Welcome to this week’s edition of Dispensed, Business Insider’s weekly healthcare newsletter. I’m back after a weekend of fun in Austin, Texas, where the weather was hot and humid but the breakfast tacos were sublime.
What a week to jump back into the swing of things. After a somewhat quiet Monday, the healthcare team started Tuesday off early with the news that AbbVie is buying Allergan in a $63 billion deal. Between that and a slew of initial public offerings in biotech and healthcare, it made for a busy week.
Before I dive in, I wanted to see what you all thought of the news of recently departed Food and Drug Administration Commissioner Scott Gottlieb joining the board of Pfizer. It seemed to cause quite a stir, but I’m curious if this is a development that’s cause for alarm, a classic transition for high-ranking agency officials, or something else. Let me know what you think at firstname.lastname@example.org.
And I promise we received everyone’s "under 40" nominations — thank you SO much for sending those in, we’re overwhelmed by all the folks who threw their hat in for consideration. Stay tuned for more on that this summer.
Another massive pharma megamerger
In just the first six months of the year, we saw plans to combine Bristol-Myers Squibb and Celgene in a $74 billion deal and now, Botox-maker Allergan is selling to AbbVie in a $63 billion. I for one wouldn’t be surprised if we see more big combinations before the year is through.
BI’s healthcare team was all over the news of the deal.
- Emma Court broke down why right off the bat Wall Street is raising some big questions about the merger. She included probably one of my favorite analyst commentaries of all time: In reference to AbbVie and Allergan, Piper Jaffray analysts noted "Two turkeys don’t make an eagle." Read Emma’s full story here.
- Morgan Stanley and a boutique bank called PJT Partners represented AbbVie on the deal, while JPMorgan advised Allergan. It was the first big deal for former Goldman Sachs analyst Jami Rubin, who joined PJT recently. Meet the other bankers involved in the $63 billion deal.
- Relatedly, it’ll be a big payday for the three banks should the deal go through. Here’s how much each stands to make.
- Like I said, I’d be surprised if this was the last big deal we heard about this year. Clarrie Feinstein and Emma rounded up four biotechs that could be good takeover targets. Click here to find out more about them.
And for fun: here’s the history of Allergan’s blockbuster drug Botox (We have a podcast on it as well!) as well as a history of Allergan itself, which has its roots in an eye care company started in the 1940s.
A wave of healthcare IPOs
The IPO window for biotech companies appears to be wide open, as evidence by this week’s showings by Adaptive Biotechnologies and BridgeBio.
Emma was up at the NASDAQ for the opening day for both companies and came back with these dispatches.
- The CEO of 2019’s biggest biotech IPO told us how he’s upending the ‘same old corporate approach’ in healthcare with a stripped down and cost-conscious model
- The CEO of a $5.6 billion biotech that just had the year’s best post-IPO pop told told us how it’s partnering with Microsoft to build an enormous map of the human immune system
Simultaneously, a window for digital health and healthcare IT companies appears to be opening as well. Change Healthcare, a Nashville, Tennessee-based revenue-cycle-management software company spun out of the healthcare giant McKesson, on Thursday said it’s looking to raise $1 billion in its IPO. It has a valuation of about $5 billion. The Utah-based healthcare software company Health Catalyst on Thursday also filed to go public.
Which leads us to Friday’s preliminary S-1 filing by diabetes management company Livongo. The company’s looking to raise as much as $200 million and achieve a valuation of $2 billion to $2.5 billion, a source tells me.
You can read more about the company’s financials, how big of a market it’s anticipating, and what it’s all about here. And here’s a look at the investors and individuals who stand to make the most on the IPO.
Lastly, I wanted to flag some interesting conversations the healthcare team had this week.
Before heading down to Austin, I spent some time onstage catching up with Clover Health CEO Vivek Garipalli about the lessons he’s learned operating a health plan for the past five years. Crucially, we touched on the layoffs the company went through in March and the opening of Clover’s new office in Nashville.
The CEO of buzzy healthcare startup Clover Health regrets setting up shop in Silicon Valley. Here’s why he just opened an office in Nashville.
- Vivek Garipalli, the CEO of the health insurance startup Clover Health said, "If I had to do things over again, I don’t know if we would have located in San Francisco."
- The health insurance company is opening an office in Nashville where there is a booming healthcare and healthtech industry.
- Nashville is now home to over 900 companies working in healthcare.
And Emma spoke with Eli Casdin, founder of Casdin Capital, about why he’s looking past the "sexy" bets in the healthcare industry when he picks investments.
A top investor who cashed in on recent $8 billion and $5 billion biotech takeovers earlier this year told us he’s looking beyond the ‘sexy’ parts of healthcare as he places his next bets
- Since Eli Casdin founded life sciences investment firm Casdin Capital eight years ago, Casdin Capital has made winning bets on some of the biggest names in the space.
- That includes drugmakers making cutting-edge new medicines, but the firm also looks at areas that "may not seem as sexy" and obvious but are really good business opportunities, Casdin told us.
- You can think of this like the tech industry, where chip manufacturers help make the Ubers and Facebooks of the world successful.
- Healthcare is exactly the same way, which is why Casdin Capital has invested in companies like Codexis and BioLife Solutions, he said.
I’m in Chicago for the weekend for some wedding planning, but as always you can direct all questions, tips, words of encouragement to the healthcare team at email@example.com, or you can reach me directly at firstname.lastname@example.org.
- The CEO of a $5.6 billion biotech that just had the year’s best post-IPO pop told us how it’s partnering with Microsoft to build an enormous map of the human immune system
- Buzzy digital health startup Livongo just filed to go public at a $2.5 billion valuation
- A former star Goldman Sachs pharma analyst just made her first deal with AbbVie’s $63 billion bid for Botox-maker Allergan. Meet the bankers involved in the megamerger.