Madison Dearborn Partners acquires majority interest in Walgreens Infusion Services
DEERFIELD, Ill. — Walgreens on Tuesday announced that it has signed a definitive agreement with Madison Dearborn Partners, a leading private equity firm based in Chicago, under which MDP will acquire a majority interest in Walgreens Infusion Services.
“This agreement will enable us to continue to strengthen the Walgreens infusion offering as part of our broad health care portfolio as we work closely with the new company, which will have a dedicated focus on this $14 billion and growing U.S. market,” stated Mike Ellis, VP Walgreens specialty pharmacy and infusion services. “With Walgreens and MDP’s expertise, capabilities and resources, the new company will have an opportunity to play an even greater role in improving the quality and cost of infusion services.”
When the transaction closes, Walgreens Infusion Services will become a new independent, privately-held company. MDP will own a majority interest in the new company. Walgreens Boots Alliance will own a significant minority interest and have representatives on the company’s board of directors.
The transaction supports Walgreens focus on accelerating its core retail and specialty offerings. Walgreens Infusion Services will receive the additional investment and focused support it needs to continue to grow, while also benefiting from Walgreens Boots Alliance purchasing efficiencies.
Paul Mastrapa, current divisional VP of Walgreens Infusion Services, will serve as the new company’s CEO. Financial terms of the agreement were not disclosed. The transaction is not expected to have a material impact on the earnings per share of Walgreens Boots Alliance in fiscal year 2015.
“The new company, which will have an industry-leading management team supported by MDP and Walgreens, will be positioned to provide even greater value to patients, local health systems, health plans and pharmaceutical manufacturers,” said Mastrapa.
“MDP looks forward to our business relationship with Walgreens, and we are confident the new company is well positioned to continue to grow in the alternate-site infusion services industry,” said Tim Sullivan, managing director, Madison Dearborn Partners. “Working in close collaboration with Paul Mastrapa and his team, and also with Walgreens, we plan to invest in additional resources and new technology to enhance the company’s preeminent capabilities as an alternate site provider of critical health care services.”
Walgreens Infusion Services’ geographic footprint includes 89 infusion pharmacies and 110 alternate treatment sites in 40 states, approximately 4,700 employees and the ability to serve more than 90% of the U.S. population. Its clinical personnel, including nurses, pharmacists, technicians and dieticians, treat patients who are managing a broad range of acute and chronic conditions.
The transaction is subject to satisfaction of regulatory requirements and other conditions and is expected to close during the second quarter of calendar year 2015.
In connection with the transaction, BofA Merrill Lynch acted as financial advisor and Sidley Austin acted as legal advisor to Walgreens, and Weil, Gotshal & Manges provided antitrust counsel. MDP was advised by Barclays, Deutsche Bank and Goldman Sachs. Kirkland & Ellis acted as legal advisor to MDP and Ropes & Gray provided regulatory counsel. BofA Merrill Lynch will lead the first lien financing and Goldman Sachs Mezzanine fund is providing the second lien notes.
Rx trends 2015: Partnering and risk sharing
Fortune 50 companies are busy forming healthcare partnerships.
NEW YORK — Partner up or risk being left behind. That’s the choice facing more and more pharmacy groups grappling with accountable care, outcomes-based reimbursement and risk-sharing collaborative health networks.
With the ground shifting under their feet, pharmacy retailers are increasingly looking for new opportunities to link up with local health systems and physician networks in a continuum of care where providers share in the risks and rewards of improving wellness and preventing or successfully managing disease for millions of patients.
Health reform ushered in the era of accountable care organizations and accelerated the gradual shift to a new reimbursement model for physician, clinician and pharmacist-based health services. But even without the passage of the Accountable Care Act, cost-cutting imperatives made the rise of ACOs and risk-based integrated care models inevitable as managed care plans and health plan payers seek new ways to curb the nation’s spiraling, $2.8 trillion annual health bill.
Indeed, 21 of Fortune magazine’s top 50 U.S. companies have formed or joined healthcare partnerships that coordinate care among a network of health providers to boost patient outcomes and lower health costs for their employees, according to PricewaterhouseCoopers.
Reducing risk requires scrapping the traditional fee-for-service model of physician- and hospital-centered care focused on treating patients after they’ve gotten sick, and creating “a new kind of healthcare team,” composed of doctors, nurses, pharmacists, clinicians, health cost analysts and nutritionists “that surrounds and is part of that physician’s practice,” said David Kilgore, a physician and educator.
Supreme Court ruling protects Teva’s Copaxone patent
JERUSALEM — Teva Pharmaceutical on Tuesday announced the U.S. Supreme Court’s decision in Teva Pharmaceuticals USA vs. Sandoz et al. that reversed the Federal Circuit Court’s judgment of invalidity of Teva’s ‘808 patent for Copaxone (glatiramer acetate injection) 20 mg/mL. The Supreme Court remanded the case to the Federal Circuit for further review in light of the applicable standard the Supreme Court laid out for appellate review of claim construction.
“We are encouraged by the U.S. Supreme Court’s decision and look forward to the Federal Circuit’s review,” stated Erez Vigodman, president and CEO of Teva. “We will continue to explore all available avenues to protect our intellectual property for Copaxone 20mg/mL. Copaxone will remain a proprietary, global market leading product for the reduction in the frequency of relapses in patients with relapsing forms of MS over the product’s lifecycle.”
A ruling last year by the U.S. Court of Appeals for the Federal Circuit upheld four Teva patents that expired in May 2014, while invalidating another patent (the ‘808 patent) that is set to expire on Sept. 1, 2015. Prior to the appellate court’s decision, in July 2012 the U.S. District Court for the Southern District of New York ruled in favor of Teva and upheld the ‘808 patent for Copaxone 20 mg/mL.
“There is currently no FDA-approved follow-on version of Teva’s Copaxone,” added Rob Koremans, president and CEO of Global Specialty Medicines at Teva. “We are encouraged by the FDA’s willingness to date to have dialogue regarding the complexities of Copaxone 20 mg/mL and the potential limitations and other unknowns of purported follow-on versions.”
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