Biotechnology

U.S. justices square the helix on gene patents

13 Jun 2013

The Supreme Court ruled that companies can hold exclusive rights to synthetic human genes, but not naturally occurring ones. That allows biotech businesses to reap rewards for their work without stifling the research of others. The decision serves science, industry and the law.

AstraZeneca lung deal puts wind behind turnaround

10 Jun 2013

The troubled pharma group’s acquisition of Pearl, its second deal in a month, should protect the key respiratory business. New Chief Executive Pascal Soriot is using prudent M&A to flesh out his strategy. Still, the company has a way to go to close its valuation discount.

Catch-and-release technique gets Pfizer off hook

3 Jun 2013

The U.S. pharma giant paid $1.3 bln for Esperion in 2004, but shut it down when a promising drug didn’t work out. Now the firm is going public anew. Same name, founder and a cholesterol treatment it discovered – and with Pfizer as a backer. It’s a novel form of schmuck insurance.

Valeant shows how some M&A favors the brave

28 May 2013

The $8.7 bln Bausch & Lomb deal is the biggest yet for the acquisitive pharmaceuticals group, but it comes with cost savings worth at least $5.6 bln. Investors added about as much to Valeant’s market value, giving it firepower to seek new targets. CEOs elsewhere should take note.

A.G. Lafley will be more proctor than gamble

24 May 2013

Bringing back the former P&G boss won’t ensure the Pampers-to-Scope giant reclaims former glory. His last decision – of a successor – flopped. But unlike the turnaround facing J.C. Penney’s returning ex-CEO, Lafley’s job is somewhat simpler: oversee cost cuts and brand building.

Even losers win from $5 bln Actavis deal

20 May 2013

Investors loved it when the generic drug firm was the subject of buyout talks. Now they’re just as pleased that Actavis is buying smaller Warner Chilcott instead. The sector is so ripe for consolidation that it’s hard to come up with any combination that investors won’t embrace.

Bigger really is better in generic drug mergers

15 May 2013

Pharmaceutical firm Actavis has spurned interest from rivals Valeant and Mylan. Instead, the $16 billion generics manufacturer is pursuing the much smaller Warner Chilcott. That combination won’t deliver the hefty dose of cost savings that could come from a larger deal.

Wall Street plays pass the biotech parcel

13 May 2013

Finance firm Royalty Pharma is offering $5.7 bln to buy Elan, which just announced a $1 bln deal to buy a chunk of royalties that Theravance receives from Glaxo. Confused yet? Blame low rates and Big Pharma’s risk aversion for fertilizing M&A bankers’ creative schemes.

Hostile drug deal gets too clever for its own good

18 Apr 2013

Finance firm Royalty Pharma tried to use Elan’s $1 bln stock buyback to swoop up the entire company. But it devised a puzzlingly complex tender offer that ended up replacing a solid long-term shareholder with investors much more likely to demand a chunkier premium.

Thermo Fisher gives corporate bidders Life

15 Apr 2013

The healthcare equipment maker is paying $13.6 bln for Life Technologies, edging out private equity bidders by about the value of the expected synergies. The buyer’s shares also rose, suggesting a rational price. After Dell and Heinz, the M&A playing field now looks flatter.

Bausch & Lomb IPO should be seen through new lens

10 Apr 2013

Warburg Pincus bought the eye care company for $3.7 bln during the buyout boom. The private equity firm is reportedly seeking a price tag of up to $10 bln. Even after fixing Bausch & Lomb’s problems, it’s still not worth a premium to, say, Merck. About $8 bln makes more sense.

Walgreen-Boots deal adds helping to full plate

19 Mar 2013

The American and European drug chains haven’t finished merging their cross-border operations. They’re adding distributor Amerisource to the mix by taking a minority stake. Cost savings and negotiating heft may follow, but the combined firms’ management could be stretched thin.

$6.6 bln won’t be enough to end Elan’s rash dreams

25 Feb 2013

The biotech has grand M&A plans after selling rights to a blockbuster drug for $3.25 bln. Royalty Pharma’s indicative offer is based on the notion that it will invest more wisely than Elan’s current bosses. It’s a credible premise, but a 4 percent premium won’t seal the deal.

Novartis pay-for-silence retreat is first of many

19 Feb 2013

In the face of public fury, the Swiss drugmaker has cancelled $78 mln in non-compete payments to its retiring chairman. Daniel Vasella’s case was extreme: ultra-high reward for essentially no action in an egalitarian land. But it sets a strong precedent for activists everywhere.

Herbalife: the ultimate financial plaything

15 Feb 2013

Carl Icahn is joining Bill Ackman and Dan Loeb in the war over the nutritional supplements seller. One idea of his is another Herbalife buyout. The controversial business model and rich cash flow make it easy for Wall Street to keep imprinting fresh narratives on the company.

Biotech deals show how to pluck without killing

13 Feb 2013

Pharma mergers are usually a recipe for destroyed value. Yet big drugs companies need the innovation more prevalent at biotech firms. Sanofi’s increased stake in the $16 bln Regeneron, avoiding full control, is a good way to collect feathers without swallowing the bird.

Even after the knock, Novo Nordisk’s rating is fat

11 Feb 2013

The Danish drugmaker lost about $14 bln in market value after U.S. regulators held off approving a new insulin treatment. As the world grows obese, the diabetes specialist should profit handsomely. But the shares look rich, even after the 13 pct markdown.

Elan’s $3.25 bln deal reduces risk – and raises it

6 Feb 2013

The biotech is selling part of its 50 pct stake in its blockbuster drug, and main asset, Tysabri, to partner Biogen. That should maximize Elan’s profit: this reduces the incentive Biogen has to sell competing drugs. The danger is the cash burns a hole in the company’s pocket.

Corporate surgery may be in order at Novartis

23 Jan 2013

The Swiss pharma giant has hired back an old hand to replace veteran Chairman Daniel Vasella. That implies continuity, not change, at Europe’s second-biggest drugmaker. Still, new chair Joerg Reinhardt might ask whether the sprawling group needs to do fewer things better.

Pfizer spins, but not completely off

22 Jan 2013

The pharma giant’s $2.2 bln IPO of its animal health unit, Zoetis, should cheer investors. Those contemplating buying the stock, however, will want to read the warning labels closely. Super-voting shares could mean Pfizer retains board control even if its stake goes below 50 pct.