Bain & Co., Inc.

About two and a half years before they sealed a $3.3 billion deal , Bain Capital and its life sciences team started courting the leadership of Tanabe Pharma and its parent Mitsubishi Chemical. The approach was part of the investment firm’s desire to expand its biopharma portfolio into Japan, where recently relaxed drug approval regulations can potentially open up one of the world’s largest pharma markets to better opportunities for development and investment. The conversations originally began with Bain wishing to carve out the centuries-old pharmaceutical unit and letting Mitsubishi retain a stake in the separated company. Bain has done pharma carve-outs before, like its deal that repurposed Pfizer’s CNS assets into Cerevel (which eventually went public via a SPAC and was then acquired by AbbVie). While that model “got a certain amount of traction,” Mitsubishi instead decided to do a “straight sale” given its priorities lay in other areas of the chemicals business, Will Cozean, managing director at Bain Capital, said in an interview with Endpoints News . After deciding to do a sale process of the pharma unit, Mitsubishi then did a market check. “I’d like to think that we were probably the preferred bidder from the start of the process, but they needed to get a market check in terms of the value they were going to get,” Cozean said. It took about three or four months to get to exclusivity around New Year’s, Cozean said, and then about six more weeks to seal the deal. He said it wasn’t the longest process he’s ever been a part of, but it wasn’t a “we’re going to move mountains to announce this by JPM”-type of transaction, he said. Three M&A deals were disclosed at this year’s JP Morgan Healthcare Conference, one of which took less than two months to come together. “The reality is that the number of private equity firms that would be potentially able to do this transaction is a very short list, and so we knew that it was probably us or one or two others of our competitors in the region,” Cozean said. About 20 people at Bain were dedicated to getting the deal done, the managing director said. The $3.3 billion deal includes support from three funds at Bain: US private equity, Asia private equity and life sciences. After a yearslong relationship, the deal came to fruition. Everyone in the industry was alerted of the news just moments after the Bain team. The investment firm found out they’d gotten the green light for the deal roughly 15 minutes before the press release went out last Friday, Cozean said. After the deal closes, which is expected in the third quarter, Bain hopes to transform Tanabe, founded in the 1600s, into an even bigger commercial drugmaker. The pharma, which also has units in the US and Israel, markets treatments like the ALS drug Radicava . “It is daunting when you are taking the reins of such a traditional and historical organization that’s older than the country that I was born in. But at the same time, the core of Tanabe is so strong and the legacy is so strong,” Cozean said, that the opportunity ahead is a “really beautiful undertaking for Bain Capital.” The 5,000-employee Tanabe team has a history of great discovery platform work, said Ricky Sun, a partner at Bain Capital Life Sciences. They’ve contributed to the development of major drug classes, like SGLT2 inhibitors for diabetes, he said. “At the top end of the market, you have folks like Takeda and Shionogi and Daiichi, who are actually focused now more on the US than they are necessarily on Japan as their growth” area, Cozean said. “We think there’s an opportunity for us to play a role in bringing assets within Japan into a consolidated commercial entity and being more efficient and able to drive patient outcomes at that level.” Tanabe will look within and outside Japan for assets to license or acquire, or partnerships to form, Cozean said, noting Bain will take a “global approach” to business development. It inked an ALS pact with Dewpoint Therapeutics in December, but that type of early-stage collaboration was unique, given it could be a follow-up to Tanabe’s own ALS medicine, Cozean said. More of the go-forward deals will likely be closer to late-stage development. The pharma company has been acquisitive in the past, buying Israeli biotech NeuroDerm and its late-stage Parkinson’s program for $1.1 billion in 2017 . It’s also licensed out programs that have led to the formation of new companies, like schizophrenia biotech Kynexis , which emerged with $61 million in November 2023. Cozean hopes the investment will be a broader boon for Japan’s life sciences sector, too. “One of the things that we’re hoping to frankly have more of a front seat on, by owning Tanabe, is to really invest in the broader Japanese ecosystem of life sciences innovation,” Cozean said.

