Biotechnology

Securitisation may advance tropical drugs funding

26 Jan 2005

Using sophisticated financial engineering to help the poor pay for drugs may seem like a crazy investment idea. But it isn t. Tropical drugs have been overlooked by mainstream investors. That creates an inefficiency that can be exploited.

Pharma closes out annus horribilis

30 Dec 2004

And with three major rulings awaited in 2005, sentiment could sour further. £90bn was wiped off the market capitalisation of the top ten firms in 2004, making it one of the worst years ever for drugs stocks.

Pharma could even gain from regulatory clampdown

21 Dec 2004

The average drug firm spends as much as CocaCola or Unilever on selling, general and administrative costs. This is far too much. A clampdown on advertising and marketing could lift the drugs industry out of a zerosum game.

Pfizer suffers $24bn hit

17 Dec 2004

The US drugs group's stock has been slammed after its blockbuster painkiller, Celebrex, was linked to heart attacks. This is a bigger blow for the sector than Vioxx. Add a heavy fall in AstraZeneca and it makes one of the worst days ever for big pharma.

Hedge fund uses dubious tactic in M&A battle

3 Dec 2004

A US fund is trying to use its voting power to force Mylan into a valuedestroying $4bn acquistion of King, a fellow US drug maker. Why? Because it has hedged its economic risk to Mylan but kept a big stake in King. Hopefully, this dubious tactic will fail.

Hedge fund ethics questioned over Vioxx

2 Dec 2004

A US fund shorted Merck after employing a researcher who played a key role in forcing its blockbuster painkiller to be withdrawn. The researcher didn't reveal his potential conflict. But the hedge fund must have known about it. That's dubious ethics.

Elan’s object lesson in refinancing

24 Nov 2004

The Irish company skirted with bankruptcy just one year ago but now has a market capitalisation of $11bn. The key to Elan's recovery was its recapitalisation in 2002. Like all distressed financings, timing was everything.

Novartis overhauls generics division

17 Nov 2004

Expected job cuts and factory closures at the world's second largest generics producer highlight shrinking margins throughout the industry. Competition has become bloodier since the introduction of "authorised generics", which savage the most lucrative part of the industry.

Actelion’s drug failure leaves shares cheap

8 Nov 2004

Europe s secondlargest biotech has seen its shares crash 30% on the failure of a drug in trials. This is far too much of a selloff leaving this highgrowth stock priced as a value one.

Pfizer’s Celebrex fears could sink Merck further

5 Nov 2004

The Canadian government is weighing reports that Pfizer s painkiller Celebrex has caused the death of 14 patients. If Celebrex does cause heart attacks, the estimated heart attacks caused by Merck s recalled pill Vioxx could rise far above 27,000.

Matching rights make debut in UK auction

1 Nov 2004

Warner Chilcott will continue to recommend an offer from CSFB/JP Morgan so long as they match any counterbid. It's a deterrent. Investors don't like obstacles in the way of auctions, such as break fees. But it's hard to argue that Warner has done badly by investors.

End of boom in sight for Germany’s Merck

27 Oct 2004

The drugs and chemicals company has outperformed its competitors sharply this year as its promising new cancer drug hit the market. But its more lucrative chemicals business for flatscreen TVs already looks past its peak.

Warner Chilcott takes the bird in the hand

27 Oct 2004

The company has recommended a bid from one privateequity consortium, even though another hasn t ruled out an offer. The board was right not to hold out for the bird in the bush, given the takeout valuation it has secured.

Goldman group bids £1.5bn for Warner Chilcott

25 Oct 2004

But the auction for the UK speciality drugs maker isn't over. Two more private equity consortia are still in the running. But £1.5bnplus can only be justified if Chilcott can continue its string of successful deals to replace its aging stable of drugs.

Pharma gloom deepens with patent ruling

21 Oct 2004

With nearly all the big drugs companies reporting on the same day, investors may have missed the most important story. One of the last areas impervious to cheap generic drugs may have fallen man made proteins.

Pharma may lose no matter whom wins US election

18 Oct 2004

The Democrats will lower drug prices, but California governor Schwarzeneggar s actions suggest the Republicans will too. Imposing bulk purchasing of drugs for Medicare could reduce US sales by 5% over the next ten years. And that s the optimistic case. Imposing bulk purchasing of drugs for Medicare could halve big pharma's US sales growth over the next ten years. The Democrats will lower drug prices, but California governor Schwarzenegger s actions suggest the Republicans will too.

US firms to repatriate billions under new law

13 Oct 2004

Hundreds of billions of dollars in retained earnings could return to the US under a new tax holiday. With overcapitalised pharma companies among the biggest winners, expect some hefty returns of capital to investors.

Eli Lilly could be next pharma disaster

8 Oct 2004

If the US drugs giant loses an important court case this month, the ruling will blow a hole in its stock. Worse, it could lead to a downward rerating across much of the pharmaceutical sector.

Merck’s rivals will share Vioxx pain

1 Oct 2004

The withdrawal of the US group s arthritis drug will cause knockon effects throughout the drug sector. Merck will promote its remaining drugs heavily. Novartis and Glaxo will find life tougher. But ScheringPlough could be a beneficiary.

Merck in serious trouble after Vioxx withdrawal

30 Sep 2004

The US drugs giant has stopped selling its blockbuster arthritis treatment because the pill increases the risk of heart attack and stroke. If investors seem to be panicking, it is because the withdrawal compounds other problems: a dry pipeline and generic competition.