Pharmaceutical and medical products supplier Cardinal Health Inc. (NYSE: CAH) has sold the remaining stake in its spinoff medical technology company for $706 million.
Cardinal sold 30.5 million shares, which represents about 14 percent of CareFusion Corp.’s (NYSE: CFN) outstanding shares, in a block trade to Morgan Stanley.
Based on the numbers in Cardinal’s regulatory filing that announced the sale, the Dublin, Ohio, company gave Morgan Stanley a discount for taking the shares off its hands. The sale price comes out to about $23.14 a share. But CareFusion closed at $24 the day prior to the Sept. 15 sale.
“It’s not uncommon to see a discount on a large block trade like this,” Troy Kilpatrick, a Cardinal spokesman, said.
Cardinal spun off San Diego-based CareFusion about a year ago to focus more intensely on its supply chain business. At the time, Cardinal retained about 19 percent of CareFusion’s shares, selling 10.9 million shares for $270 million in the fiscal year ended June 30.
Kilpatrick said the spinoff deal with CareFusion required Cardinal to unload all of its shares in the San Diego company within 5 years. Cardinal sold the shares because market conditions were right for it to find a buyer, he said.
CareFusion makes drug-delivery systems and infection-prevention tools. Last month, the San Diego spinoff said it would lay off about 5 percent of its workforce — 700 employees — due to declining profits.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
