Biotechnology

Healthcare’s nonprofit status belongs in the grave

13 Sep 2017

Publicly traded Centene is buying tax-exempt insurer Fidelis for $3.75 bln. The seller’s priest-CEO earns an ungodly sum. Exorbitant pay is rife in nonprofit healthcare, yet is rarely tied to community benefit. Euthanizing these firms’ tax break would be a social good.

Cheap genetic tests leave insurers exposed

8 Sep 2017

23andme’s value is getting a 50 pct booster shot thanks to its simple, affordable way of checking if you’re a high risk for Alzheimer’s and the like. Those who are may want more health, life and disability coverage. That will make the dysfunctional U.S. healthcare system worse.

Gilead flies $12 bln kite to find cancer mini-me

28 Aug 2017

The purchase of Kite Pharma is reminiscent of Gilead's own history and past blockbuster deals. The $96 bln biotech is betting a plucky upstart has found cancer treatments that will change medicine, and society will pay the staggering cost. This protégé is a risky pupil, however.

Konica Minolta deal helps develop clearer picture

6 Jul 2017

The Japanese company that abandoned cameras for copiers a decade ago is now putting its focus squarely on medical diagnostics. An up-to-$1 bln acquisition of Ambry Genetics alone won't assure Konica Minolta's future. It is, however, an affordable way to start changing its DNA.

Biotech IPO rejuvenates Hong Kong market

13 Jun 2017

Shares of WuXi Biologics, the city's biggest listing this year, popped as much as 39 pct on their debut. High earnings growth and a lack of exciting IPOs led to strong demand for the $511 mln deal. This is good news for a bourse keen to attract a new breed of entrepreneurs.

Chinese biotech IPO deserves potent price

2 Jun 2017

WuXi Biologics could raise over $500 mln in a hot Hong Kong debut. A value of up to 30 times 2018 earnings sounds high, especially given a novel business model. But earnings are soaring and the local bourse lacks exciting drug firms. Growth and scarcity is a powerful formula.  

Samsung gambles on an heirless future

31 May 2017

The South Korean giant will keep a structure that lets Jay Y. Lee keep control with a small stake. But a new left-leaning government might make it harder for the de facto leader to rule this way. Samsung looks unprepared for a future without its scion.

Thermo Fisher experiment starts with pricey deal

15 May 2017

The maker of scientific instruments is paying $5.2 bln to buy Patheon, which produces drugs and the chemicals used in them. Cost savings don’t come close to covering the premium. Its quarry's industry may be ready for consolidation, but Thermo also has a lot to learn about it.

AstraZeneca reaches point of maximum pain

27 Apr 2017

The drugmaker's revenue fell 10 percent in the first quarter, despite a boost from non-recurring sales. Losing patents has hurt Astra's pricing power. Winning approval for new drugs would help boss Pascal Soriot rebuild. Investors are not fully factoring in that possibility.

Cardinal sings out two more drug warnings

18 Apr 2017

The U.S. pill distributor said for the third time since October that falling prices would hurt profit. Cardinal Health underscored the hard times ahead by paying $6 bln for Medtronic's medical-supplies unit to diversify. Other links in the pharmaceuticals chain will suffer, too.

Alere discount diagnoses limits of deal desertion

17 Apr 2017

The U.S. medical-test company is selling for 9 pct less than first agreed. Buyer Abbott had threatened to walk away after Alere's billing practices and accounting came under fire. To settle such a good MAC test case suggests the M&A escape clauses are merely negotiating tools.

Nominee’s industry ties risk side effects for FDA

29 Mar 2017

President Trump pledged to close the revolving door, yet FDA nominee Scott Gottlieb is taking his second whirl. Experience in government and industry is valuable, but his potential conflicts with pharma firms may hamper the agency. Recusal isn’t a prescription for effectiveness.

Allergan adds ice and a slice to M&A cocktail

13 Feb 2017

The drug company is paying $2.5 bln for Zeltiq and its diet-avoiding, fat-freezing tech. It sounds a wackier play than the dozen deals Allergan struck last year. But vain customers pay cold cash for the treatment, making it less speculative than other deals, like gene therapy.

Gilead’s boom-bust presages gene therapy’s future

8 Feb 2017

A rapidly shrinking market for treating hepatitis C vaporized $9 bln of the biotech's value. A race by rivals to find and treat remaining patients could lead to further price cuts. It's a glimmer of how extraordinary success at treatment may pose a bottom-line conundrum.

Outsiders get a way to sample China’s biotech boom

7 Feb 2017

WuXi Biologics is preparing for a Hong Kong flotation. Innovation friendly policies have boosted the mainland drug market. But foreign investors lack ways to bet on this big part of China's new economy. They should be keen to inject money into WuXi.

J&J bid lets Actelion have $30 bln cake and eat it

26 Jan 2017

Johnson & Johnson has offered $280 per share for the Swiss drugmaker - 70 pct more than it was worth last November. That's a full price to bolster the U.S. group's specialist drugs portfolio. Meanwhile, Actelion shareholders get to keep most of the upside from its R&D pipeline.

Holding: Dealmakers can expect big MAC attack

11 Jan 2017

Unnerving tweets and fickle policy ideas from Donald Trump add to angst already undermining mergers like Abbott's $5.8 bln bid for Alere. Buyers invoke material adverse change clauses for escape purposes, but they're almost never enforced in court. That may be about to change.

Gene therapy is ready to become hereditary

3 Jan 2017

The prospect of treating diseases like hemophilia and cancer by tinkering with DNA has a long history of both promise and frustration. Steady progress means 2017 should be the year the technology finally hits the U.S. market. The problem may be figuring out how to pay for cures.

Actelion looks like a lose-lose for Sanofi

14 Dec 2016

The French firm is mooted as a buyer for the Swiss biotech group after J&J walked away. The financial logic looks equally strained, and overpaying would smack of desperation about Sanofi's own business. With drug prices under pressure, pharma M&A will not get any more rational.

Deal remorse puts investors in sorry state

7 Dec 2016

Abbott cited "material adverse events" in a legal bid to end its $5.8 bln takeover of rival Alere. Similar tensions have arisen lately in mergers involving Yahoo, Williams and Cigna. All caused share prices to swing. As M&A deals get stretched, skepticism can help avoid regrets.