7:35 AM
Mar 08, 2018
 |  BC Extra  |  Company News

Cigna to acquire Express Scripts

Cigna Inc. (NYSE:CI) has proposed to acquire Express Scripts Holding Co. (NASDAQ:ESRX) in a cash and stock deal valued at $67 billion, combining two of the leaders in value-based reimbursement for pharmaceuticals.

Express Scripts shareholders will receive $48.75 per share in cash and 0.2434 shares in the combined company, which will be named Cigna. The price is a 31% premium to Express Scripts’ close of $73.42 on March 7, before the deal was announced.

Express Scripts shareholders will own 36% of the combined company, with Cigna shareholders owning the remaining 64%. The $67 billion includes Cigna’s assumption of about $15 billion in Express Scripts debt.

Cigna was one of the first payers to enter into an outcomes-based reimbursement arrangement for a pharmaceutical with the 2009 arrangement for Januvia sitagliptin from Merck & Co. Inc. (NYSE:MRK) (see BioCentury, May 14, 2012).

The company has since entered into similar arrangements, including deals for therapies to treat hypercholesterolemia and heart failure (see BioCentury Extra, May 11, 2016).

Express Scripts has been a pioneer in novel payment arrangements such as indication-based pricing for cancer and inflammatory/autoimmune indications. This year the PBM also said that it plans to launch a payment over time model for potentially curative one-time treatments such as cell and gene therapies (see BioCentury, Jan. 19).

On a call to discuss the transaction, Express Scripts President and CEO Tim Wentworth said the transaction would allow the combined company to offer these types of value-based arrangements to a larger group of health plans and patients.

"We have been driving value-based contracting across the supply chain. It's what we do," Wentworth said of Express Scripts. "That only gets better when we put these two companies together to define new value-based opportunities," he added.

The combined company will be led by Cigna President and CEO David Cordani, and Wentworth will serve as president of Express Scripts. The deal is expected to close by Dec. 31. Both companies’ boards have approved the deal.

User Sign in

Trial Subscription

Get a 4-week free trial subscription to BioCentury Extra

Article Purchase

Purchase this article for limited one-time distribution and website posting

$750 USD