Assisted-Living Site Sprouts in Aliso Viejo; OC Agencies Get Federal Money
A reporting service that tracks healthcare mergers and acquisitions found less enthusiasm for such deals in the third quarter.
Irving Levin Associates Inc. of New Canaan, Conn., reported that 174 transactions worth $7.9 billion occurred in the past quarter. The dollar amount is 68% lower than in the second quarter. Deal volume in the third quarter declined by 16%, down from $24.4 billion spent on 208 transactions during the previous quarter.
As for the deals themselves, 96 involved technology and 78 involved services. The largest sectors were biotechnology with 29 deals; medical devices with 26; pharmaceuticals with 25; and hospitals with 18.
Orange County companies included in the report were Beckman Coulter Inc., Fullerton, which acquired Anthos Labtec Instruments GMBH of Austria for an undisclosed amount; Interpore Cross International Inc., Irvine, which purchased American OsteoMedix Corp. of Virginia for $24.8 million; and Cartesian Technologies Inc., an Irvine-based company that was acquired by Genomic Solutions Inc., Ann Arbor, Mich., for $16.2 million.
As for money, 71%, or $5.68 billion, of the dollars spent during the quarter went to medical technology, down from $22.4 billion in the second quarter. Healthcare service deals in the third quarter totaled $2.26 billion, a slight jump from $2 billion spent in the prior quarter.
” The decline in transactions was expected as the economy weakened and equity values dropped,” said Stephen Monroe, a Levin Associates partner, in a release. “However, the plunge in dollar value was unusual and due to a sharp decline in large deals, with only 15 deals priced at more than $100 million.”
Overall quarter-to-quarter declines, according to Levin Associates, “may be partially attributed to an economy in near recession and the suspension of capital markets following Sept. 11.”
Levin Associates also noted that long-term care, laboratory and hospital sectors maintained recent activity levels during the quarter. Other healthcare services sectors, such as home health, managed care and physician medical groups, declined, showing little indication of investor interest.
As for the rest of the year, Levin Associates predicted that the majority of healthcare merger and acquisition activity is expected to continue in the third quarter’s leading sectors.
Aliso Viejo Getting Assisted Living
Construction is about to start on The Covington, a $90 million continuing care retirement community in Aliso Viejo.
When complete, Covington is expected to employ about 200 people. The Episcopal Home, owner of the Kensington in Alhambra and the Canterbury in Rancho Palos Verdes, is the Covington’s sponsor.
Covington is set to include 24 cottages and 130 apartments for residential living, 30 assisted living suites with a memory loss and Alzheimer’s “neighborhood,” and a 24-bed skilled nursing care center. More than two-thirds of the cottages and apartments are reserved, according to community officials.
Getting into Covington will cost. Entrance fees run from $219,000 to more than $600,000. Officials said that residents or their estate will receive 90% of the entrance fee back if the resident leaves or dies.
Program Gets Federal Funds
A group of Orange County agencies received an $823,260 grant from the Department of Health and Human Services.
The group plans to use the money to design and develop a pilot program to offer healthcare coverage to uninsured workers employed by small businesses and uninsured children.
The project is a joint effort of CalOPTIMA, OC’s managed healthcare plan for MediCal beneficiaries, the county Health Care Agency, the Coalition of Orange County Community Clinics, the Orange County Medical Association, the Healthcare Association of Southern California, the Orange County Children and Families Commission and the Health Care Council of Orange County.
Data from the 1999 spring report of the Orange County Health Needs Assessment showed that one in four non-elderly OC residents and almost one in five of the area’s children lack coverage.
Bits and Pieces:
NeoTherapeutics Inc., Irvine, said NeoOncoRx, a subsidiary, signed an agreement with Bristol-Myers Squibb Co. to develop Elsamitrucin, an anti-cancer drug. The agreement grants NeoOncoRx worldwide rights to develop and market Elsamitrucin, an anti-tumor antibiotic that was discovered by Bristol-Myers Squibb. NeoOncoRx said it plans to start a phase II clinical study of Elsamitrucin in non-Hodgkin’s lymphomas to further determine the pharmaceutical’s efficacy GenSci Regeneration Sciences Inc., Irvine, said it was issued a U.S. patent for “reverse phase connective tissue repair composition.” The patent covers several products made by GenSci OrthoBiologics Inc., a subsidiary … Hoag Cancer Center, Newport Beach, reported that five-year survival rates for its patients with invasive cancer diagnosed between 1989 and 1996 were 65%, as compared with the national average of 60%. Hoag officials said the rate was nine points higher than the cancer center’s rates during the previous seven-year period … William Albright Jr., chief executive of Nexell Therapeutics Inc., Irvine, was a presenter at the BioExchange 2001 annual life science investment forum in Amsterdam. Roberts Mitani Aqua Partners LLC, a New York advisory and private equity group, hosted the forum The American Cancer Society, including its Orange County region unit, is having its 25th Great American Smokeout on Thursday.
