Rite Aid emerges from bankruptcy protection

BY Richard Summerfield

US pharmacy chain Rite Aid Corporation has emerged from Chapter 11 bankruptcy protection after successfully completing its restructuring process.

The company has eliminated $2bn in debt and said it has “received approximately $2.5 billion in exit financing to support the business going forward.”

Following its emergence from Chapter 11, Rite Aid will operate as a privately held company owned by creditors, operating “more than 1700 retail pharmacy locations across 16 states with a workforce of more than 45,000 strong”, according to the company’s website. Rite Aid closed more than 500 stores during the bankruptcy proceedings.

Separately, Rite Aid has announced that Matt Schroeder, who most recently served as chief financial officer, has been appointed its new chief executive. He succeeds Jeffrey S. Stein, who joined the company as chief executive and chief restructuring officer to lead the court-supervised Chapter 11 process.

“Emergence is a pivotal moment in Rite Aid’s history, enabling it to move forward as a significantly transformed, stronger and more efficient company,” said Mr Stein. “We are grateful for the ongoing support of our customers, associates and partners, and we look forward to continuing to provide leading pharmacy services designed to improve health and wellness outcomes across the communities we serve. I am excited about Rite Aid’s future as it continues to focus on executing its strategy and delivering for its customers and stakeholders.”

“I am honored to lead Rite Aid on its journey as we continue serving our customers and communities,” said Mr Schroeder. “Thanks to the dedication of the entire organization, we are beginning our next phase as a transformed company. I see Rite Aid’s remarkable potential, and I look forward to working with the team as we remain committed to our purpose of helping our customers achieve whole health for life.”

Rite Aid filed for Chapter 11 bankruptcy in October 2023, in light of significant financial challenges. The company recorded $750m in losses against $24bn in revenue for the prior fiscal year. As part of the restructuring, in addition to closing hundreds of locations, the company agreed to sell its pharmacy benefit unit Elixir, and settle with key creditors, including McKesson.

The plan also allocates $47.5m to junior creditors involved in opioid-related litigation, addressing claims from individuals and local governments. Prior to its Chapter 11 filing, Rite Aid faced 1600 opioid lawsuits, including one by the federal government alleging that the company ignored potential concerns when filling suspicious prescriptions for addictive opioid pain medication.

News: US pharmacy chain Rite Aid to operate as a private company as it emerges from bankruptcy

Scandinavian airline SAS emerges from Chapter 11

BY Fraser Tennant

In what it hails as a new era for the company, Scandinavian airline SAS has successfully completed its restructuring proceedings and emerged from Chapter 11 bankruptcy in the US, in addition to a similar simultaneous reorganisation process in Sweden.  

The airline emerges from Chapter 11 as a financially robust company with a strengthened capital structure and substantial liquidity, having made significant progress with operational improvements and in building a competitive business.

Over the course of the restructuring proceedings – which were supported by nearly all creditors voting in the respective restructuring proceedings in the US and Sweden – SAS has successfully restructured more than $2bn of debt, adjusted its aircraft fleet and related costs and reached agreements with key stakeholders, creditors and vendors.

“We have successfully completed our restructuring proceedings and we are now entering a new era,” said Anko van der Werff, president and chief executive of SAS. “It has been a complex process and I am thankful for the constructive collaboration with creditors and partners, for the valuable support from the board, as well as impressive efforts, energy and enthusiasm throughout our organisation.”

The new principal owners of the reorganised company – Castlelake, Air France-KLM, Lind Invest and the Danish state – have agreed to appoint a new board of directors for SAS, which will be led by Kåre Schultz, as chairman of the board, replacing resigning chairman Carsten Dilling.

“I am honoured to be appointed as new chairman of SAS, and I look forward to leading the board’s work as SAS continues its proud legacy as Scandinavia’s leading airline,” said Mr Schultz. “SAS has done a truly impressive job in navigating through the restructuring proceedings, and in building a competitive business positioned for growth.”

This business includes a continued positive development for passenger demand with 18 million passengers traveling with SAS so far in 2024 – a 6.5 percent increase from the same period in 2023.

Mr Schultz concluded: “Together with SAS’ new investors, board and management, we will continue to collaborate with partners and customers to drive transformative changes in aviation.”

News: Scandinavian airline SAS hails 'new era' as it exits US bankruptcy process

McKesson acquires FCS unit in $2.49bn deal

BY Fraser Tennant

In a transaction that enhances its integrated oncology platform, healthcare company McKesson is to acquire a controlling stake in community cancer centre Florida Cancer Specialists & Research Institute’s (FCS) business and administrative services unit for $2.49bn in cash.

Under the terms of the definitive agreement, McKesson will own an approximate 70 percent stake in the unit, Core Ventures, which manages non-clinical administrative functions such as providing operational and advisory support services to FCS clinics. FCS physicians will continue to retain a minority interest in Core Ventures.

Dedicated to advancing health outcomes for patients everywhere, McKesson’s teams partner with biopharma companies, care providers, pharmacies, manufacturers, governments and others to deliver insights, products and services to help make quality care more accessible and affordable. 

Following the close of the transaction, FCS, a practice with more than 250 physicians and 280 advanced practice providers, across nearly 100 locations in Florida, will remain independently owned and FCS will join McKesson’s The US Oncology Network, a leading oncology organisation, dedicated to advancing local and affordable cancer care and better patient outcomes.

“This acquisition marks an important step forward in our efforts to advance community-based oncology care,” said Brian Tyler, chief executive of McKesson. “By growing our oncology platform, we will bring advanced treatments and improved care experiences to patients, while also reducing the overall cost of care.

