Biotechnology

Diligence-lite M&A boom claims first victim

2 May 2008

Smith & Nephew has discovered a company it bought last year wasn t what it seemed. And while the healthcare firm may claw back some costs, it s still on the hook. Other buyers who put bravado before caution in a seller s market may find themselves in a similar predicament.

Tech loves the falling dollar, pharma doesn’t notice

22 Apr 2008

The tech sector is humming as the dollar falls. US drugs companies are just as global, but the benefit is much smaller. Foreigners may buy more iPhones if the price drops, but they won t pop many more pills.

Novartis’s two-stage $39bn Alcon deal looks odd

7 Apr 2008

The Swiss drugmaker is paying $11bn now for 25% of Nestlé's fastgrowing eyecare business and $28bn in two years time for a further 52%. Novartis is getting the initial stake at a discount to Alcon's share price, but this way, any synergies will take years to come through.

Japanese drug makers take out their wallets in US

10 Dec 2007

Japan is the world s #2 drugs market. Yet its pharma groups are poor at R&D and face government pricing pressure. Eisai s $3.9bn takeover of MGI could just be the start of a pricy shopping spree for US biotech companies.

Chances of Bristol-Myers bid receding

6 Dec 2007

The drug company appeared takeover bait last summer. But government oversight and a patent dispute gave the company a window of safety. This may have closed, but Bristol s restructuring and a rising valuation may be enough to ensure independence.

Sarkozy is Sanofi-Aventis’ best poison pill

20 Nov 2007

The French pharmaceutical group will have no major shareholder once L Oreal and Total have sold their stakes. And its shares have been battered the last two years. But the company is under Sarko s protection and it won t be taken over any time soon.

Biotechs’ premium makes them dealmaking force

19 Nov 2007

Celgene could have found $3bn to buy smaller rival Pharmion from cash on hand. But it had a more valuable currency its richly valued stock. Biotech groups high multiples and their growing ambitions could derail big pharma s acquisition plans.

Bizarre tie-up underscores Japan’s governance flaws

25 Oct 2007

Japan's economy has made an impressive recovery. But its corporate governance landscape still looks bleak. Oddball deals remain far too common. Unless attitudes change, activist investors will be unable to unlock value.

Icahn succeeds in putting Biogen on the block

15 Oct 2007

Despite chalking up good stock returns of late, Carl Icahn was able to kick the biotech into a sale. Big pharma's hunger for acquisitions has emboldened activists. Now larger rivals like Amgen may look like targets, too. But at some $25bn, Biogen may be the upper limit in size.

Oral sex could double Merck blockbuster

30 Aug 2007

A new study shows the drug group s vaccine against a sexuallytransmitted virus linked to cervical cancer also prevents head and neck cancer This means both sexes should receive the treatment. Oddly enough, it could also tone down the political heat surrounding the vaccine.

Novartis growth depends on BRICs

8 Aug 2007

The company abandoned its Indian patent fight over a cancer drug. This may seem irrelevant it gives the drug away 99% of the time there. But its future depends on sales in a handful of developing countries. They could account for up to half its growth in the next five years.

Roche’s hostile bid for Ventana may be smart

30 Jul 2007

The Swiss group s decision to go hostile with a $2.6bn offer for Ventana appears odd. It has itself been hounded by an unwanted suitor. And Roche isn t promising cost cuts, so its return may be miserly. It may also have to pay more. But the deal could be canny nonetheless.

Pfizer’s troubles arrive ahead of schedule

18 Jul 2007

The US drug giant s sales were expected to tread water until 2009, when Lipitor loses patent protection and the real pain starts. But its hard times might be starting three years early. Sales of the $13bnayear cardiovascular drug are now being hit by competitors.

Plavix ruling doesn’t free Sanofi for Bristol-Myers bid

19 Jun 2007

The US Federal court decision on the blockbuster drug is a relief. But the French pharmaceuticals company faces other challenges. It is in a weakened position to engineer a merger with BMS. And a lowpremium friendly deal would open the road to competing bids.

Glaxo should stick to making drugs, not drinks

14 Jun 2007

The pharma giant could get £7bn from selling its toothpaste and beverage business. Making sugary drinks alongside diet pills makes no sense. Doing so would also also please shareholders, who are nursing heavy losses from fears over Glaxo s diabetes drug, Avandia. A sale would also please shareholders, who are nursing heavy losses from fears over Glaxo s diabetes drug, Avandia.

Sanofi’s US setback may put company in play

14 Jun 2007

The French drug maker lost E6bn, or 6.5%, of its market cap after a panel said its proposed antiobesity drug is too risky to recommend. It looks like a lost blockbuster. With a weak strategy and two big shareholders on the way out, Sanofi could become an acquisition target. The French drug maker lost E7bn, or 8%, of its market cap after a panel said its proposed antiobesity drug is too risky to recommend.

Glaxo’s US grilling more opportunity than threat

6 Jun 2007

Investors in the UK drug maker have panicked over the possible recall of diabetes drug Avandia wiping £9bn off its market value. US Congressional hearings today on the drug may fuel more overreaction. That would make Glaxo s already cheap stock a veritable bargain.

Glaxo drug anxiety need not lead to withdrawal

22 May 2007

The UK pharmaceuticals shares have taken a battering after a study linked its blockbuster diabetes drugs to higher risk of heart attacks. The author is credible, but his technique is disputed. For now, it looks like Glaxo will only suffer mild damage.

Mylan ripe for activists after $6.7bn Merck deal

15 May 2007

The drug firm is paying 50% over its own market value for the German generic business just two years after it abandoned a smaller deal. Shareholders are unhappy. But it isn t putting the deal to a vote. If activists rally its disgruntled investors, Mylan may be sorry.

Mylan pays full price for Merck’s generics

14 May 2007

The US drugs group is paying a hefty E4.9bn for the German unit, thereby leapfrogging rivals into number three spot in the industry. But for the deal to create value, Mylan must deliver its aggressive synergy targets. That won't be easy.