Biotechnology

Merck’s giant cost cuts not enough

28 Nov 2005

The US drugs group is the latest drugs group to slash its workforce, with plans to cut 7,000 jobs. But the industry s real problem is flagging sales. Cost cutting won t solve this. What it needs is new drugs.

Obesity is the next big thing

24 Nov 2005

Many Americans eat too much and diabetes is soaring. This healthcare problem is an opportunity. Many diabetics look set to switch to inhaled insulin. But investors haven t priced in the change. Pfizer and Sanofi are the ones to bet on.

Medicis nips off more than it can tuck in botox battle

21 Nov 2005

The US plastic surgery group thought it was stealing a march on rivals when it bid $2.8bn for botoxpeddler Inamed. Instead it triggered a far from cosmetic fourway freeforall, which will probably cost it its independence and see Inamed broken up.

Elan’s stock is cheating death again

20 Nov 2005

The Irish biotech s stock has lost more than 90% of its value on two occasions. Yet it is coming back to life again. That's pretty amazing. But there s still a good chance the stock will fall back in its tomb not dance on it.

J&J lops nearly $4bn off Guidant price

15 Nov 2005

A wave of recalls nearly sank Johnson & Johnson s agreement to purchase the medical device firm for $25bn. The average merger may destroy value. But calling off this merger would have hurt both US medical groups.

Selling Serono will be difficult

8 Nov 2005

The Swiss biotech giant s pipeline is poor, its biggest drug s sales have probably peaked, and the group just paid over $700m in fines. So big pharma is unlikely to kick the door in. Serono's best bet is a partnership with a smaller group which will be hard to arrange.

Merck wins Vioxx case

3 Nov 2005

The drug group has won the second Vioxx liability challenge. Good for it, as all the facts were stacked in its favour. But shareholders shouldn't get overexcited just yet. Merck has close to 6,500 cases to go and the number is mounting.

Novartis makes $5.1bn offer Chiron can’t refuse

31 Oct 2005

The Swiss drug group s 42% stake in the US vaccine maker gave it unbeatable leverage in takeover negotiations. Chiron s board had little choice but to accept a slightly sweetened second offer. This leaves plenty of honey for Novartis.

Serono pharma scandal may be first of many

19 Oct 2005

Serono s plea to criminal wrongdoing flags up the common problem of drug company gifts to doctors. This case may be just the tip of an iceberg for the industry. The US Justice Department claims that 150 similar cases are pending.

Tamiflu supercharges Roche growth

19 Oct 2005

The Swiss drugmaker can t keep up with demand for its flu treatment amid fears of a pandemic. And sales of its cancer drugs are booming. But the real story behind the Q3 sales update is that margins are almost certainly rising sharply.

Glaxo applies to sell first OTC diet pill

18 Oct 2005

An FDAapproved diet drug may seem to be a slam dunk in the US market, but it's probably not. Though the US has a surfeit of fat folks, the market for diet products is well fed already.

Altana would fetch juicy premium by selling pharma

18 Oct 2005

The German pharma and chemicals group should be able to eliminate its conglomerate discount by splitting into two businesses. But the company could do better by selling off its drugs division, which could be worth more than the entire company.

Boots’ Healthcare auction gets too hot

30 Sep 2005

The UK retailer s sale of its overthecounter drugs division is attracting numerous groups who want to consolidate the sector. Good news for Boots, bad news for the winner.

Chris Evans’ biotech fund investigated for fraud

28 Sep 2005

The UK biotech investor used to be the Pied Piper of UK biotech. His involvement was validation enough. The fraud investigation comes on the back of a dismal investment record. Investors won t listen to the pipes any longer.

Novartis bids $4.5bn for remainder of Chiron

1 Sep 2005

The Swiss drug group wants to fix its minority investment in the gaffeprone US vaccine maker. Dissatisfaction with Chiron s management has left the group vulnerable to Novartis welltimed bid.

Merck loses $253m verdict in Vioxx case

22 Aug 2005

The US drug company picked what looked an easy win for its first court defence of recalled painkiller Vioxx. It lost spectacularly. The verdict will be reduced. But the group s own goal may cost it billions.

Shire tries to extend life of its cash cow

19 Aug 2005

The UK pharma group wants rival Barr to delay introducing a generic copy of the hyperactivity drug that provides nearly half its revenues. Buying off its rival will not come cheap. But this is a necessary step to keep the cash flowing until sales of new drugs kick in.

AstraZeneca should sell out

1 Aug 2005

It may sound defeatist for the pharma group s new boss to flog the company. It isn t. Pharma acquisitions may have a chequered history, but the economic case for the sale of Astra is overwhelming.

AstraZeneca boss bows out at a high

28 Jul 2005

Chief executive Tom McKillop couldn t pick a better time to leave the AngloSwedish drug company. Sales and earnings are soaring. But he bequeaths his successor a challenge: fixing the group s sputtering drug pipeline.

Bayer jumps on hybrid debt bandwagon

19 Jul 2005

The German conglomerate s successful E1.3bn offer is just the latest in a string of issues of deeply subordinated debt. The high yields are proving popular with investors. The debt s ability to cheaply finance takeovers will attract more issuers.