Inside the $12.2 Billion Becton Dickinson, CareFusion Deal
Becton, Dickinson & Co. (NYSE: BDX) recently announced that it will be acquiring the San Diego biomedical business CareFusion (NYSE: CFN) for $12.2 billion.
The purchase price is nearly three times CareFusion’s value on its first day of trading, when it closed with a market valuation of $4.2 billion.
The deal, expected to close in the first half of next year, will be the second largest purchase of a life science company in the Southern California region, according to U-T San Diego. The largest was the sale of Life Technologies in Carlsbad to Thermo Fisher Scientific, officially concluded in February for $13.6 billion.
The deal is the latest in a series of mergers and acquisitions within the health care industry, particularly in the medical technology sector as companies continue to seek greater efficiency.
The combination of the two companies’ complementary product portfolios will offer integrated medication management solutions and smart devices, from drug preparation in the pharmacy to dispensing on the hospital floor and administration to the patient. It will create one of the five largest medical device companies in the world.
The acquisition will improve quality of patient care and reduce health care costs by addressing unmet needs in hospitals, hospital pharmacies and alternate sites of care to increase efficiencies and reduce medication administration errors.
Under the terms of the transaction, Becton will pay $58 a share for CareFusion, most of that in cash. Upon closing, Becton shareholders will own approximately 92 percent of the combined company and CareFusion shareholders will own approximately 8 percent.
“BD’s acquisition of CareFusion allows us to align our highly complementary technologies and products to address unmet needs in the growing $20 billion global medication management industry, which leverages BD’s world-wide infrastructure,” said Vincent A. Forlenza, Becton, Dickinson’s Chairman, CEO and President. “With the targeted cost savings we have identified and the growth opportunities we see in bringing CareFusion products to more patients and healthcare workers around the world, we expect this transaction to create meaningful value for our shareholders, customers, employees and other stakeholders.”
CareFusion was formed in 2009 as a spinoff from Cardinal Health, bringing together well-known lines of medical equipment developed in San Diego by three companies — IVAC, IMED and Pyxis.
Goldman Sachs advised BD, and Skadden, Arps, Slate, Meagher & Flom provided legal advice. Perella Weinberg Partners and Barclays advised CareFusion and Wachtell, Lipton, Rosen & Katz provided legal advice.
NHS trials test that predicts sepsis 3 days in advance
A new test that can predict sepsis before the patient develops symptoms is being trialled at a National Health Service (NHS) hospital in the south of England.
Clinicians at Portsmouth’s Queen Alexandra Hospital are leading medical trials of the blood test, which they hope will help them save thousands of lives a year.
The test is being developed by government spin-out company Presymptom Health, but the research began over 10 years ago at the Defence Science and Technology Laboratory (Dstl). This included a study of 4,385 patients and more than 70,000 samples, the largest study of its kind at the time.
From the samples taken, a clinical biobank and database were generated and then mined using machine learning to identify biomarker signatures that could predict the onset of sepsis. The researchers found they were able to provide an early warning of sepsis up to three days ahead of illness with an accuracy of up to 90%.
Unlike most other tests, Presymptom Health identifies the patient’s response to the disease as opposed to detecting the pathogen. This is an important differentiator, as sepsis occurs as a result of the patient's immune system’s overreaction to an infection or injury, which can then cause life-threatening organ dysfunction.
Worldwide, an estimated 49 million people a year contract sepsis, while in the UK almost two million patients admitted to hospital each year are thought to be at risk of developing the condition. If Presymptom's test is effective, it could save billions of pounds globally and improve clinical outcomes for millions of sepsis patients.
The initial trials at Queen Alexandra Hospital will last 12 months, with two other sites planned to go live this summer. Up to 600 patients admitted to hospital with respiratory tract infections will be given the option to participate in the trial. The data collected will be independently assessed and used to refine and validate the test, which could be available for broader NHS use within two years.
If successful, this test could also identify sepsis arising from other infections before symptoms appear, which could potentially include future waves of COVID-19 and other pandemics.
Dr Roman Lukaszewski, the lead Dstl scientist behind the innovation, said: “It is incredible to see this test, which we had originally begun to develop to help service personnel survive injury and infection on the front line, is now being used for the wider UK population, including those fighting COVID-19.”