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Around the nation: Walgreens nearing $10B private acquisition


Walgreens Boots Alliance is close to finalizing a deal to go private through an acquisition by Sycamore Partners, in today's bite-sized hospital and health industry news from Illinois, Maryland, and New Jersey.

  • Illinois: Walgreens is close to finalizing a deal to go private through an acquisition by Sycamore Partners. According to sources familiar with the situation, the deal, which could close as soon as Thursday, is worth an estimated $10 billion. If the deal goes through as planned, Walgreens' businesses, including the U.K. pharmacy chain Boots and the U.S. healthcare provider VillageMD, would likely be split up. "I was a little skeptical that this has dragged on for three or four months, but it does seem to be accelerating and coming together," said Jeff Jonas, a portfolio manager at Gabelli Funds, which invests in Walgreens. According to the Wall Street Journal, Walgreens going private would be a landmark moment for the company, which has been in business for over 120 years and has been public since 1927. (Swetlitz, Bloomberg/Modern Healthcare, 2/27; Tse, et al., Bloomberg/Modern Healthcare, 3/3; Lombardo, et al., Wall Street Journal, 3/3)
  • Maryland: Last week, FDA announced that prescribers, pharmacists, and patients will no longer have to participate in the risk evaluation and mitigation strategy (REMS) program for the antipsychotic drug clozapine, which is used to treat schizophrenia. "Eliminating the REMS is expected to decrease the burden on the healthcare delivery system and improve access to clozapine," FDA said. Under the change, prescribers are no longer required to report patients' absolute neutrophil count (ANC) blood tests before pharmacies can dispense clozapine to patients. However, prescribers are still encouraged to monitor patients' ANC levels based on clozapine's prescribing information since there is still a risk of severe neutropenia. (Monaco, MedPage Today, 2/26)
  • New Jersey: Johnson & Johnson (J&J) has filed a lawsuit against Samsung Bioepis, arguing that the company improperly reached an agreement to supply a U.S. health insurer with a private label biosimilar of J&J's drug Stelara. According to STAT+, Samsung Bioepis previously settled patent litigation with J&J and won the right to sell a biosimilar of Stelara starting this year. So far, U.S. regulators have approved seven biosimilar versions of Stelara. However, in its lawsuit, J&J argued that a deal Samsung Bioepis reached with a large U.S. health insurer to sell a private label biosimilar of Stelara was a "surreptitious and deliberate breach" that "threatens irreparable harm" to the company. According to J&J, Samsung's deal will give the health insurer an unfair disadvantage because it can favor its own private label version of Stelara and give less preferential treatment to the branded version or other biosimilars. Although the health insurer was not publicly named in J&J's lawsuit, it was described as a "vertically integrated conglomerate" that owns a large health insurer, a pharmacy chain, and a pharmacy benefits manager, suggesting that it may be CVS Health, STAT+ reports. (Silverman, STAT+, 2/24)

Advisory Board's M&A resources

For more insights on the impact of mergers and acquisitions (M&A) on healthcare, check out these resources:

Medical group consolidation is growing and reshaping the physician landscape. This cheat sheet explains why consolidation matters, what's driving the trend, and which specialties have been impacted the most. Separately, this expert insight outlines the four must-answer questions for industry consolidation.

We also offer a market insights report on how regional health plans can grow through diversification, as well as an infographic on how health insurers are diversifying their revenue streams.


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