Eli Lilly agrees $1.4bn Point Biopharma Global deal

BY Richard Summerfield

In a deal which will strengthen the company’s oncology pipeline, Eli Lilly has announced it is acquiring Point Biopharma for $1.4bn.

Under the terms of the deal, Eli Lilly will pay $12.50 per outstanding share of Point, representing a 67 percent premium to the company’s 30-day volume-weighted average price and a premium of approximately 87 percent to Point’s closing stock price on 2 October 2023, the last trading day before the announcement of the transaction. The board of directors of both companies have approved the transaction, and Lilly and Point expect to close the deal toward the end of 2023, subject to customary closing conditions.

“Over the past few years, we have seen how well-designed radiopharmaceuticals can demonstrate meaningful results for patients with cancer and rapidly integrate into standards of care, yet the field remains in the early days of the impact it may ultimately deliver,” said Jacob Van Naarden, president of Loxo@Lilly, the oncology unit of Eli Lilly and Company. “We are excited by the potential of this emerging modality and see the acquisition of POINT as the beginning of our investment in developing multiple meaningful radioligand medicines for hard-to-treat cancers, as we have done in small molecule and biologic oncology drug discovery and development. We look forward to welcoming POINT colleagues to Lilly and working together to build upon their achievements as we develop a pipeline of meaningful new radioligand treatments for patients.”

“The combination of POINT’s team, infrastructure and capabilities with Lilly’s global resources and experience could significantly accelerate the discovery, development and global access to radiopharmaceuticals,” said Joe McCann, chief executive of Point. “I look forward to a future where patients all over the world can benefit from the new cancer treatment options made possible by the joining of our two companies today.”

Eli Lilly has agreed to a string of deals this year, including the $2.4bn buyout of Dice Therapeutics, the $1.93bn purchase of privately held Versanis, and Siglon for around $310m. These deals have been oncology focused, and the deal for Point will grant Eli Lilly access to experimental therapies that enable precise targeting of cancer. Point Biopharma is currently testing radioligand therapy candidates, PNT2002 and PNT2003, in late-stage studies. Topline data from these studies are expected in the fourth quarter of 2023.

News: Lilly eyes targeted cancer therapies with $1.4 billion Point Biopharma deal

European VC investment €96bn over last 10 years, reveals new report

BY Fraser Tennant

Venture capitalists (VCs) invested €96bn in almost 27,000 European companies over the past decade, including more than €18bn in 2022 alone, according to a new report by Invest Europe.

In its ‘Venture Capital: Fuelling European Innovation’ report, Invest Europe highlights VC’s contribution to a stronger European economy and a better society – digging deep into the data on fundraising, investment, returns to investors and job creation, among others.

The report shows the step change in European VC fundraising over the five years to 2022, including an eight-fold increase in capital raised by Nordic VCs and a three-fold increase in the Germany, Austria and Switzerland (DACH) region, as capital committed to funds reached a record €23bn last year.

In addition, Invest Europe highlights European VC’s 12 percent net return since inception, far outperforming the Morgan Stanley Capital International (MSCI) Europe benchmark, which returned 7.67 percent per annum over the same period.

Furthermore, recent performance has accelerated, with European VC delivering a net return of 23.07 percent over 10 years, creating wealth for long-term investors including funds of funds investing on behalf of pension funds, family offices and corporate investment divisions.

“European VC is the fuel that keeps the engine of innovation running,” said Eric de Montgolfier, chief executive of Invest Europe. “With the help of VC investment and expertise, European start-ups are at the forefront of developments in software and cloud computing, driving deep tech advances in artificial intelligence and robotics, creating cutting-edge biotech treatments for cancer and infectious diseases, and pushing the boundaries of cleantech solutions for a cleaner, greener future.”

The report also outlines the role of venture capital as a cornerstone of European economies and communities, with the ecosystem providing jobs for nearly 900,000 people at the end of 2021. Companies backed by VC have generated double-digit employment growth in most years since 2018, including 15.3 percent net new jobs in 2021, compared to 1.2 percent growth for all European companies.

Mr de Montgolfier concluded: “Europe’s VC and start-up ecosystem is not only producing transformative technologies that will change people’s lives; it is also generating social and economic benefits that can improve livelihoods, from new jobs to wealth creation for long-term investors.”

Report: Venture Capital: Fuelling European Innovation Report

Digital skills gap hampering banks, claims new report

BY Fraser Tennant

A rapidly-widening talent gap is hampering traditional banks’ ability to compete and stay relevant in a digital-first world, according to a new report by The Josh Bersin Company. The majority of banks around the world are struggling to meet the need to digitalise.

In its ‘Consumer Banking Under Siege: Addressing the Digital Capability Gap’, the research reveals that most banks’ skills bases are falling behind, despite attempts to hire fresh talent, and the sector will see a massive shortage of people with suitable digital and technology skills by 2025.

Unless banks face this talent issue, the report suggests that longstanding players will never catch up with their modern counterparts, potentially losing relevance within five to 10 years. The report also suggest that banks identified as ‘trailblazers’ have a number of things to teach the rest of the market.

The report’s key findings include: (i) the digital transformation of banks is not a technology problem, but a talent challenge; (ii) most banks are struggling to offer the great digital experiences that clients now expect, but their skills base is failing to keep up, despite attempts to hire fresh talent; (iii) trailblazer banks – those moving in the right strategic direction and seeing positive business results – are applying talent intelligence techniques to look laterally at opportunities to reskill employees out of roles that are becoming obsolete; and (iv) as a secondary strategy, leading banks are also proactively targeting suitable tech talent and designing ‘irresistible’ workplaces to attract and keep them.

