Healthcare

Precision-medicine IPO deserves Groupon discount

31 May 2024

Tempus helps tailor treatments with its library of DNA and other tests. In a market giddy about AI, it could be worth $6 bln. One hitch is that founder Eric Lefkofsky, who started the online coupon provider, will keep control. The marginal value of its data is also shrinking.

AI will help treat Big Pharma’s looming illness

15 May 2024

Drug discovery is a long and costly process with success rates below 10%. Caps on prices and shorter patent periods in the US will also make life harder for the likes of Pfizer, AstraZeneca and rivals. Despite patchy results, betting on machines may be the best hope of a cure.

Memo to McKinsey: Avoiding Arthur Andersen’s fate

14 May 2024

After coughing up $1 bln for opioid-related settlements, the elite consultant may face criminal charges, too. There are notable differences from when a 2002 US indictment killed the auditing giant. But the looming existential threat increases the likelihood of costly concessions.

The Agnellis’ risky Philips bet starts to pay off

29 Apr 2024

The Dutch group settled its US faulty sleeping aid claims for a manageable $1.1 bln, lifting its stock 35%. The relatively quick fix vindicates Exor CEO John Elkann’s $3 bln punt on Philips when legal worries kept investors away. It may also shift the thinking on big litigations.

UnitedHealth shows market power is double-edged

16 Apr 2024

The insurer’s reach in the US healthcare system drew an antitrust probe – and a ransomware attack that could cost $1.6 bln. It’s grist for trustbusters: dominance may let firms take their eye off the ball on cybersecurity, and make the systems that depend on them more fragile.

Capital Calls: Philips

10 Apr 2024

Concise views on global finance: The Dutch company’s CEO Roy Jakobs secured a win by finalising a settlement with US regulators over faulty sleep aids. But myriad other potentially costly cases remain open, justifying an ongoing share-price discount.

Blackstone cures two ailments in one Moderna shot

27 Mar 2024

Higher costs of capital are pressuring CEOs into tough spending decisions, while buyout shops flush with cash want to deploy it. This dynamic makes a $750 mln deal to fund a biotech project a crafty solution. The hard end of the bargain: ceding value from promising flu research.

Capital Calls: Wegovy gets a booster

22 Mar 2024

Concise views on global finance: The US government’s decision to pay for weight-loss drugs for some older patients is a big step for makers Eli Lilly and Novo Nordisk. Not because it will boost their share prices, but because it makes current valuations less far-fetched.

European private equity IPO door is only half open

22 Mar 2024

Buyout firms tested the market with cautious pricing for two beauty companies’ listings. Although Galderma performed, Douglas’s debt pile spooked investors. For sellers sitting on $3 trln of unsold assets the message is clear: discounts work, but only for healthy businesses.

Reckitt slump offers a cue to slim down

18 Mar 2024

The $41 bln Lysol maker’s shares fell sharply after it lost a US court case. One option for Reckitt Benckiser is to separate the nutrition arm, focus of the legal woes. That would ease the hit to the rest of the group, but also leave a new arm that may yet be worth something.

American healthcare is a perfect cyber-hostage

7 Mar 2024

A hack at the biggest processor of insurance claims snarled billions of dollars of payments to US hospitals. The healthcare system’s interdependent web of middlemen means none can be allowed to fail, making it an ever-more-obvious target for the growing onslaught of ransomware.

Galderma IPO offers EQT a temporary facelift

6 Mar 2024

The Swiss skin care group is looking to raise $2 bln in a listing to cut debt. At $22 bln, in line with L’Oréal’s valuation, its private equity owners could get decent returns. But with the French beauty giant growing similar products faster, retaining margins may be challenging.

Bayer’s inertia will make mounting problems worse

5 Mar 2024

The $30 bln seeds and drugs maker has ruled out a rapid breakup. Bayer could have used a consumer health sale to cut debt and offset bigger US litigation costs. Betting instead that it can grow its way out of trouble risks exacerbating a yawning discount to the sum of its parts.

Stolen razors are least of US drugstores’ concerns

1 Mar 2024

Walgreens and CVS have locked up items from deodorant to toothpaste. But a hyper-focus on theft is a reflection of drugstores’ more dire straits. Online competition, labor issues, and inflation are cutting into margins. Larceny is just the thing that pharmacies can control.

Healthcare’s $450 bln octopus becomes the kraken

28 Feb 2024

Trustbusters are probing UnitedHealth, which insures 53 mln patients and works with 10% of US doctors, while also managing pharmacy benefits and more. It’s hard to dispute the market power. Whether there’s abuse, and how to stop it without hurting consumers, is less obvious.

Europe shares’ granola rush will become thin gruel

26 Feb 2024

The STOXX 600 Index has hit a record, but local funds are seeing outflows. As in the US a small bunch of companies – the so-called GRANOLAS group – are behind the good news. But in the Old Continent they’re more dependent on weak economic growth rather than the AI revolution.

Too many drugmakers drool at anti-obesity trough

21 Feb 2024

Novo Nordisk’s and Eli Lilly’s jumbo valuations are luring rivals eager for a piece of the $100 bln weight-loss pie. This herd behavior has become a pattern in pharma, crimping returns on R&D. Despite slim odds of getting a big market slice, the temptation is too hard to resist.

The obesity drug craze is entering its next phase

8 Feb 2024

Eli Lilly and Novo Nordisk can’t keep up with demand for their weight loss medications. In this Viewsroom podcast, Breakingviews columnists discuss the hype among celebrities, the different approaches to prescribing them in the US and Europe, and how they can reshape the world.

Novo digs $11.5 bln moat around weight-loss jewel

5 Feb 2024

The pharma giant’s parent is buying US manufacturer Catalent. It helps Novo Nordisk keep up with soaring demand for obesity drugs, and makes it harder for rival Eli Lilly to catch up. With such limited capacity, Catalent’s rivals like $4 bln ROVI may soon be in play.

Capital Calls: Disney virtual reality

23 Jan 2024

Concise views on global finance: The $174 bln entertainment giant introduced a novel way for consumers to experience its brands through a partnership with Apple. Further connecting the dots between theme parks and the metaverse might bide Iger some time.