Biotechnology

Trump’s grain of truth makes biotechs vulnerable

7 Dec 2016

The U.S. president-elect said he dislikes what has happened to drug prices, and pharma stocks slumped. Hillary Clinton's views once carried similar weight. That's because the jabs are justified. Investors know there's too little innovation and too much reliance on raising prices.

Pfizer would play to strength by focused selling

10 Nov 2016

The $217 bln drug company has decided not to split, but is mulling selling or hiving off its consumer health division. There's no obvious logic for a pharma firm to hawk Advil and ChapStick. Pfizer history suggests it's a better seller than buyer, and the timing is also right.

Drug probe is caboose of consolidation train

4 Nov 2016

U.S. prosecutors are investigating Mylan, Allergan and others for colluding over generic-medicine prices. Lawmakers are on the case, too. But proving conspiracy is hard as barriers to entry and limited competition mean companies can raise prices in sync without acting illegally.

California voters guinea pigs in drug-price trial

3 Nov 2016

The electorate decides next week whether to cap the cost of prescription medicine. If approved, Proposition 61 may initially be hard to implement. But as with reducing car emissions and legalizing marijuana, a yes vote from the Golden State could prompt a nationwide debate.

Samsung’s biotech IPO is an $8 bln medical mystery

2 Nov 2016

The giant conglomerate's BioLogics unit is valuing itself generously. Demand for biological drugs is soaring, but the group's untested technology and model – touted as analogous to the contract manufacture of semiconductors – mean investors have to take its prospects on trust.

Valeant sale epitomizes new CEO’s dilemma

1 Nov 2016

Selling the Salix unit for $10 bln would be Joseph Papa's first big move since taking the reins. It would help pay down the drug giant's whopping debt. But it would also reduce desperately needed future cash flows. Papa needs to prove he can do more than preside over a fire sale.

Gene-sequencing tech leapfrogging its usefulness

11 Oct 2016

That's one way to view Illumina's sales shock, which singed $7 bln of investor wealth. Machines for mapping out human genomes are improving faster than researchers can figure out how to use them. For buyers with ideas on how to push testing in clinics this creates opportunity.

Contagion wipes another $3 bln off biotech’s value

6 Oct 2016

Half Alnylam's market value evaporated after patient deaths ended a drug trial. The promise of novel treatments based on RNA interference had pushed its market value to $12 bln. That's now down to $3 bln, suggesting investors fear trouble with one may indicate problems with all.

Samsung’s biotech bet undergoes first major trial

5 Oct 2016

As smartphone growth slows, Samsung heir Jay Y. Lee is targeting a nascent market for drugs made from living cells. Selling up to $2 bln of shares in the South Korean group's BioLogics unit will test investor appetite for a developing technology and an unfamiliar business model.

Pfizer’s pricey non-split may only defer problem

26 Sep 2016

After years of study costing $600 mln, the drugmaker says it won't break itself up. Boss Ian Read always seemed keener on acquisitions. It's true the process helped close a conglomerate discount. But Pfizer's sprawl and tendency to overpay means the gap may soon reappear.

Allergan is turning small deals into bigger ones

20 Sep 2016

Following the giant sale of its generic drugs arm, the Dublin-based company is back on the acquisition trail. It is paying up to $1.7 bln, or a 1,550 pct premium, for liver-disease biotech firm Tobira. Beware the use of money that's burning a hole in boss Brent Saunders' pocket.

Abbott eases its M&A risk with $4.3 bln asset sale

19 Sep 2016

With two acquisitions worth over $30 bln pending – and the purchase of Alere, in particular, not going smoothly – the $62 bln health firm is vulnerable. Selling its eye-surgery unit to J&J gives Abbott needed financial breathing room and perhaps extra leverage with Alere.

Perrigo shows danger of overplaying M&A defense

12 Sep 2016

The $13 bln drug company fought off Mylan's hostile takeover bid last year. Now it's missing the targets it set to persuade investors to reject the deal. It's a common infraction that in Perrigo's case has prompted activist Starboard to dive in. Overpromising is a fool's errand.

Bayer’s tendrils close around Monsanto

6 Sep 2016

A raised $65 billion takeover offer puts more pressure on Monsanto to bend to its German peer. Bayer might stretch a tiny bit further to win over the U.S. seed-maker’s board, but a deal at these levels makes little financial sense. Monsanto is already pushing its luck.

Drugmakers get their $2.3 bln worth in Washington

1 Sep 2016

U.S. lawmakers are prodding Mylan about EpiPen in the latest probe into rising prescription prices. Dozens of legislative proposals to rein them in have stalled over the last decade. No industry spends more than pharma lobbying Congress. The investment now faces its biggest test.

Mylan copies own EpiPen, parodies U.S. drug system

29 Aug 2016

The $23 bln pharma group, under fire for raising prices, is launching generics identical to its branded anti-allergy injectors at half the price. The unusual move raises questions about Mylan's motives. Even if they're genuine, it's an indictment of a byzantine market structure.

Mylan injects adrenaline into healthcare debate

25 Aug 2016

The EpiPen maker bowed to political pressure by offering discounts for its allergy treatment. The complex and opaque U.S. healthcare system may encourage high prices, but also doesn't force the likes of Mylan to jack them up. This episode does more to expose flaws than fix them.

Pfizer bets $14 bln it knows better than market

22 Aug 2016

The drug giant is paying a 120 pct premium for Medivation. It's a good fit and the biotech's cancer blockbuster is a rare gem. The whopping premium suggests Pfizer sees something others missed. But a heated auction and back-of-the-envelope math hint that the buyer is overpaying.

New Perrigo boss takes cue from his predecessor

10 Aug 2016

The $14 bln drugmaker just warned on profit again. Former CEO Joe Papa cut forecasts as he left in April, before junking the outlook at new employer Valeant. Perrigo investors are left to decide whether John Hendrickson is merely starting fresh or signaling bigger problems.

Bristol-Myers suffers $21 bln self-inflicted wound

5 Aug 2016

That's how much value investors wiped off the pharma firm after its trial to broaden the use of a cancer drug failed. It was an unnecessarily risky move for Bristol, whose immunotherapy has been outselling Merck's. The stumble will allow its more cautious rival to clean up.