Biotechnology

Shire gambles AbbVie break fee on risky $5 bln deal

12 Jan 2015

The Dublin-based drugmaker is buying NPS to expand in lucrative rare drugs. The 51 pct premium is covered almost entirely by compensation from the collapse of Shire’s sale to U.S. peer AbbVie. That doesn’t much mitigate the risk of doing a deal ahead of a key regulatory ruling.

Biotech unicorn startups thrive in darkness

8 Jan 2015

Moderna’s the latest to be worth at least the $1 bln that earns the moniker of the mythical beast. It aims to develop 100 drugs in 10 years. That’s laudable, but the technology may not work in humans. Moderna’s valuation is another sign the biotech boom’s flirting with fantasy.

Uncle Sam stoked to hash out marijuana in 2015

24 Dec 2014

Now that four U.S. states and D.C. have legalized recreational cannabis, commerce and safety warrant better regulation. But federal rules prohibiting the drug create obstacles. For the fledgling industry to mellow, Washington needs to tweak laws to consent to states’ will.

Pharma toys with mutually assured destruction

22 Dec 2014

Gilead lost $20 bln in value after Express Scripts ditched its hepatitis C treatment for AbbVie’s discounted drug. It may kick off widespread price wars throughout the sector. Such tactics, though, could be a strategic disaster for all concerned.

Roche double blow increases dealmaking pressure

19 Dec 2014

The pharma group has suffered two big drug failures. The setback over Alzheimer’s is no shock—the disease has been a money loser for big pharma. A second knock in Roche’s core cancer franchise hurts more. The failures will increase pressure on Roche to deploy excess cash.

Rampaging animal spirits birth biotech unicorn

18 Dec 2014

The public offering of Juno Therapeutics presents an apt finale to the best year for biotech IPOs. It’s only a year old and revenue free, but its cancer fighting technology is hot. Juno’s $2 bln valuation shows capitalism’s ability to catalyze investors’ hopes and resources.

Merck gives in to M&A frenzy risk assessment

9 Dec 2014

Just hours after unveiling its $8.4 bln acquisition of Cubist, a judge invalidated patents owned by the antibiotics maker. Potential lost sales are reflected in the billions erased from Merck’s market value. The known liability was appraised through a rose-colored merger prism.

Merck bets $8.4 bln on more profitable antibiotics

8 Dec 2014

For years, big pharma has left new work on bug control to small biotechs. But the mood is changing. Rising – and alarming – resistance to existing drugs and government incentives to develop new ones are injecting allure into companies like Cubist, Merck’s target.

Pharma’s dying assets lack M&A remedy

5 Dec 2014

Both GlaxoSmithKline and Sanofi have scrapped sales of mature drugs. The motives differ, but both flops highlight the challenge of finding suitable owners for such assets. Other industries would spawn rollup vehicles. Here, buyers lack expertise, and sellers aren’t desperate yet.

Walgreen-Boots deal sturdy enough to foil critics

4 Dec 2014

A pension fund adviser says the U.S. pharmacy chain is overpaying for the rest of its Swiss-based peer. The complaint is a little confusing, though concerns about risk seem valid. With a big shareholder and activist Jana already on board, the transaction will be tough to derail.

Japanese drugmaker strikes yet another costly deal

2 Dec 2014

Otsuka’s $3.5 bln purchase of Avanir prolongs a track record of overpriced M&A for Japan’s pharmaceutical firms. Granted, the company needs new offerings before the patent expires next year on its blockbuster schizophrenia drug. But this transaction smacks of desperation.

Pharma market failure gets a charitable cure

19 Nov 2014

The Cystic Fibrosis Foundation helped fund a successful treatment for the deadly lung disease, stepping up when private investors wouldn’t. Its reward: $3.3 bln for rights to the new medication. So-called venture philanthropy could be the model for kick-starting drug development.

AstraZeneca struggles to advance value defence

18 Nov 2014

The UK pharma group fought Pfizer’s $120 bln bid in May by promising growth. It’s now reiterating punchy sales targets and casting oncology as a new growth driver. In fact, the Astra story has only inched forward. Its defence has been aided most by U.S. curbs on tax-driven M&A.

Valeant’s activist deal too clever by half

17 Nov 2014

The $45 bln drug company’s tilt at Allergan alongside Bill Ackman’s Pershing Square leaves it with just a modest windfall to show for a seven-month campaign that risked legally questionable tactics. Valeant boss Michael Pearson’s M&A experiment is not one to repeat.

Bill Ackman comes out top in $66 bln pharma deal

17 Nov 2014

The activist will reap more than $2 bln from Actavis buying Allergan. It’s a steep price - cost cuts alone cannot justify the premium paid. And losing bidder Valeant has been hauled over the coals. It will, at least, get a $400 mln consolation prize from former ally Ackman.

Ackman pet-health move is Brooklyn Bridge activism

12 Nov 2014

The hedgie will do well from kicking off a sale of Allergan. But doing the same for Zoetis will be harder. Pfizer found no takers before it spun off the unit in 2013. It’s not clear why potential buyers – even Valeant, Ackman’s Allergan partner – would now pay twice as much.

Diabetes wars a taste of things to come for pharma

10 Nov 2014

Obamacare and healthy competition are to blame for Sanofi’s problems in the insulin market. But copycat “biosimilar” drugs will disrupt other pharmaceutical markets. These new-style generics could create big problems for some substantial firms, including Amgen and AbbVie.

Broken drug M&A chain leaves Valeant as weak link

7 Nov 2014

Earlier this year, the pharma company was pursuing Allergan, which was chasing Salix, which had agreed to buy Cosmo. Such frenzied deal-making encourages puffery. Allergan avoided falling for Salix, which just admitted channel-stuffing, but is still vulnerable to dubious Valeant.

LabCorp deal tests positive for value destruction

3 Nov 2014

The firm that checks patients’ blood is paying $6.1 bln for clinical trial outsourcer Covance. The strategic logic is hazy. Shareholders’ financial diagnosis is damning, too. They swabbed some $700 mln off LabCorp as cost cuts fell far short of the 32 pct premium paid.

Sanofi board chaos risks derailing recovery

29 Oct 2014

The French pharma group has dumped its chief executive. Chris Viehbacher’s position may have been untenable but his exit hurts Sanofi at a fragile time. Chairman Serge Weinberg will temporarily take the CEO mantle. He needs to act fast to stabilise the governance.