Biotechnology

U.S. biotech IPO bubble pulls in overseas firms

12 Nov 2013

It’s been one of the best years ever for the sector. Speculative companies are raising cash with ease as investors chase high growth. Now foreign firms, spurred by the success of a company making a marijuana derivative, are rushing to join the party before last call rings.

Shire adds to premium valuation with toppy deal

11 Nov 2013

The pharma company’s shares jumped 3 pct after it agreed to buy biotech group ViroPharma at an aggressive nine times revenue. The deal brings hefty synergies, a tax kicker and boosts Shire’s place in profitable rare diseases. Markets are keen to reward growth over breadth.

Have M&A bankers lost their mojo?

8 Nov 2013

Salix is the latest buyer to create immediate extra market value from an acquisition. It’s a wonder silver-tongued advisers, who used to successfully pitch even the silliest of transactions, aren’t capitalizing on the trend more often. It should be getting easier to close a deal.

Investors remain too sweet on Novo Nordisk

31 Oct 2013

Danish diabetes-treatment giant Novo Nordisk suffered a rare earnings miss, and dropped its double-digit growth target. Generic competition and a cancer scare both hurt. Investors promptly erased 6 percent of Novo’s value. But they are still being generous.

Teva CEO’s sudden exit prompts rocky prognosis

30 Oct 2013

The world’s largest generic drugmaker has lost boss Jeremy Levin. That raises governance concerns and casts doubt on the firm’s ability to weather the expiration of patents on its biggest seller. A takeover could be in the offing, but shareholders probably won’t be so lucky.

Pfizer on right path for others to follow

29 Oct 2013

A two-year diet has done more for investors than a decade of acquisitions. The drug giant still trades at a 10 pct discount to rivals - fodder for CEO Ian Read to push for a breakup. And Pfizer’s recovery should encourage others to find similar solutions to sluggish performance.

McKesson’s $8 bln Celesio bid falls a bit short

24 Oct 2013

U.S. pharmaceutical wholesaler McKesson has struck a deal with Celesio’s owner to buy the German group in a 6.1 billion euro deal. But the 39 percent premium it implies still leaves the offer on the lower end of what minorities could expect. There may be room for more.

Time for Reckitt to quit prescription drugs

22 Oct 2013

The household goods group is wondering what to do with its heroin substitute. A full disposal would be the best outcome. Sales are sliding, generic competition is mounting, and the business sits oddly with the rest of Reckitt. Still, the parent will be lucky to get 2 bln stg.

Japan ageing blues give generic drugmakers a high

18 Oct 2013

Elderly patients are wrecking the viability of Japan’s prized healthcare system. Tokyo is embracing copycat medicines to bring down costs, boosting generic manufacturers’ prospects. Global drug firms are watching another large, lucrative market slip out of their grip.

No need for Celesio to rush into $5 bln deal

8 Oct 2013

Folding the German drug distributor into American rival McKesson would yield big savings. But Celesio has no CEO, is only in talks with McKesson and its controlling family is struggling and wants cash. Courting more buyers may bump up the price and put minority investors at ease.

Amgen investors gain from investment banker CEO

4 Sep 2013

The biotech led by Bob Bradway, formerly of Morgan Stanley, made mincemeat of the value arguments put up by Onyx and its advisers, raising its offer only 4 pct to clinch a $10.4 bln deal last week. An M&A banker at the helm can work – when it’s negotiating prowess that matters.

Amgen absorbs successful M&A therapy

26 Aug 2013

The mega-biotech is paying a near-50 pct premium to buy Onyx for $10.4 bln. Investors rewarded the pluck, adding more to Amgen’s market value since it first bid than it is shelling out to seal the deal. The cocktail of revenue gains and cost cuts is a winning merger prescription.

Investors finally getting the biotech IPO joke

22 Aug 2013

It’s the best year in a decade for such companies to go public. While quantity has gone up, though, quality has not. Biotechs offering barely more than science experiments appear able to attract funding. History suggests buyers may be disappointed. They may be starting to notice.

Elan acquisition contains possible side effect

29 Jul 2013

Over-the-counter drugmaker Perrigo isn’t a natural buyer for the Irish biotech. Elan is largely a shell company with cash and royalty rights to a blockbuster treatment. Tax savings dominate the logic of the $8.6 bln deal. Relying on a practice under growing scrutiny is risky.

Big pharma’s Chinese dreams: bruised, not broken

24 Jul 2013

China’s fast-growing drug market was meant to save foreign groups from patent expiries and western governments’ cutbacks. The GlaxoSmithKline bribery scandal may signal a new wave of price pressure and slower growth. But Beijing needs big pharma just as it in turn needs China.

GSK finds toxic side effects in Chinese market

16 Jul 2013

The UK pharma group is accused of using elaborate kickback schemes. But the Chinese combination of pervasive state involvement, underpaid doctors and coveted foreign products is almost an invitation for bad practice. A full cure requires time, money and stronger institutions.

Roche doesn’t need to risk prudent M&A reputation

15 Jul 2013

The pharma giant is eyeing a $20 billion plus bid for Alexion, Reuters says. The U.S. biotech group’s lucrative line in rare “orphan” drugs could help Roche diversify after recent setbacks. But the mooted price isn’t cheap, and orphan drugs’ blessed protected status may not last.

Hostile $10 bln biotech bid set to go far higher

1 Jul 2013

Partners Pfizer and Bayer are natural buyers of Onyx. But Amgen has jumped in first, sending the cancer drug specialist’s shares up more than 50 pct. Onyx’s position in the hot field, rights over multiple potential blockbusters and a wide field of bidders suggest a rowdy auction.

India should take U.S. pharma complaints seriously

25 Jun 2013

After a series of legal setbacks, U.S. drug giants are again pushing for stronger patent protection in India. The industry’s main concern is protecting emerging market profit. But in the long term, India’s domestic drug makers would also benefit from a more supportive system.

Supreme Court offers cure for generic drug delays

17 Jun 2013

The U.S. justices allowed antitrust suits against pharmaceutical firms like Solvay that pay rivals not to offer cheaper generic medicines. The practice might still pass muster, but the anticompetitive effects are clear. Drug makers may end up charging consumers less.