up to an additional $230M in sales-based milestones, as well as a tiered double-digit royalty on product sales in the U.S. Durect remains responsible for the completion of the ongoing PERSIST Phase 3 clinical trial for #Posimir as well as FDA interactions through approval.

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Parexel Sold for $5 billion

PAREXEL sold for $88.10 per share in cash for $5B, including PAREXEL’s net debt

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PAREXEL International Corporation (PRXL) and Pamplona Capital Management announced that they have entered into a definitive agreement under which Pamplona will acquire all of the outstanding shares of PAREXEL for $88.10 per share in cash in a transaction valued at approximately $5B, including PAREXEL’s net debt.

PAREXEL International Corporation provides clinical research and logistics, medical communications, consulting, commercialization, and advanced technology products and services for pharmaceutical, biotechnology, and medical device industries worldwide.

The purchase price represents a 27.9% premium to PAREXEL’s unaffected closing stock price on May 5, 2017, the last trading day prior to published market speculation regarding a potential transaction involving the Company; a 38.5% premium to the unaffected 30-day volume weighted average closing share price of PAREXEL’s common stock ended May 5, 2017; and a 23.3% premium to the Company’s undisturbed 52-week high.

“Today’s announcement is the culmination of a comprehensive review of the opportunities available to the Company, including interest solicited and received from multiple parties with the assistance of independent financial and legal advisors. Having considered these opportunities, the PAREXEL Board of Directors unanimously determined that this all-cash transaction and the significant, certain value it provides is in the best interest of PAREXEL shareholders, as well as our company,” said Josef von Rickenbach, Chairman and CEO of PAREXEL.

Bank of America Merrill Lynch (BAC) and J.P. Morgan Chase Bank, N.A. (JPM) have provided committed financing for the transaction. The transaction is expected to close early in the fourth quarter of 2017, subject to the approval of a majority of PAREXEL shareholders and the satisfaction of other customary closing conditions.

PAREXEL expects to hold a Special Meeting of Shareholders to consider and vote on the proposed agreement with Pamplona as soon as practicable after the mailing of the proxy statement to shareholders.

The PAREXEL Board of Directors unanimously approved the transaction and intends to recommend that all PAREXEL shareholders vote to approve the agreement with Pamplona.

Upon the completion of the transaction, PAREXEL will become a privately held company and shares of PAREXEL’s common stock will no longer be listed on any public market.

Goldman Sachs & Co. LLC  (GS) is acting as financial advisor to PAREXEL, and Goodwin Procter LLP is serving as legal counsel. Perella Weinberg Partners LP is acting as financial advisor to Pamplona, and Kirkland & Ellis LLP is serving as legal counsel.

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Novadaq sold for $701 million

Stryker to buy Novadaq for $701M

The transaction will be carried out by way of a court approved plan of arrangement under the Canada Business Corporations Act

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#Novadaq Technologies (NVDQ) announced that it has entered into a definitive arrangement with Stryker (SYK) pursuant to which Stryker has agreed to acquire all of the issued and outstanding shares of Novadaq for $11.75 per share in cash, implying a total equity value of approximately $701M.

Novadaq Technologies Inc. develops, manufactures, and markets fluorescence imaging products for use by surgeons in the operating room and other clinical settings in the United States and internationally. The company offers SPY Elite, a fluorescence imaging system that enables surgeons performing open procedures, such as breast and other reconstruction, gastrointestinal, and cardiothoracic surgery, to visualize microvascular blood flow and perfusion in tissue intraoperatively. It also provides PINPOINT endoscopic fluorescence imaging systems; LUNA fluorescence angiography system that provides clinicians with real-time visualization of tissue perfusion in patients.

Stryker Corporation (SYK) operates as a medical technology company.

The transaction will be carried out by way of a court approved plan of arrangement under the Canada Business Corporations Act and will require the approval of, among others, the holders of at least 66 2/3% of the Novadaq Shares present in person or represented by proxy at a special meeting of Novadaq shareholders to be called to consider the Arrangement.

The Special Meeting is expected to be held on or about August 4.

Novadaq’s board and the Special Committee have also received a fairness opinion from each of Piper Jaffray and Perella Weinberg Partners in connection with the Arrangement to the effect that, as of the date of such opinions, and subject to the assumptions, limitations and qualifications set forth therein, the consideration to be received by Novadaq’s shareholders pursuant to the Arrangement is fair from a financial point of view.

In addition to shareholder and court approvals, the Arrangement is subject to applicable regulatory approvals, including Canadian Competition Act and U.S. Hart-Scott-Rodino approvals, and the satisfaction of certain other closing conditions customary in transactions of this nature. The transaction is not subject to a financing condition.

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PerkinElmer to buy EUROIMMUN for $1.3B in cash

PerkinElmer to buy Germany’s EuroImmun for $1.3B in cash

PerkinElmer reaffirms its 2017 revenue and EPS guidance

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PerkinElmer (PKI) announced that it has entered into a definitive agreement to acquire EUROIMMUN Medical Laboratory Diagnostics AG. The agreement provides that PerkinElmer will acquire up to a 100% stake in EUROIMMUN.

The total purchase price of the transaction based on all outstanding shares being acquired will be approximately $1.3B in cash.

EUROIMMUN is based in Lubeck, Germany, with approximately 2,400 employees. The company has extensive expertise and capabilities across immunology, cell biology, histology, biochemistry and molecular biology.

EUROIMMUN is expected to generate approximately $310M in revenue this year, and over the last five years, the company has averaged revenue growth of 19%.

In 2016, the company generated sales in more than 130 countries worldwide, with approximately 45% of revenues in China, 30% in Europe, Middle East & Africa, 5% in the Americas and 20% in Rest of World.

The transaction is subject to customary closing conditions and is currently anticipated to close in the fourth quarter of 2017 following the receipt of required standard regulatory approvals. The acquisition is expected to be accretive to PerkinElmer’s 2018 non-GAAP EPS results by approximately 28c-30c. Additionally, PerkinElmer is reaffirming its 2017 revenue and EPS guidance.

PerkinElmer is reaffirming its 2017 revenue and EPS guidance following the  announcement of the EUROIMMUN acquisition.

PerkinElmer, Inc. provides products, services, and solutions to the diagnostics, research, environmental, industrial, food, and laboratory services markets worldwide. The company operates through two segments, Discovery and Analytical Solutions and Diagnostics.

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