The vertically integrated Life


The vertically integrated Life


Published Date: 2021-06-09 | Source: INCE|Community | Author: The Finance Ghost

The vertically integrated Life

The Food and Drug Administration (FDA) has given its first clearance to an Alzheimer's therapy since 2003, in massive news for sufferers of the disease. Nasdaq-listed Biogen ($BIIB) will sell the therapy under the brand name Aduhelm.

There's a link to the JSE as well here, as Life Healthcare's subsidiary Alliance Medical Group (AMG) is the parent company of Life Molecular Imaging (LMI). That business was formed in 2012 as part of an acquisition from the research and development portfolio of Bayer Pharma AG.

Over $400m has been invested in this business and it achieved EBITDA breakeven in 2020. The pharma industry is exceptionally capital-intensive in terms of research and development.

LMI produces NeuraCeq, which is used to diagnose Alzheimer's disease. This means that LMI is well-placed to be part of the diagnostic pathway prior to patients starting Biogen's new treatment.

There's a useful angle to AMG as well, which has a network of PET-CT scanners (part of the diagnostic process) and can offer MRI scanning as part of the monitoring of the treatment.

At this stage, even Life Healthcare cannot give an indication of the financial impact. However, the company has committed to keeping shareholders updated.


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