Biotechnology

Valeant’s platform trembles beneath Ackman’s feet

19 Oct 2015

The hedge fund manager bought a 5.5 pct stake because Valeant offered a cure for poor capital allocation by drugmakers. Now it’s scaling back on acquisitions, raising R&D and limiting price increases. The outsiders missed the political benefits to pharma’s spending.

Prognosis is bleak for Shire’s troubled Baxalta bid

9 Oct 2015

The rout in pharma stocks has made the Irish group’s all-share offer less attractive for its recently spun-off U.S. rival. Shire would have to add much more stock to offer Baxalta the $30 bln it initially touted. It should delay – even if it then misses its chance altogether.

Scorched U.S. tech and pharma feel the M&A chill

6 Oct 2015

Two of the hottest sectors for deals this year have extended their run. Apple chip supplier Skyworks agreed to buy PMC-Sierra for $2 bln and AmerisourceBergen is purchasing PharMEDium for $2.6 bln. Investors in both acquirers jeered, building on a worrisome trend for mergers.

Valeant’s back-foot problem flares up in Congress

28 Sep 2015

The pharmaceuticals company keeps fighting through chronic skepticism about its acquisitive ways and the related borrowing. Now, U.S. lawmakers’ questions about drug prices have cost Valeant $11 bln in market value. Always being on the defensive could eventually take its toll.

Breakdown: Rare drugs and their even rarer finance

22 Sep 2015

Shire’s $30 bln offer for Baxalta is the latest in a string of deals for firms targeting uncommon diseases. Therapies costing over $400,000 a patient and regulatory incentives encourage fast growth and acquisitions. Price pushback on parasite and TB drugs showcases one big risk.

Bayer $11 bln plastic IPO looks far from fantastic

21 Sep 2015

The German pharma giant is floating its Covestro division. The unit is cash-generative and well positioned for growth. But it is also a capital-hungry and cyclical business that has destroyed value for years. Bayer might need to be more flexible on the float price.  

Aussie vitamins get iron ore-style China boost

18 Sep 2015

A Guangzhou baby-formula firm is gobbling up Swisse, one of Australia’s biggest vitamin makers. The $1 bln deal caps a stunning run for clean-living specialists Down Under. As miners can attest, shifts in Chinese demand can transform an industry’s fortunes for better – or worse.

Perrigo boss’ dose of Mylan stock could be toxic

18 Sep 2015

CEO Joseph Papa owns over $200,000 worth of shares in his drug company’s hostile suitor. That’s at least hypocritical, given his claim that Mylan is a lousy investment. It’s also a prescription for conflicts. The right remedy is for executives to eschew any stake in rivals.

Mylan $28 bln offer not good enough for Perrigo

8 Sep 2015

The generic drugmaker’s hostile bid comes with a skimpy premium, and is mostly in its own paper. Perrigo investors shouldn’t want stock in a shareholder-unfriendly company with bad governance and financial risk. An auction could generate a better outcome than selling to Mylan.

Glaxo sale comes with cheeky earnings side effect

21 Aug 2015

UK pharmaceutical firm GlaxoSmithKline is selling a multiple sclerosis drug to Novartis for up to $1 bln. It’s a logical move and Glaxo gets a good price. The quirk: it will include proceeds from the one-off as part of underlying revenue. Pharma investors need to watch their core.

Valeant pops risky $1 bln libido pill

20 Aug 2015

The acquisitive drug firm is buying Sprout, the maker of just-approved “female Viagra.” Valeant will have gotten a bargain if it can crank out billions in annual sales. Snag is, the drug isn’t very effective, it has bad side effects, and regulatory restrictions may crimp sales.

"Female Viagra"-maker slips the FDA a roofie

19 Aug 2015

U.S. regulators approved the first pill for increasing sexual desire in women. The drug had been rejected twice because it’s barely effective and carries severe adverse effects. The lesson for pharma firms: a public relations campaign successfully changed a watchdog’s mind.  

Mylan flaunts masterful M&A jujitsu

14 Aug 2015

The drugmaker deftly blocked Teva’s $40 bln offer with a uniquely Dutch poison pill and a bold move to disqualify the suitor’s lawyers. Now it’s exploiting Ireland’s odd takeover rules to put Perrigo in a $34 bln chokehold. Clever defensive tactics will be needed to evade Mylan.

Shire can’t easily pay more for Baxalta

14 Aug 2015

The pharma group’s all-stock $75 bln merger approach has been rejected by its rival. Shire’s bid relies on aggressive claims to boost revenue, which Baxalta disputes. Breakingviews’ model shows Shire chief Flemming Ornskov can’t dig much deeper without bold assumptions.

Shire M&A machine stumbles on $30 bln Baxalta bid

4 Aug 2015

The onetime Irish target for AbbVie is planning a mega-deal of its own. Unlike the previous combination, Shire’s Baxalta purchase has industrial logic as well as tax benefits. Shareholders, though, might have preferred being bought out to assuming all the risks of a takeover. 

Novartis spinoff is neat cure for Big Pharma ills

29 Jul 2015

The $275 bln Swiss pharma group is injecting three drugs-in-development into a new entity backed by UK investors. Venture capital markets can be better at valuing and nurturing small drugs than Big Pharma shareholders. With biotech markets hot, there’s room for copycat deals.

Billionaire’s biotech IPO rides high on hope

28 Jul 2015

Patrick Soon-Shiong, whose NantKwest just fetched a $3.4 bln value, has made minority investors rich before but also treated them poorly. His new cancer treatment lacks supportive data for such a difficult task amid stiff competition. In this market, though, almost anything goes.

Allergan turns itself into M&A lab experiment

27 Jul 2015

The pharma giant has since 2012 racked up over $100 bln in deals and changed its name twice and its tax HQ once. Selling its once core business to Teva for $41 bln leaves Allergan free to pursue even bigger targets. But too much reliance on M&A could leave the Petri dish exposed.

Teva exits Mylan mess with $40.5 bln Allergan deal

27 Jul 2015

The Israeli pharma firm has been locked in a bitter battle to take over the Dutch drugmaker. Now it has agreed to buy the generic business from Allergan. The swap makes sense. Friendly is far easier than hostile, and the Allergan businesses are just as attractive as Mylan. 

Mylan is Stichting it to its shareholders

23 Jul 2015

The uniquely Dutch poison pill makes it likely that the drugmaker has seen off Teva’s $40 bln hostile bid. Mylan may now be able to seal a deal to buy smaller Perrigo. If not, Teva’s offer might re-emerge. Either way, though, investors have been deprived of a clear choice.