Biotechnology

Biotech feeds on itself with $7 bln Celgene deal

15 Jul 2015

The cancer drug giant is scooping up Receptos for 16 times its 2013 float price. The target has promise but no approved drug, yet Celgene’s market value rose by nearly $5.5 bln. With the bio bull market rewarding both seller and buyer, dealmaking is getting pumped up on steroids.

Latest pharma roll-up leaves lots of room to grow

7 Jul 2015

Horizon’s $1.75 bln unsolicited offer for U.S. rival Depomed continues the sector’s M&A rave fueled by tax savings and cost cuts. The Irish bidder is a recent entrant on the scene, so its low debt load and small size means it can easily expand. That portends more deals ahead.

Winners’ bets get bolder in the biotech casino

30 Jun 2015

Celgene is paying a 100 pct premium for a 10 pct slice of two-and-a-half year-old Juno Therapeutics. That sounds bonkers, even for a fast-moving technology like immune cell modification. The sector is on a streak, but the risk of crapping out in drug development remains high.

Anthem can afford to raise its premium for Cigna

22 Jun 2015

The $54 bln bid puts an extra $12 bln onto the value of its rival’s equity. Cigna is playing hard to get for good reason, though. The possibility of other suitors gives its defense validity. Cost savings and the implied return on investment also suggest Anthem has wiggle room.

Fat Americans inflate peculiar stock market bubble

17 Jun 2015

Restaurant IPOs are hot, with chicken-wing outlets soaring to dizzying valuations. So are attempts to deal with obesity. Fitbit’s launching a $3.7 bln float. A loss-making double-chin reduction specialist got a $2.1 bln bid. It all gives new meaning to “overweighting” stocks.

Biotech bonanza foils Big Pharma schmuck insurance

11 Jun 2015

Six months after GlaxoSmithKline sold a compound for $5 mln to a hedge fund manager, he has taken it public and landed a $3 bln valuation. It shouldn’t prevent unloved lab discoveries from being licensed. The Axovant IPO just suggests the deal structures could be smarter.

Teva lawyer conflict would make even bankers blush

10 Jun 2015

A judge urged that Kirkland & Ellis be barred from advising the drugmaker on its Mylan bid, citing an ethical breach. Goldman and others have been slapped for skewed loyalties but rarely with such force. It’s time attorneys stopped twisting formal rules to justify dodgy behavior.

Shire can justify $19 bln price tag for Actelion

8 Jun 2015

Dublin-based drugmaker Shire is pondering a $19 bln bid for Swiss peer Actelion, media reports say. The speculation pushed shares in the potential target up 9 pct. Possible cost synergies underpin the implied 21 pct premium, but a higher markup would quickly become a stretch. 

CVS-Omnicare portends lower doses of pharmacy M&A

21 May 2015

The drugstore giant’s $10 bln purchase of the pharma services firm gives it entrance to nursing homes and expands specialty medicine distribution. But the increasingly concentrated industry is already raising antitrust concerns. The era of frantic mergers may be nearing an end.

TPG’s $8 bln drug sale far from generic

18 May 2015

With the sale of Par Pharmaceutical, a maker of off-brand medicines, the buyout firm will generate an eight-fold return on its investment in three years. Though it’s a rare development, the eagerness of buyers like Endo International means more sellers are bound to benefit.

Danaher breakup eases sting of pricey Pall deal

13 May 2015

The $60 bln dentures-to-lasers concern is not cutting enough costs to justify its $13.8 bln pounce for the filter maker. But boss Tom Joyce’s surprise decision to voluntarily split Danaher in two dangles the prospect of better value for shareholders. The trick is to deliver.

Pure play gets new spin in filter maker M&A

12 May 2015

Suitors may be willing to splash out $13 bln for Pall, the largest publicly traded air and water purification company. That’s punchy and cost cuts might not cover the premium. But Pall’s scarcity value, profitability and burgeoning biotech customer base make it a tempting target.

Glaxo smartly bucks the breakup trend

6 May 2015

The British drugmaker scrapped a flotation of its HIV unit and slashed a planned cash return. That’s unfashionable in an era of spinoffs and shareholder payouts. GlaxoSmithKline, though, needs diversity and financial firepower while it tends to the core pharmaceutical business.

Alexion puts high stock to good use in biotech bid

6 May 2015

The drugmaker’s $8.4 bln offer for rival Synageva includes a whopping 136 pct premium. The stonking price is based on the rare disease specialist’s view that the market underestimates its target’s value. Exchanging a chunk of pricey paper for the assets may be a savvy move.

Mylan may have found cure for the common conflict

4 May 2015

The drugmaker sued its former lawyers at Kirkland & Ellis for advising Teva on its $40 bln hostile bid to buy the company. The attorneys say Mylan agreed, but a court may finally rule such waivers unethical. Even better would be if the case emboldens clients to stop signing them.

Pharma Arbageddon fears keep traders on sidelines

27 Apr 2015

Teva is after Mylan, which wants Perrigo. Such multibillion-dollar hostile deals are usually catnip for M&A punters. Recent failures have made them skittish, though. And these two battles come with cross-border complexity, antitrust and a poison pill. No wonder arbs are wary.

AstraZeneca’s reliance on one-offs is unsettling

24 Apr 2015

The pharma group managed to beat expectations in Q1 despite wrestling with patent expiries. One-off disposals of $309 million helped boost operating profit to $1.8 billion. Raising funds makes sense at a time when Astra is challenged, but investors shouldn’t rely on them.

Teva’s $40 bln hostile bid puts hope over reality

21 Apr 2015

The Israeli drugmaker needs a deal to shore up falling sales. Smaller rival Mylan offers that and oodles of synergies. A tie-up, though, would face antitrust concerns, require high leverage and have to get around a powerful poison pill. No wonder the market is skeptical.

Daiichi Sankyo scrubs out Indian M&A nightmare

21 Apr 2015

Last year the Japanese firm folded its stake in troubled Indian drugmaker Ranbaxy into local rival Sun Pharma for 40 pct less than it paid in 2008. A share rally means Daiichi has recovered its losses on the seven-year misadventure. It shows the power of appropriate ownership.

Actelion’s pay spat reflects tech myopia

17 Apr 2015

A Citigroup analyst has questioned Actelion’s exclusion of stock options from its chosen earnings measure. The Swiss biotech firm may be an outlier in Europe, but custom-made earnings are common in U.S. tech and biotech companies where valuation is more art than science.