“FCS and Core Ventures’ expertise and patient-first approach align with our commitment to accelerating clinical development, improving patient outcomes and expanding access to quality cancer care in the community,” he continued. We are also pleased to welcome FCS to The US Oncology Network, reinforcing our dedication to empowering community-based providers to independently thrive in today’s rapidly evolving healthcare landscape.”

The transaction is subject to customary closing conditions, including necessary regulatory clearances.

Lucio N. Gordan, president and managing physician at FCS, concluded: “Our patients are the true beneficiaries of this transaction as we seek to drive meaningful outcomes and deliver sustained value with every interaction. Through the power of our combined operational expertise, we can bolster community oncology's role in increasing access to high-quality, affordable care.”

News: McKesson to buy controlling stake in Florida Cancer Specialists' unit for about $2.5 billion

Cyber insurance is key to a proactive cyber security strategy

BY Richard Summerfield

Cyber insurance should form the backbone of a cyber security strategy, according to a new report from At-Bay.

According to the report, which surveyed security decision makers in the US, Canada and Europe, Middle East, and Africa (EMEA), cyber insurance is now seen as a best practice by many businesses, with 72 percent of respondents considering it ‘critical’ or ‘important’ to their organisation.

Furthermore, 43 percent of respondents noted that cyber insurance requirements are a significant driver of their cyber security spending. This figure rises to 52 percent among the largest organisations.

“We believe an important finding from this report is that there’s a large number of organizations that should consider partnering with a cyber insurance provider to help drive cybersecurity maturity,” said Andrew Braunber, an analyst at Omdia. “There can be upside for enterprises in aligning proactive cybersecurity spending with cyber insurance requirements, with an even more powerful emerging option to partner with an InsurSec provider to optimize risk reduction and technology performance. These relatively new entities combine cybersecurity products and services with insurance offerings to offer a wider scope of prevention and protection.”

There has been significant growth in the number of businesses of all sizes when it comes to prioritising proactive security solutions that help identify and mitigate potential threats. Over the last 12 months, more than 70 percent of respondents increased their spending on proactive security solutions.

Yet, despite the increase in the use of cyber insurance and its burgeoning impact on security decisions, only 13 percent of respondents said they were working ‘proactively’ with their cyber insurance provider to reduce cyber risk. By contrast, 33 percent of respondents said they were taking preventive measures with support from their cyber insurer.

Worryingly, proactive collaboration is even lower in critical infrastructure sectors, where cyber risks could have broader societal impacts. For example, only 4 percent of manufacturing companies, 7 percent of energy, utility and transportation companies, and 8 percent of healthcare companies reported proactive engagement with their cyber insurance providers.

“Cyber insurance has emerged as a critical pillar to building a proactive cybersecurity strategy as it enables companies to complete their risk mitigation,” said Thom Dekens, chief business officer at At-Bay and general manager of At-Bay Security. “Additionally, insurance providers with significant in-house cybersecurity expertise can provide huge business value to their customers, closely partnering with them to make informed decisions about their technology strategies and also improve their risk outcomes throughout the policy year.”

Report: InsurSec Can Drive An Effective Proactive Security Strategy

J&J to acquire V-Wave

BY Richard Summerfield

Johnson and Johnson (J&J) has agreed to buy heart failure implant company V-Wave in a deal worth a potential $1.7bn.

According to J&J, the acquisition will extend its position as a leader in addressing cardiovascular disease. V-Wave develops cardiovascular implant technology that specifically targets heart failure with reduced ejection fraction.

Under the terms of the deal, J&J will acquire V-Wave for $600m upfront, with potential payments of up to $1.1bn contingent on regulatory and commercial milestones. V-Wave will join J&J as part of its MedTech division, the company said, with financials reported as part of its cardiovascular portfolio. Michael Bodner, group president, heart recovery & intravascular lithotripsy, will assume responsibility for the V-Wave team upon close. J&J initially invested in V-Wave in 2016.

The deal, which is expected to close before the end of 2024, subject to necessary approvals and other closing conditions, is the latest in a succession of acquisitions agreed by J&J as it attempts to drive growth beyond 2025. In April, the company agreed a $13.1bn deal to acquire Shockwave Medical. In 2023, J&J acquired miniature heart pump maker Abiomed, for $16.6bn, and paid $400m for cardiac implant developer Laminar.

J&J expects the acquisiton of V-Wave to dilute adjusted earnings per share by approximately $0.24 in 2024 and approximately $0.06 in 2025.

“We are excited to welcome V-Wave to Johnson & Johnson MedTech and to take another meaningful step toward transforming the standard of care for cardiovascular disease,” said Tim Schmid, executive vice president and worldwide chairman of Johnson & Johnson MedTech. “We recognize the importance of identifying more diverse and effective treatments for heart failure, and our recent track record demonstrates our focus on accelerating our impact on the most urgent and pressing unmet needs. We know V-Wave well, with our relationship dating back to our original investment in the company in 2016, and we have a deep understanding of the technology and science, as well as the company’s commitment to patients.”

“At V-Wave, we are dedicated to achieving our vision to help patients around the world – and we know Johnson & Johnson MedTech shares this mission,” said Neal Eigler, chief executive of V-Wave. “We are confident that Johnson & Johnson MedTech is well-positioned to ensure V-Wave’s breakthrough ideas and technology reach patients in need as quickly and effectively as possible.

“We look forward to continuing to build a world where cardiovascular disease is prevented, treated, and cured,” he added.

News: J&J to buy medical device maker V-Wave for up to $1.7 bln