Hello,
Welcome to this week's edition of $4, 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 $4 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 $4. 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 lramsey@businessinsider.com.
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 $4 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.
- $4 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." $4.
- 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. $4
- Relatedly, it'll be a big payday for the three banks should the deal go through. $4
- Like I said, I'd be surprised if this was the last big deal we heard about this year. $4 and Emma rounded up four biotechs that could be good takeover targets. $4
And for fun: here's the history of $4 ($4) as well as a $4 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.
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 $4. It has a valuation of about $5 billion. The Utah-based healthcare software company $4 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.
$4 And here's a look at the $4
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.
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- 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 $4, founder of Casdin Capital, about why he's looking past the "sexy" bets in the healthcare industry when he picks investments.
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- 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 healthcare@businessinsider.com, or you can reach me directly at lramsey@businessinsider.com.
- Lydia