Biotechnology

Obesity giants will begin $80 bln M&A face-off

17 Dec 2024

Eli Lilly and Novo Nordisk will need to invest the war chests they are amassing from sales of weight-loss drugs. They could snap up rivals like Zealand Pharma, or forge into new areas, say by buying autoimmune player Argenx. Pressure to do deals raises the risk of overpaying.

Mpox drugmaker’s shares may provide false comfort

16 Aug 2024

Bavarian Nordic, which makes a vaccine for the virus, gained $1 bln in value over the past week as the disease spread beyond Africa. The increase is equivalent to several million extra doses. That view, which implies a contained outbreak, may be too benign if mpox keeps mutating.

New Pharma will crowd out Big Pharma

11 Jun 2024

For decades the likes of Pfizer have ruled the industry, gobbling up tech-driven players. But former upstarts are no longer bite-sized, as Vertex Pharmaceuticals’ $125 bln market cap proves. Their new strength will create more M&A competition and undermine established leaders.

Blackstone cures two ailments in one Moderna shot

27 Mar 2024

Higher costs of capital are pressuring CEOs into tough spending decisions, while buyout shops flush with cash want to deploy it. This dynamic makes a $750 mln deal to fund a biotech project a crafty solution. The hard end of the bargain: ceding value from promising flu research.

AbbVie clinches the drug patent-cliff dismount

30 Nov 2023

A $10 bln purchase of ImmunoGen is the pharma giant’s latest bid to replace sales from maturing mega-drug Humira. While sometimes the fear of losing patent protection on a star product is justified, AbbVie shows it’s possible to go over the cliff and live to tell the tale.

Sanofi sickness calls for activist tonic

2 Nov 2023

The pharma group lost nearly $27 bln of market value as it announced more investment in drugs. To keep investors happy, CEO Paul Hudson can sell its consumer business, step up dealmaking and buy back shares. Its long-suffering shareholder L’Oréal has reason to back bold action.

Capital Calls: Pfizer pessimism

31 Oct 2023

Concise views on global finance: A glut of vaccines has gutted Pfizer’s valuation, leaving it lower than it was before the pandemic. That’s an over-reaction, even if its Covid-19 therapies prove worthless.

Capital Calls: Big Oil, Intel

27 Oct 2023

Concise views on global finance: Exxon returned $8 bln of cash to investors in the quarter, while Chevron returned some $6 bln. With investment rising and M&A on the table, investors are competing with new priorities; Intel shares jumped 10% after slowing declines in revenue.

Risky biotech M&A therapy will heal more fractures

19 Oct 2023

Bristol Myers is paying $5 bln upfront for Mirati, and will fork out another $1 bln if the target’s lung-cancer drug makes headway. Such contingent value rights often end up worthless, sowing discord. As valuation spats gum up deals, however, the sweeteners hold greater appeal.

Alphabet moonshots are ready for launch

29 Aug 2023

Google’s parent lost $6 bln last year on experimental ventures, such as health-data cruncher Verily and self-driving outfit Waymo. As CFO and former tech banker Ruth Porat takes charge of the unit, it’s probably a good time to consider carving out some and refocusing on others.

UK biotech sale offers cautionary spin on US pivot

29 Aug 2023

Abcam, a Cambridge-based maker of proteins for research, is selling to Danaher for $5.7 bln. Shifting listing venues from London to New York, as the seller did recently, is in vogue. But given its US buyer has got a good price, it’s a sign that doing so is far from a panacea.

Capital Calls: Illumina, Domino’s Uber delivery

12 Jul 2023

Concise views on global finance: The EU fines the $30 bln genetic test maker 432 mln euros for closing its 2021 Grail deal prematurely; the pizza chain known for its own delivery app is expanding its service with Uber Eats, a smart move to nab more orders from fickle customers.

Biogen conflicts cry out for boardroom therapy

15 Jun 2023

The departure of pushy investor Alex Denner as a director, with his romantic partner tipped to step in, adds to the $44 bln biotech’s struggles. Even in a cozy industry, such a brazen idea beckons another activist. It doesn’t help Denner’s case at Biogen-partner Alkermes either.

Icahn may fall short in quest of the holy Grail

21 Apr 2023

New rules in proxy contests haven’t helped activists in Disney or Salesforce. But with a concentrated shareholder base, they may embolden Carl Icahn as he agitates at Illumina, in the process of buying cancer detector Grail. The trouble is Icahn is pushing beyond the attainable.

CEO nostalgia won’t bring back the alpha

29 Mar 2023

Activist Carl Icahn wants Illumina’s Jay Flatley back at the helm of the US biotech firm. He’d be joining the zeitgeist: UBS and Disney have both reinstalled former CEOs too. Competence has value, but past performance doesn’t guarantee greatness. Long tenure brings its own risks.

Biogen’s $11 bln Alzheimer’s gain has cushion

28 Sep 2022

The U.S. biotech firm has developed a drug that may slow dementia, sending Biogen shares surging 40%. The assumptions it takes to validate the gain don’t seem crazy. Decades of failure to find a cure explain why investors are gun-shy. That may mean opportunity for the bold.

China biotech has bitter U.S. pill to swallow

14 Sep 2022

Top contract drugmaker, WuXi Biologics, lost $7 bln in market value after U.S. President Biden vowed to cut dependence on foreign manufacturers. Building up domestic capacity will take years, so the selloff looks premature. Still, some form of decoupling is underway.

Little pharma gets big boost from drug regulators

8 Sep 2022

A drug that treats a fast-killing neurological disease received a green light from an FDA panel instead of waiting for further trial results. That lifted shares of the maker, Amylyx, 60%. The unusual decision can be justified in this case. But such fast-tracking should be rare.

Belgian biotech is pricey cure for Big Pharma ills

28 Jul 2022

Rare-disease specialist Argenx reported surging sales of its main treatment. That increases its allure to drugmakers like Pfizer, whose revenue is threatened by expiring patents. But the $21 bln firm’s soaring shares since a recent U.S. drug approval make it anything but cheap.

Biotech’s EBITDARD hype risks impairing its growth

14 Apr 2022

Prenetics, supplier of Covid-19 tests to cruise lines, airports and England’s Premier League, has won U.S. approval to float by merging with a blank-cheque firm. But the fast-growing outfit excludes R&D costs from a key financial metric. That’s a warning sign for investors.