Biotechnology

Mylan’s $29 bln Perrigo play may keep suitor away

8 Apr 2015

The specialty drugmaker joined pharma’s deal frenzy with an unsolicited bid for its Irish-based rival. An over $3 bln rise in Mylan’s share price reflects more than possibly juicy synergies, though. It suggests the firm’s a target – and eager for a dose of takeover prevention.

$12.8 bln prescription may clear up pharmacy M&A

30 Mar 2015

UnitedHealth should generate savings worth more than the 27 pct premium it’s paying for drug middleman Catamaran. But United is playing catch-up. And its target is usually a buyer. Catamaran’s capitulation indicates benefits managers no longer need a dose of dealmaking.

Novo Nordisk can stay on Glaxo’s level

27 Mar 2015

The Danish drugmaker’s shares jumped 10 pct on hopes of drug approval. That puts its market cap above $140 bln: firmly in pharma’s big league and now well above GlaxoSmithKline. Novo’s much higher earnings multiple is deserved, given its inventiveness and focus on diabetes.

Biotech-insurer connection looks wildly premature

23 Mar 2015

Early results for Biogen’s Alzheimer’s drug added $10 bln to its value on Friday. Now an analyst comment that it might cut long-term care payouts for Genworth has sent the insurer’s stock up 5 pct. Past failed treatments make that a step too far – and even a sign of a bubble.

Drugmaker IPO should ease any TPG anxiety

19 Mar 2015

The buyout firm may quadruple its investment – at least on paper – in Par Pharmaceutical, a generics maker it bought for $1.9 bln less than three years ago. The return delivers a useful lift as TPG raises a new $10 bln fund. It’s also good therapy for a dispiriting lawsuit.

Valeant’s $11 bln bid may have scored two knockouts

16 Mar 2015

By sweetening its offer for Salix, the acquisitive drugmaker now backed by hedgie Bill Ackman put rival suitor Endo on the mat. The extra cash and a balance sheet reeling from the Allergan deal leave the business model looking wobbly. Valeant may have just rung its own bell too.

Skadden’s double dose of pharma M&A may be toxic

13 Mar 2015

The law firm is advising both Endo and Valeant on varying aspects of their competing bids for Salix. Working two sides of a deal might pass ethical muster if clients consent. As Goldman and other banks have learned, though, shareholders – and judges – can be far less forgiving.

Valeant’s mini-me turns into a hostile M&A rival

11 Mar 2015

The drugmaker’s stock has rocketed up as it has rolled over competitors, cut costs and preserved profit with a low offshore tax rate. Endo International, now led by Valeant’s ex-president, has copied the model in spades, trumping its rival’s offer for Salix with an $11 bln bid.

AbbVie CEO may have overpaid again in $21 bln deal

5 Mar 2015

Richard Gonzalez, the pharma firm’s boss, shelled out $1.6 bln last year to get out of a hard-won bid for Shire. Now he has come out on top in an intensely competitive biotech auction. AbbVie may get a blockbuster drug, but at a high cost: It must share profits with rival J&J.

Actavis sale dresses up barely investment grade

3 Mar 2015

The acquisitive drugmaker attracted huge demand for $21 bln of bonds one notch above junk. They yield 1.75 percentage points over U.S. Treasuries, less than Verizon’s bigger, better-rated issue did in 2013. Buyers of top-tier debt can’t help but keep looking further downward.

M&A optimism over Merck KGaA is about to be tested

3 Mar 2015

The chemical and drugmaker has become one of Germany’s hottest stocks, gaining 55 pct in a year. Solid revenue growth and a dividend hike for 2014 underscore the renewal. To keep investors onside, Merck must now smoothly integrate a $17 bln takeover, the biggest in its history.

Deal junkie Valeant shoots up on $10 bln fix

23 Feb 2015

The drugmaker’s pledge last year to focus on organic growth and debt reduction didn’t last long. Cost cuts and tax savings from buying Salix proved irresistible. What Valeant’s injecting isn’t clear. Salix’s numbers are fuzzy after it admitted pumping clients full of inventory.

Drugmakers unlikely candidates for next big short

11 Feb 2015

Kyle Bass, a hedge fund manager who bet successfully on a U.S. housing crash, is targeting pharma companies worth $450 bln. A new method of challenging patents gives him a tool. But it’s not clear how his firm, Hayman Capital, has a leg up on existing, aggressive generic firms.

Pfizer’s generics injection lifts mood for breakup

5 Feb 2015

The pharmaceutical giant’s $15 billion purchase of Hospira gives it a shot at reversing a history of value-destroying acquisitions. The injectable drug maker’s strength in non-branded medications should fortify Pfizer’s generics unit – and clear the way for spinning it off.

AstraZeneca becomes more reliant on investor trust

5 Feb 2015

The UK pharma group’s 2014 results disappointed. That shows the challenge CEO Pascal Soriot faces reaching the double-digit growth he promised when seeing off Pfizer’s $118 bln bid. AZ’s full valuation, and maybe its independence, are vulnerable if there are more slips.

Prisoner’s dilemma costs Gilead investors $15 bln

4 Feb 2015

Its hep C drug helped the $145 bln biotech quadruple fourth-quarter earnings and plan for a big buyback. Gilead’s stock sank 10 pct, though, because it’s going to discount the treatment sharply this year. Cures fuel price wars because there’s no repeat business to worry about.

Modicare may add to big pharma’s Indian gripes

22 Jan 2015

The Indian prime minister plans to launch a universal healthcare scheme on a tight budget. That bodes ill for efforts to improve patent protection. Despite pressure from Barack Obama and big drugmakers, it will be tough to shake India’s addiction to cheap generic pharmaceuticals.

Jack Ma factor makes investors starry-eyed

14 Jan 2015

The involvement of China’s richest man in a drugmaker’s share placement has sent the company’s market value up by over $1 bln. There may be synergies between e-commerce and pharmaceuticals, but details are lacking. Investors are too eager for the Jack Ma endorsement. 

Thiel bets regulators just blowing smoke on weed

12 Jan 2015

The PayPal founder’s investment in a marijuana business could run up against U.S. anti-drug laws. Like sharing-economy upstarts Airbnb and Uber, though, the billionaire wagers the legal haze will clear. With banks unable to take that risk, the reward could be sky-high returns.

Roche tries to recapture the Genentech magic

12 Jan 2015

The Swiss drugs giant is paying about $1 bln for up to 56 pct of cancer testing firm Foundation Medicine. The structure echoes its success taking control of Genentech in 1990 and leaving it independent. A whopping 109 pct premium reflects Roche’s mistake of low-balling Illumina.