“Most consumer banks are currently trying to hire their way out of this talent challenge,” said Stella Ioannidou, senior research manager at The Josh Bersin Company and author of the report. “But there are not enough people with relevant tech skills to go round, particularly those who are also experienced in the banking industry.”

For example, in the US, the report notes that in 2023 there was a 54,000 discrepancy in the talent available, a figure which, if it persists, will grow into a 350,000 gap in future-ready technologists with banking experience.

“Even if banks look for tech talent without direct sector experience, they face fierce talent competition from consulting firms, IT service providers, Big Tech and so on, so they need a different approach,” she continued. “They need to reskill the people they already have and make it a priority to keep employees close and engaged – and they need to do that now, as it will take time to build the capabilities and skills they so badly need.”

Report: Consumer Banking Under Siege: Addressing the Digital Capability Gap

Cisco strikes $28bn Splunk deal

BY Richard Summerfield

In a deal which represents the biggest technology transaction of the year to date, Cisco Systems has agreed to acquire cyber security firm Splunk in a $28bn deal. The deal will create one of the world’s largest software companies upon completion.

Cisco offered $157 in cash for each share of Splunk, a 31 percent premium to the company’s last closing price before the deal was announced.

The acquisition has been unanimously approved by the boards of directors of both Cisco and Splunk, and it is expected to close by the end of the third quarter of 2024, subject to regulatory approval and other customary closing conditions, including approval by Splunk shareholders. The deal is expected to improve Cisco’s gross margins in the first year and non-generally accepted accounting principles (GAAP) earnings in year two.

“We’re excited to bring Cisco and Splunk together,” said Chuck Robbins, chair and chief executive of Cisco. “Our combined capabilities will drive the next generation of AI-enabled security and observability. From threat detection and response to threat prediction and prevention, we will help make organizations of all sizes more secure and resilient.”

“Uniting with Cisco represents the next phase of Splunk’s growth journey, accelerating our mission to help organizations worldwide become more resilient, while delivering immediate and compelling value to our shareholders,” said Gary Steele, president and chief executive of Splunk. “Together, we will form a global security and observability leader that harnesses the power of data and AI to deliver excellent customer outcomes and transform the industry. We’re thrilled to join forces with a long-time and trusted partner that shares our passion for innovation and world-class customer experience, and we expect our community of Splunk employees will benefit from even greater opportunities as we bring together two respected and purpose-driven organizations.”

Splunk’s technology helps businesses monitor and analyse their data to minimise the risk of hacks and resolve technical issues faster. Cisco will utilise Splunk’s technology to strengthen its software business, which relies heavily on AI and provides a variety of cyber security services, such as building tools to protect users and digital businesses from data breaches.

In the quarter ended 31 July 2023, Splunk’s annual recurring revenue was $3.9bn, up 16 percent on the same period last year. Its revenue for the quarter was $910m, beating analysts’ expectations.

The deal for Splunk will dwarf Cisco’s previous largest deal, the 2006 acquisition of cable set-top box maker Scientific Atlanta for $6.9bn.

News: Cisco to buy cybersecurity firm Splunk for $28 billion

Smurfit Kappa to acquire rival WestRock

BY Richard Summerfield

In a deal that will create the world’s biggest paper and packaging company, Smurfit Kappa has agreed to acquire its rival WestRock for $11bn.

The newly combined company will be known as Smurfit WestRock and will be run through a holding company incorporated and domiciled in Ireland. Subject to the satisfaction of closing conditions, the transaction is expected to complete in the second quarter of 2024.

Under the terms of the deal, WestRock shareholders will receive one Smurfit WestRock share and $5 cash, equivalent to $43.51 per share, while Smurfit Kappa shareholders will receive one new share. Existing Smurfit Kappa shareholders are expected to own approximately 50.4 percent of Smurfit WestRock and WestRock stockholders the remaining 49.6 percent.

According to a statement announcing the deal, the combined company will opt for a New York primary listing as around 65 percent of its revenues are set to be in the US and Latin America, and because “multiples and the pool of capital over there is bigger for companies like ours”.

The companies had a combined revenue of roughly $34bn in the year to July, which would make Smurfit WestRock the largest listed global packaging firm by that metric. At present, Smurfit, which operates in 22 European countries and 13 in South, Central and North America, is Europe’s largest paper and packaging producer. WestRock is the second-largest packaging company in the US.

“This incredibly exciting coming together of our two great companies is a defining moment within the global packaging industry,” said Tony Smurfit, chief executive of Smurfit Kappa. “Smurfit WestRock will be the ‘Go-To’ packaging partner of choice for customers, employees and shareholders. We will have the leading assets, a unique global footprint in both paper and corrugated, a superb consumer and specialty packaging business, significant synergies, and enhanced scale to deliver value in the short, medium and long term.”

“We look forward to working with Smurfit Kappa to build a leading global platform that harnesses the strength of WestRock’s consumer portfolio, presents a truly comprehensive offering of packaging solutions for customers and delivers meaningful value to our shareholders today and into the future,” said David Sewell, chief executive of WestRock. “Smurfit Kappa shares our deep commitment to innovation across the packaging lifecycle, and we are confident that Smurfit WestRock will continue to lead the industry forward.”

News: Smurfit Kappa strikes $11 bln WestRock deal to create packaging leader