Biotechnology

Will anyone run Alcatel and Lucent?

24 Apr 2006

The terms of their merger reportedly require twothirds board vote to remove the chairman or the chief executive. The transatlantic power sharing agreement between the telecom equipment makers is already a fudge. Institutionalising it is a poor idea.

Bayer should break itself up

19 Apr 2006

The German conglomerate should use its E16.5bn Schering bid as an opportunity to sell off its chemicals business, among other units. This would erase a 20% conglomerate discount and reduce the need for a big dilutive capital hike to fund Schering.

Serono tries to show it has options other than sale

31 Mar 2006

After failing to sell itself for $15bn, the Swiss biotech is seeking permission to sell $5.5bn in new shares for acquisitions. But it hasn't said it won't sell itself if a bidder shows up. It seems Serono is trying to avoid being left embarrassingly on the shelf.

Big pharma’s balance sheets are inexcusably flabby

31 Mar 2006

Take Pfizer the world s biggest drugs group runs its balance sheet like a biotech with uncertain prospects. With net cash, slowing growth and a stock that hasn t moved in eight years, Pfizer could easily buy back $50bn in stock.

Bayer’s E16bn bid for Schering looks like a winner

23 Mar 2006

The German conglomerate is acting as Schering's white knight. Its bid of E86 per share trounces Merck's hostile offer of E77. Merck will be hard pressed to beat this offer. Bayer has greater synergies with Schering than Merck does.

Sanofi’s Plavix payoff looks dubious

22 Mar 2006

The French drug maker and BristolMyers have agreed to pay a company to delay introducing a generic version of the bestselling drug. Investors are betting this legally challengeable agreement will stand up to scrutiny by competition authorities. But that's uncertain.

Schering makes awkward bite for any white knight

21 Mar 2006

The German drug group s stock may be trading above Merck s E14bn hostile offer. But Schering s awkward collection of businesses means there is no natural white knight. A breakup might be key to unlocking value.

Schering must fight value-based defence

20 Mar 2006

The German drugs company claims to have turned its back on poison pill defences. That s good news. But it will struggle to come up with a convincing case to stave off Merck.

Merck’s Schering bid raises governance worry

15 Mar 2006

The German pharma group's shares have fallen by 8% since it launched its E14bn bid for Schering. But why? The deal creates value. It may be due to Merck's KGaA structure, which vests control in the Merck family. Outside investors have no say in what it ends up paying.

Merck hits Schering with E15bn hostile bid

13 Mar 2006

The German drugs group may have firmly rejected the E77 a share cash bid. But this looks like an emotional reaction. The bid looks pretty fair. It won t be enough for Schering simply to dismiss Merck. It needs to deliver more value to investors.

Elan’s rocketing stock makes juicy pair trade

9 Mar 2006

The Irish biotech s shares rose 26% after US regulators allowed Tysabri, its drug for multiple sclerosis, back on the market. This has opened up a wide valuation gap between Elan and the company that comarkets the drug Biogen Idec.

Colgate succession may spark a deal

3 Mar 2006

The toothpaste and soaps giant has struggled of late. So Reuben Mark CEO for 22 years will want to hand over the reins on a high note. One way to do that is to clinch the $13bnplus sale of Pfizer s consumer and OTC business. But this is not without risk for shareholders.

Canadian drug company protests too much

24 Feb 2006

Following in the footsteps of Overstock.com, Biovail has accused shortsellers and a research firm of conspiring to tank its stock. However, both companies have themselves to blame for their lousy market performance.

Pfizer OTC sale sets path for other drugs groups

8 Feb 2006

The US drugs company could fetch up to $15bn by selling wellknown consumer goods brands such as Listerine mouthwash. With pharma multiples depressed and consumer goods companies riding high, other drugs groups will follow Pfizer. The US drugs company could fetch up to $14bn by selling wellknown brands such as Listerine mouthwash.

SkyePharma hurries to ignore shareholders

3 Feb 2006

The UK drug group has decided to break itself up and appoint a new chairman, despite the vocal objections of 37% of shareholders. The dissidents are merely demanding a pause and a vote. The board s haste is odd and wrong.

AstraZeneca’s earnings flatten out years early

2 Feb 2006

Investors always figured the UK drugmaker had several years of smooth sailing but 2006 earnings may be flat. And bigger rocks loom ahead. With a wave of patent expirations in 2008, the stock deserves more than its current 15% discount.

Serono’s options dwindling

31 Jan 2006

The Swiss biotech has attracted no bidders at $15bn. This worsens the dilemma of Bertarelli, the boss and controlling shareholder. If he really wants out, the price must be cut. But doing so smacks of desperation and could put even a fair price out of reach.

Why is Guidant recommending J&J’s new $23bn bid?

12 Jan 2006

J&J's bid isn't just lower than Boston Scientific's $25bn rival offer. It hasn't even increased it to the level that it originally offered. What's more, the J&J offer is below Guidant's share price. Guidant's recommendation is puzzling.

RAG set on buying E.on’s E3.4bn Degussa stake

16 Dec 2005

The unlisted German coal miner s core business is in decline. It needs to take over the chemicals group to achieve its objective of an IPO. But the purchase makes no sense industrially. It would create an unappealing and undercapitalised conglomerate.

American Pharma’s $4.1bn deal pinches minorities

29 Nov 2005

The drug company is acquiring its parent in a deal its billionaire founder says was negotiated at arm's length. But that s not reflected in the valuation placed on the main asset being acquired. Sometimes it hurts to be a minority investor in the US.