GE Sells Off Biopharma Business Marking A Strategic Shift From New CEO Who Has Big Plans For Company’s Health Care Division
GE Chief Executive Larry Culp has kept the company on track for a spinoff of its entire health-care business, which includes life-sciences operations as well as a sizable business making MRI machines and other equipment, in an initial public offering later this year.
The Associated Press:
GE Sells Biopharma Unit For $21 Billion
General Electric is selling its biopharma business to Danaher Corp. for $21.4 billion as it continues to sell off chunks of a once sprawling conglomerate. The biopharma unit, part of GE Life Sciences, generated revenue of about $3 billion last year. Danaher said after tax benefits, the deal will have a price tag that is closer a $20 billion. The mostly-cash transaction is expected to close in the fourth quarter of this year. Danaher, a medical technology company based in Washington, D.C., said GE’s biopharma segment will operate as a separate company within Danaher’s $6.5 billion Life Sciences division. (2/25)
The Wall Street Journal:
GE To Sell Its Biotech Business To Danaher For $21 Billion
The proposed sale marks a strategic shift by Mr. Culp. Since taking over as CEO in October, he had kept GE on track for a spinoff of its entire health-care business in an initial public offering later this year. The biotech deal gives GE funds to fix its balance sheet and will allow the company to “play a little more offense” in restructuring itself, Mr. Culp said in an interview Monday. “So folks don’t look at us like a desperate seller,” he said. “We are on better footing.” He said management now plans to focus on closing the biotech sale to Danaher this year, while re-evaluating plans for an IPO of the rest of the health-care division, which primarily makes MRI machines and hospital equipment. (Gryta, 2/25)
Bloomberg:
GE Jumps As $21.4 Billion Bio-Pharma Sale Lifts New CEO’s Revamp
GE jumped 6.4 percent to $10.82 at the close in New York, the highest level since Oct. 29. The shares have advanced 43 percent this year, the best performance on a Standard & Poor’s sub-index of U.S. industrial companies. That’s a sharp turnabout from GE’s plight at the end of 2018, as a two-year stock collapse wiped out more than $200 billion in shareholder value. The Boston-based manufacturer has been reeling from mounting debt, cash shortfalls and a deep slump in the market for gas turbines. (Clough, 2/25)
In other pharmaceutical news —
Stat:
Is Allergan Too 'Sanguine' Over New Competition For Botox?
As Allergan (AGN) faces pressure from a big hedge fund for “chronic underperformance,” a survey of doctors suggests the drug maker may be “overly sanguine” about new competition for its Botox wrinkle smoother, and that sales growth and operating margins for the key product could take a hit. Specifically, more than 75 percent of dermatologists reported they would be at least moderately more likely to offer a forthcoming treatment called Jeuveau to their existing Botox patients, if the new medication costs significantly less for them to purchase. Notably, Wall Street analysts expect Evolus (EOLS), which recently won regulatory approval for Jeuveau, to sell its drug at a discount of up to 25 percent. (Silverman, 2/25)
Kaiser Health News:
In Florida, Drug Re-Importation From Canada Finds New Champions, Old Snags
Florida Gov. Ron DeSantis said Wednesday he intends to bring down skyrocketing drug prices by leaning on an existing federal law that could enable the state to import prescription meds wholesale from Canada, where they’re much cheaper. He’s citing direct support from President Donald Trump, whose administration would have to approve the endeavor. “He not only supports this, he is enthusiastic,” DeSantis said at a news conference northwest of Orlando. But it’s not clear Florida’s idea has actually gotten that level of commitment. (Luthra and Galewitz, 2/25)
Miami Herald:
Macleods Recalls One Lot Of Losartan For NDEA Presence
Macleods Pharmaceuticals recalled one lot of blood pressure and heart medication Losartan over the presence of NDEA, joining the many companies that have recalled some of its Losartan, Valsartan or Irbesartan over the probable carcinogen. Though the impurity N-nitrosodiethylamine (NDEA) occurs naturally in many places, the International Agency for Research on Cancer classifies it as a “probable human carcinogen.” (Neal, 2/25)
