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Trump considers HHS revamp; J&J gets $2.8B offer for sterilization unit

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A Pharmaceutical Company Capitalizes on M&A Activity with Brokerage Research

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2021 Year in Review: Highlighting Key Investment Banking Trends

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Insight Weekly: US stock performance; banks' M&A risk; COVID-19 vaccine makers' earnings

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Global M&A By the Numbers: Q3 2021


Trump considers HHS revamp; J&J gets $2.8B offer for sterilization unit

Top news

* The Trump administration may be considering restructuring the U.S. Department of Health and Human Services, potentially adding certain welfare programs under the agency's already vast umbrella. The White House may seek permission from Congress to move the Supplemental Nutrition Assistance Program, or SNAP — commonly known as food stamps — to HHS, along with other programs, such as school meal programs and nutrition education, alleviating the U.S. Department of Agriculture of that responsibility, according to a June 6 Politico report.

* Johnson & Johnson received a binding offer of $2.8 billion for its advanced sterilization products business from industrial equipment maker Fortive Corp. The business, a division of the pharmaceutical giant's surgical instruments unit, Ethicon Inc., sells products for cleaning medical devices to prevent infections.

* Activist investor Carl Icahn bought a small stake in Allergan PLC, Reuters reported, citing people familiar with the matter. The investment comes as investors urge the company to restructure its board and focus on existing businesses instead of acquisitions.

* Switzerland's attorney general ruled that Novartis AG will not face the criminal court over the payments it made to a shell company set up by U.S. President Donald Trump's personal lawyer, Michael Cohen, The Wall Street Journal reported. The attorney general's office found there was insufficient evidence to warrant the start of criminal proceedings.

* Athenahealth Inc. President and CEO Jonathan Bush stepped down from his positions, effective immediately, as the board has started a process to explore strategic alternatives, including a sale or a merger. Shareholders in recent weeks have been pushing for change at the healthcare technology company.

* The Democratic Republic of the Congo's health ministry greenlighted the real-life clinical studies of five experimental drugs to fight Ebola, paving the way for a potential treatment for the disease that has claimed at least 25 lives in an ongoing outbreak, Bloomberg News reported.

* The U.S. Food and Drug Administration approved 44% fewer new drugs through April, compared to the same period in 2017, according to a report by Fitch Ratings. The FDA cleared 10 new molecular entities in the first four months of 2018, the rating agency said.

M&A and capital markets

* Takeda Pharmaceutical Co. Ltd. now owns 90.83% of voting rights in TiGenix NV after the closing of the first acceptance period in its public takeover bid. A second acceptance period for TiGenix shareholders in the U.S. and Belgium starts June 6 and June 20, respectively.

Meanwhile, Takeda said shareholders of both the company and Shire PLC would have the opportunity to vote on Takeda's offer to acquire Shire. The Japanese drugmaker was clarifying comments by Takeda President and CEO Christophe Weber, cited by a recent Bloomberg News report, wherein he said: "In any case, Shire will be approved by shareholders."

* Shanghai-based Hua Medicine (Shanghai) Ltd. is looking to raise about US$200 million in an IPO in Hong Kong, the South China Morning Post reported.

Drug and product pipeline

* Cellectar Biosciences Inc.'s lead drug candidate CLR 131 received the U.S. FDA's rare pediatric disease designation for treating rhabdomyosarcoma, a rare cancer that affects children.

* The U.K. National Institute for Health and Care Excellence did not recommend Janssen Biotech Inc.'s Zytiga, or abiraterone, for treating certain prostate cancer patients as the Johnson & Johnson unit's economic model did not reflect the number of treatments available to people with the disease.

Operational activity

* U.S. drugmaker Merck & Co. Inc. may store up as much as six months' worth of goods as part of contingency plans ahead of a potential temporary supply blackout when Britain exits the EU, Bloomberg News reported, citing a person familiar with the matter. "Our first and foremost focus at this time is to develop plans which ensure continued access to our medicines throughout the Brexit process," a spokeswoman for Merck told Bloomberg.

* Pfizer Inc. is investing $600 million in biotechnology and other emerging growth companies through Pfizer Ventures, the U.S. drug giant's venture investment vehicle. Pfizer Ventures will seek to invest about 25% of its available capital, equivalent to about $150 million, in early-stage neuroscience companies — or those focused on the study of the nervous system.

* Roche Holding AG's California-based unit Genentech Inc. entered into a collaboration worth up to $534 million with Microbiotica, a spinout from the U.K.'s Wellcome Sanger Institute, to develop and commercialize biomarkers, targets and drugs for inflammatory bowel disease.

* H. Lundbeck A/S said it will probably pay $52.6 million to settle the U.S. Justice Department investigation into allegedly improper donations to charities that provide financial help to patients who use the company's products. The potential settlement comes as U.S. investigators conduct an industrywide probe into various drugmakers' donations to patient-assistance charities.

* Johnson & Johnson is facing its biggest trial yet in relation to allegations that the company's talc-based products could cause cancer, Reuters has a report.

Our features

ASCO roundup: Merck hits goal in lung cancer; cell therapies remain effective: Lung cancer therapies and cell therapies took center stage at the 2018 annual meeting of the American Society of Clinical Oncology, the year's largest cancer meeting.

Of Mice Not Men: Drugs for new tumors, sleeping cancers; changing tastes: In this week's column on early stage studies, a new cancer drug that targets new tumors, a toe infection medicine that can prevent bowel cancer relapses, and manipulating taste to treat eating disorders.

Other features

* The Wall Street Journal has a report on the newly signed "Right to Try" law — a measure that aims to help terminally ill patients by allowing them to gain faster access to unapproved investigational treatments — and its inability to compel a drugmaker to provide the requested medicines. The story follows an op-ed in Stat that focuses on a family that was denied a "compassionate use" request for an experimental Shire drug to treat a rare lysosomal storage disorder without any legitimate medical reason.

The day ahead

Early morning futures indicators pointed to a higher opening for the U.S. market.

In Asia, the Hang Seng was up 0.81% to 31,512.63, while the Nikkei 225 rose 0.87% to 22,823.26.

In Europe, around midday, the FTSE 100 fell 0.09% to 7,705.22, and the Euronext 100 rose 0.18% to 1,061.99.

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