Bain scores over tenfold return with $8.7 billion Cerevel sale

Cerevel Therapeutics Holdings

07/12/2023 17:35

By Greg Roumeliotis
       Dec 7 (Reuters) - Private equity firm Bain Capital
stands to make more than 10 times the $250 million it invested
in Cerevel Therapeutics Holdings Inc  CERE.O  following the
neurology-focused drug developer's $8.7 billion sale to AbbVie
Inc  ABBV.N , according to regulatory filings.
    Boston-based Bain committed $350 million in 2018 to carve
Cambridge, Massachusetts-based Cerevel out of Pfizer Inc
 PFE.N , but only $250 million of that was drawn, the filings
show. The deal with AbbVie, announced on Tuesday, now values
Bain's 36.5% stake in Cerevel at about $2.7 billion. 
    This more than tenfold return is significantly higher than
the private equity industry's average return on invested capital
in the healthcare sector of 2.9 times, according to investment
advisor Cambridge Associates. 
    A Bain spokesperson declined to comment.
    Bain's success reflects the high stakes of its bet on
Cerevel's drug portfolio. It is developing medicines for
Alzheimer's, Parkinson's, psychosis, epilepsy and panic
disorder. Its experimental drug emraclidine is in mid-stage
trials as a treatment for schizophrenia that will yield data the
company hopes can be used to seek regulatory approval.
    Bain and Pfizer, which retained a 15% stake in Cerevel, took
the company public in 2020 through the merger with a special
purpose acquisition vehicle. It was one of the few such deals to
have proved successful, as most companies that went public
through that route in the past three years now trade at a
fraction of their deal value. 
    Bain, which has about $180 billion in assets under
management, is one of the private equity industry's most
prolific investors in the healthcare sector, completing more
than 940 deals in the space since 1984. 

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EXCLUSIVE-AbbVie nears roughly $8 billion deal for drug
developer Cerevel-sources     urn:newsml:reuters.com:*:nL1N3D13B8
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 (Reporting by Greg Roumeliotis in New York; Editing by Will
Dunham)
 ((Greg.Roumeliotis@thomsonreuters.com; +1 646 223 6022))