Neuren has said that it appointed a corporate and strategic adviser a few months ago. It doesn’t name names. It also states that the appointment of that adviser wasn’t in response to any third party approaches. Neuren refers to The Australian article as “media speculation”.
The Australian article has indicated that Neuren’s adviser is Jefferies. It describes Jefferies as a defence adviser. By way of explanation it states that Neuren has been fielding “buyer interest from US-based industry giants”. It also states that Neuren “is being targeted by US pharmaceutical companies”. Finally, it states that Neuren “operates in the sweet spot of a number of private equity firms such as Blackstone, which is targeting life sciences investments in a quest to capitalise on the growing demand for healthcare.”
What to make of all this?
I think that you can be almost certain that, if Jefferies has been named by The Australian, then the adviser is indeed Jefferies, even though Neuren doesn’t confirm that. AFR recently listed Jefferies as one of Australia’s “five most powerful dealmakers in 2023”.
When was the adviser appointed? If Neuren says it was a few months ago, then I think you can be certain that’s when the advising firm was appointed.
Was the appointment in response to “buyer interest from US-based industry giants”? Neuren said it wasn’t, but as others have pointed out, and I agree, that doesn’t rule out commencement of buyer interest more recently.
Who is the interested buyer/s being talked about? US-based industry giants? US pharma? Private equity firms? Blackstone, which is private equity?
I don’t think you can rule out any of these. The reference to “US-based industry giants” may well be another way of referring to large private equity firms. The likes of Carlyle/Abingworth, KKR, Bain Capital and Blackstone. The funds under management by these giants ranges from ~ US$200 bn to just shy of US$1 tn (Blackstone).
The typical type of deal seen in life sciences (such as Opthea’s with Carlyle/Abingworth) is that the private equity firm invests/provides funding at Phase 3 stage and negotiates the returns it will receive in advance. The private equity group might get its money back and/or equity and they’ll receive a percentage of revenue once the target biotech’s drug is commercialized.
And Blackstone specifically? Yes, it has done these kind of deals. Blackstone Life Sciences (BXLS) has helped bring more than 100 drugs to market. One deal it made was with Reata Pharmaceuticals in 2020. BXLS made a $350 million investment ($300m loaned against future royalties and a $50m equity investment @ $146.72 per share) to finance development of Reata’s late-stage kidney asset, rather than its Skyclaris asset for Friedreich’s ataxia. The deal was subsequently amended in early 2023 when the kidney asset was discontinued. Biogen acquired Reata for $172.50 per share just a few months later.
But in addition to these type of deals, Blackstone is said to be branching out as its “risk appetite for drug development grows”. In an article published earlier this year (last link below) it is stated that Blackstone has been “mulling the acquisition of companies with drugs still in clinical trials, as long as these companies also have some medicines that have hit the market”.
Keeping that in mind, I don’t think that the naming of Blackstone in The Australian article is purely random.
I would think that this “speculation” wouldn’t be music to the ears of Acadia (or the Baker Brothers). After courting Neuren strategically over the past 5 years, I doubt that Acadia will let go without a fight.
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