Biotechnology

Healthcare tech deal turns neat triple play

9 Jun 2010

Eclipsys investors score a 19 pct premium, while cost cuts and potential revenue gains should benefit seller and buyer Allscripts alike in the $1.3 bln allshare transaction. There are some ifs, but not for Misys. It cashes out of its majority Allscripts stake for a fat return.

Cerberus blood loss stanched with Talecris sale

7 Jun 2010

The private equity group is in line for more than a 20fold return on healthcare firm Talecris. Losses on disastrous investments in Chrysler and GMAC might have sent Cerberus to the underworld. Its nearly $2 bln profit on this one deal offers new life.

Abbott’s Indian drugs deal fields three big problems

21 May 2010

Big Pharma s most important drugs are losing patent protection, growth in developed markets has slowed to a crawl, and much of its cash is trapped overseas. Abbott s $3.7 bln purchase of Piramal Healthcare s generics arm offers a partial response.

Pessimism over Pfizer reaching crescendo

20 May 2010

The loss of patent protection on its blockbuster Lipitor in Canada is the first small wave of a coming typhoon of diminished sales over the next five years. But Pfizer has battened down and investors have factored in most of the carnage. This looks like an opportunity.

Mental health deal should ease shareholders’ minds

17 May 2010

Executives at Psychiatric Solutions were awarded rich options packages shortly before news leaked of a buyout with the CEO onboard. The timing looked unsavory, and led to a federal investigation. But it also spurred an auction, bringing a higher $2 bln bid from rival UHS.

OSI bid battle may end with a whimper

30 Mar 2010

After Japan's Astellas went hostile for the $3.5 bln U.S. biotech, many expected a bidding war to break out. OSI is trying to attract rival suitors, but has now opened its books to Astellas. A sweetened bid, around current market values, would probably seal the deal.

Biotech offers welcome radical investment therapy

22 Mar 2010

Companies in the sector often resist liquidation, even if it s the wisest outcome. One small firm is adapting a biological process apoptosis, or preprogrammed death. Unhappy shareholders can withdraw their cash quota if things go wrong. It s a minor scientific breakthrough.

Teva can afford to pay up for Ratiopharm fix

18 Mar 2010

The generic drugs leader has won the auction for the German group with a $4.95 bln cash bid. The deal gives Teva the number two spot in the world's secondlargest generics market. The price may look toppy at 11.7 times EBITDA, but Teva can squeeze out more savings.

Pfizer cuts risk in Ratiopharm auction

3 Mar 2010

The U.S. pharma giant seems to have been lured into the battle for the German generics producer. Creditors will be happy, as both of the current bidders have reasons not to be too aggressive. But Pfizer may also be cautious. It apparently already quit the contest once.

Activist shareholders are back for good reason

1 Mar 2010

Proxy season is nearly here, and potstirrers like Carl Icahn and Ron Burkle are challenging companies from biotech Genzyme to bookseller Barnes & Noble. Easy pickings are gone and funds that raise a fuss have lagged of late. But activists should outperform over the long run.

Alcon independents show they mean business

20 Jan 2010

Directors landed a convincing first punch against Novartis lowball offer to the eye care group s minority shareholders. The legal arguments are complex, but the defence highlights fundamental issues about shareholder rights that Novartis will struggle to dodge.

Time for Alcon independents to prove their worth

8 Jan 2010

The eye care firm's independent directors aren't powerless to push Novartis to raise its offer to buy out minorities. The Swiss drugs group could replace them with stooges who might back its current bid. But this would have reputational costs. The directors can exploit that.

Alcon minorities deserve more from Novartis

4 Jan 2010

Novartis has made Alcon minority shareholders a lowball $153ashare offer for their 23 percent of the eye care firm. Meanwhile, the Swiss drugmaker is paying Nestle $180 per share for its 53 percent stake. The minorities may not have much clout. But they should demand more.

Bristol-Myers finds clever way to shrink

16 Nov 2009

The US drugs maker is offering its stockholders the chance to swap at a discount into shares of its publicly traded subsidiary Mead Johnson. That would improve Bristol s earnings per share which should come in handy with as much as 30% of its sales at risk as patents expire.

Rewarding bosses for going shopping is daft

4 Nov 2009

Pfizer awarded CFO Frank D Amelio a $1.2m bonus for his role in buying rival Wyeth. Executives may need incentives to sell it often means they ll lose their job. Paying for purchases, on the other hand, encourages empire building.

J&J finds merger-sized savings – in itself

3 Nov 2009

The US healthcare conglomerate will slash up to 8,000 jobs. Unfortunately, the benefits are likely to be as fleeting as the cuts accompanying giant pharma mergers. That's because it's increasingly tough finding new drugs to replace lost revenue as sales of old products run down.

Abbott’s E4.5bn Solvay deal a good use of offshore cash

28 Sep 2009

Against some ambitious recent deals, the US healthcare company's purchase of the Belgian chemical group s drug arm looks boringly sensible. At two times sales, the price is right. It s better than leaving the cash sitting in overseas banks, too.

Cerberus finds a deal that isn’t for the dogs

14 Sep 2009

The investment firm got creamed on its Chrysler and GMAC bets. But its buyout of drugs company Talecris is shaping up to be a hit. The pending IPO could give it a return 24 times its original investment. Private equity can still be a jackpot.

Does JPMorgan regret ditching private equity?

24 Aug 2009

It left the business after its buyout of Warner Chilcott five years ago annoyed big clients like TPG. Now its former LBO arm is minting it with Warner Chilcott s $3.1bn P&G buyout redux. At least JPMorgan is still raking in big fees from its former sub.

Elan clever to market chunk of self to big pharma

2 Jun 2009

The IrishAmerican biotech faces a 2011 cash crunch. So selling a minority stake, to Pfizer or Bristol, makes sense given its intriguing but unfunded drugs pipeline. Moreover, the wave of pharma consolidation could hinder a full sale.