Health Care Checkup: Sigma-Aldrich sells, Cerner buys, startups compete

The Health Care Checkup, a weekly rundown of the state’s top health care headlines, is sponsored by Heyen Wellness Therapies.


Sigma-Aldrich makes its headquarters in St. Louis and was acquired for $17 by German pharmaceutical company Merck KGaA in September 2014. | Courtesy of Sigma-Aldrich
Sigma-Aldrich, which makes its headquarters in St. Louis, was acquired for $17 by German company Merck KGaA. | Courtesy of Sigma-Aldrich

Taking the Pulse

Merck buying Sigma-Aldrich for $17 billion

St. Louis-based chemical supplier Sigma-Aldrich will be acquired by German pharmaceutical company Merck KGaA in a stock purchase of $140 per share. In all, the transaction is expected to cost $17 billion and be completed in the middle of next year. Merck benefits in two distinct ways from the purchase. First, adding Sigma-Aldrich allows Merck to increase its revenue from supplying chemicals to pharmaceutical companies — Sigma counts Pfizer Inc. and Novartis among its clients — while allowing the German company to move away from drug development. Merck hasn’t had a new drug approved for market since 2003. Second, Sigma-Aldrich brings Merck significant market gains in North America and, notably, Asia, where Sigma has seen rapid growth and just reported a strong second quarter overall.

Lingering questions remain, however, such as whether Merck will retain the 1,800 employees Sigma-Aldrich has in St. Louis. The German company promised a “significant presence” in the city, but concerns persist that the city could get lost in the corporate shuffle.

Cerner partners with Apple and gets Siemens Health purchase approval

North Kansas City-based health IT company Cerner added a partner as well as a purchase in recent days. The Federal Trade Commission approved the acquisition of Siemens Health Services, giving the go-ahead for the $1.3 billion deal to close in early 2015. The deal boosts Cerner’s position as one of the biggest players in its field, with expected annual revenue totaling $4.5 billion; more than 20,000 employees in 40 countries; and a research and development budget exceeding $650 million.

Cerner is also one of two companies partnering with Apple Inc. to develop applications using HealthKit, Apple’s mobile health platform; the other is Athenahealth. The goal is to help patients monitor chronic conditions such as diabetes from home while collecting data for doctors to easily access. The first applications for HealthKit are expected to appear as soon as Apple works the platform’s bugs out.

Five health care companies among Startup Challenge finalists

The St. Louis Economic Development Partnership announced its finalists for this year’s Startup Challenge, and five health care-related companies are among the 19 companies vying for a slice of the $120,000 in prizes. St. Louis’s HIPAAtrek serves as a guide for HIPAA compliance; Columbia-based Immunophotonics is working on the cancer vaccine inCVAX; another St. Louis company, MagBiosense, is developing a device to bring heart attack diagnosis to patients before they reach the hospital; Nanopore Diagnostics would allow doctors to identify pathogens in 15 minutes so antibiotic decisions can be made the same day; and PIXI Medical will help manage track the use of prescription drugs. Startup Challenge prize winners will be announced at the Startup Connection event at Saint Louis University’s Busch Student Center on Nov. 19.

Shots in the Arm

Stock offerings are a common theme among recent health care funding news. Kansas City-area animal health company Aratana Therapeutics sought its third public stock offering, this one valued at $40 million, to help improve its infrastructure for launching new products.

Meanwhile, another Kansas City company, Proteon Therapeutics, filed an initial public offering with the Securities and Exchange Commission. Details regarding the number and price of shares being offered were not disclosed. A deal for Swiss pharmaceutical company Novartis to buy Proteon collapsed earlier this year.

Number of the Week: 21

The number of senior living facilities opened in Missouri in the last year. In all, the state now counts 1,148 long-term care locations across the state — a number likely to increase given Missouri’s above-average percentage of residents 65 and older and its increasing life expectancy.

Quote of the Week

“Hospitals are really struggling with prioritizing who should get financial aid and what it should be. How do they help the people who need help the most without discouraging people from getting insurance?”

Melinda Hatton, general counsel of the American Hospital Association. Under the Affordable Care Act, hospitals across the country such as Truman Medical Center in Kansas City raised the income threshold from 400 percent of poverty level to 200 percent for giving free or discounted care to uninsured patients. The change was intended to spur patients to get insurance, but instead it caught many people unprepared and priced out of free care as well as past the insurance signup deadline. 

Tweet of the Week

No wonder the company is diving into HealthKit app development despite the shaky rollout. How long before others follow?


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