Bain Capital, an investment firm that has spread its life sciences bets mainly across companies developing novel new medicines, is acquiring Mitsubishi Tanabe Pharma Corporation in a multi-billion dollar deal that brings a portfolio of products marketed globally along with a drug pipeline spanning several key therapeutic areas. Mitsubishi Tanabe Pharma, also known as Tanabe Pharma, is the pharmaceutical division of Mitsubishi Chemical Group. Under deal terms announced Friday, this pharma unit, which traces its origins to a Japanese business started in 1638, will split off from its corporate parent to join Bain. The deal values Tanabe Pharma at 510 billion Japanese yen (about $3.3 billion). According to Mitsubishi Chemical Group financial reports, Tanabe Pharma generated 437.4 billion yen (about $2.89 billion) in revenue for the fiscal year ended March 31, 2024. That’s down 18.3% from the prior fiscal year. Meanwhile, the unit’s 62.9 billion yen (about $415.5 million) in R&D spending topped the R&D spending for all of the conglomerate’s other divisions combined. In a Friday investor presentation, Mitsubishi Chemical Group said the pharma unit requires large-scale investment to strengthen its R&D capacity and growth, which is not feasible under the current ownership. presented by Artificial Intelligence What Keeps Healthcare CIOs Up at Night: Balancing Technology Investments with Consumer Expectations When it comes to managing inbound phone calls, underperformance has devastating cost implications. By Stephanie Baum “We carefully explored the best owners for Mitsubishi Tanabe Pharma to achieve future growth, and we have reached a conclusion that promoting a growth strategy under Bain Capital, which has extensive investment experiences in healthcare, is the best option,” the conglomerate said. Boston-based Bain Capital outbid other investment firms for Tanabe Pharma, Bloomberg reported, citing unnamed sources familiar with the matter. While Bain has made healthcare investments throughout its history, the firm made life sciences an area of focus with 2016 formation of Bain Capital Life Sciences. Its investments include Aiolos Bio (acquired by GSK), Cardurion Pharmaceuticals, Cerevel Therapeutics (acquired by AbbVie), and Kailera Therapeutics. This past September, Bain Capital Life Sciences announced its fourth fund with $3 billion in total commitments. Tanabe Pharma currently focuses on immunology and inflammation; vaccines; central nervous system disorders; and diabetes and metabolic disease. The unit’s top-selling product is the amyotrophic lateral sclerosis drug Radicava, which accounted for 79.2 billion yen (about $523 million) in revenue for the fiscal year ended March 31, 2024. Its portfolio also includes the Eli Lilly diabetes drug Mounjaro, which it sells in Japan under an agreement with the U.S. pharma giant. Tanabe Pharma employs more than 5,000 people globally. Bain said the Japanese company will continue to develop innovative drugs internally while also seeking new opportunities for growth through business development, including licensing deals and strategic acquisitions. In Friday’s acquisition announcement, Ricky Sun, a partner at Bain Capital Life Sciences, said the investment firm believes there are promising signs for growth and untapped opportunities in Japan’s life sciences industry following government and regulatory initiatives to accelerate the development and approval of innovative medicines in the Japanese market. Exclusive Improving the Healthcare Financial Experience to Help Care Flow Zelis CEO Amanda Eisel shares her perspective on how the company is solving the problems of a fragmented health financial system to benefit all. By Stephanie Baum “This is an exciting opportunity to leverage our team’s clinical insights and company creation support to build out a scale platform focused on long-term fundamental drug development in areas of significant unmet need to ultimately bring transformative medicines to patients in Japan and globally,” Sun said. The acquisition, which still needs regulatory and shareholder approvals, is expected to close in the third quarter of this year. Image: istocksdaily, via Getty Images

SAN FRANCISCO--( BUSINESS WIRE )--Fathom, the leader in autonomous medical coding, today announced that it has earned HITRUST i1 Certification for its autonomous medical coding platform. This achievement validates the highest levels of information security and privacy for clients leveraging Fathom's industry-leading automation capabilities. HITRUST is one of the most comprehensive and widely-adopted cybersecurity frameworks, representing the "gold standard" for compliance in healthcare. This rigorous, independent certification process requires organizations to satisfy hundreds of security controls across 19 domains, ensuring the top data protection standards. "Security is in the DNA of Fathom. Our team knows the necessity of maintaining the highest standards – reflected in our security programs, compliance systems, and protocols – to protect our clients' data," said Andrew Lockhart, CEO of Fathom. "In today's heightened threat environment, our platform's HITRUST i1 Certification validates our sophisticated infrastructure that was built with our clients' security and privacy needs at the forefront." Fathom's autonomous coding platform empowers health systems and other provider organizations to overcome chronic workforce challenges and to strengthen both top and bottom lines. The technology delivers an average successful automation rate above 90% – nearly double that of any other technology in the market – across the broadest set of medical specialties, generating industry-leading ROI at enterprise-wide scale. With Fathom, providers benefit from lower costs, increased accuracy, reduced denials, improved revenue capture, and accelerated cash flow, backed by the industry's strongest SLAs. At a time when many technology vendors take shortcuts with fundamental security tenets, healthcare organizations are facing a barrage of malicious activity and threats. According to The HIPAA Journal , the frequency of healthcare data breaches of 500 or more records has nearly doubled from around 1 per day in 2018 to 1.99 per day in 2023, with an average of 364,571 healthcare records breached each day last year. Reflecting providers' experiences with these risks, the 2024 Healthcare IT Spending Report from Bain & Company and KLAS Research found that about 70% of surveyed organizations were impacted by cybersecurity attacks, such as the Change Healthcare incident in February, elevating data security to the top concern when considering software and digital technology investments. Moreover, at the recent HealthLeaders Revenue Cycle Technology Exchange in Nashville, Fathom led a workshop on contracting for autonomous coding with executives from several leading health systems, who emphasized strong cybersecurity as essential for vendor-provider partnerships. "HITRUST is continually innovating to find new and creative approaches to address information security challenges," said Jeremy Huval, Chief Innovation Officer at HITRUST. "Fathom's HITRUST i1 Certification is evidence that they are at the forefront of industry best practices for information risk management and cybersecurity." Fathom's comprehensive approach to security, privacy, and compliance extends beyond HITRUST i1 Certification. The company maintains SOC 2 Type 2 compliance and strict HIPAA compliance, forming a multi-layered approach to data protection that spans the entire company. Additionally, Fathom's closed-loop AI platform inherently reduces security risks relative to traditional outsourcing that involves many users with system access credentials. To learn more about Fathom's HITRUST i1-Certified autonomous medical coding platform and how it can enhance your revenue cycle while maintaining the utmost security standards, visit fathomhealth.com . About Fathom Fathom is the nation's leading medical coding automation platform, an AI solution that fuses the best of deep learning and natural language processing to automate medical coding with unprecedented accuracy and efficiency. Fathom provides the highest automation rates and the broadest specialty coverage to help clients increase speed and accuracy while reducing costs. Fathom is backed by world-class investors, including 8VC, Alkeon Capital, Cedars-Sinai, Founders Fund, GV, Lightspeed Venture Partners, and Tarsadia. For more information, visit fathomhealth.com and follow the company on LinkedIn .