Thermo Fisher Scientific Inc. said on Monday it would buy Dutch drug ingredients maker Patheon NV, as it looks to become a one-stop shop for contract drug development and manufacturing.
The offer price of $35 per share represents a premium of about 35 percent to Patheon’s Friday close. Patheon’s shares were trading at $34.60, just shy of the offer.
Thermo Fisher, the world’s No. 1 maker of scientific instruments, provides research, clinical trial and production services to the biopharmaceutical industry. Patheon offers a broad range of services from regulatory consulting to making drug ingredients and finished medicines.
As drugmakers increasingly vie to shave costs and clinical trial times, Patheon’s drug manufacturing abilities will help Thermo Fisher grab a bigger slice of the fragmented contract development and manufacturing market, which the company estimates is worth about $40 billion.
“Thermo Fisher already had a developing and strong position in clinical trial manufacturing and now expands that arm into drug manufacturing, which is likely to highlight its growing presence in the market of bioproduction and bioprocessing,” Leerink analysts wrote in a client note.
The contract research space is in the midst of a wave of consolidation with INC Research Holdings Inc (INCR.O) last week saying it would merge with inVentiv Health Inc in a $4.6 billion deal to help it win contracts with large pharma companies.
The Patheon deal, including debt, represents a purchase price of about $7.2 billion. Patheon, which went public last July, generated about $1.9 billion in revenue last year.
Patheon has manufactured more U.S. Food and Drug Administration approved products than any peer, but the acquisition follows a difficult start to its public life, Jefferies analysts said.
The deal is expected to be completed by the end of 2017 and will immediately add to Thermo Fisher’s adjusted profit by 30 cents in the first full year after close.
Thermo Fisher has entered into agreements with affiliates of JLL Partners and Royal DSM, whose holdings represent about 73 percent of Patheon shares, under which they will tender their shares in the transaction.
Goldman Sachs & Co is acting as financial adviser to Thermo Fisher, and Wachtell, Lipton, Rosen & Katz is serving as legal counsel.
Morgan Stanley & Co is Patheon’s financial adviser, and Skadden, Arps, Slate, Meagher & Flom LLP is its legal counsel.
By Natalie Grover
Source: Reuters
Giovanni Caforio, the former CEO of Bristol Myers Squibb, is set to become the next board chairman of Novartis, which on Tuesday proposed the pharmaceutical industry veteran as its pick to replace Joerg Reinhardt in the role next year. Reinhardt has served as Novartis’ chair since 2013 and plans to retire when his 12-year term ends in 2025.
GE HealthCare has raised the curtain on two ultrasound systems equipped with artificial intelligence programs designed to assist in diagnosing conditions in women’s health, including obstetric exams. The Voluson Signature 20 and 18 imaging systems include AI tools capable of automatically identifying and annotating measurements of fetal anatomy.
Scientists from the University of Edinburgh’s School of Chemistry have revealed a new sustainable method of manufacturing complex molecules that could reduce waste produced during drug production. The method published in Nature Chemistry could help to prevent severe side effects caused by drugs that can exist as enantiomers.
