Healthcare

Smith+Nephew calls rare bluff over CEO pay

21 Oct 2019

Namal Nawana wanted a higher salary to run the UK artificial joint maker. The board said no and has parted company with him. His $8 mln package lags U.S. peers, and the shares have done well since he joined 17 months ago. Still, he should have negotiated harder at the start.

U.S. healthcare needle is pointing to the left

4 Oct 2019

A new Trump administration plan would give more Medicare business to private insurers – in sharp contrast to Democratic proposals to expand free care. Stock prices, big employers’ increasing dissatisfaction and public opinion suggest the latter outcome looks somewhat more likely.

J&J plays opioid settlements to its advantage

2 Oct 2019

The $348 bln drugmaker’s low-cost deal to end a suit from two Ohio counties is a sign the painkiller-scandal litigation may cost less than expected. Financial incentives and game theory pressure hard-hit areas to come to terms quickly. Settlements may only partly cover damages.

Election year could be potent M&A sedative

1 Oct 2019

Drugmakers and healthcare companies made up the lion’s share of deals this year. U.S. presidential elections next year will inject uncertainty, because the sector is so geared to policy shifts. Proposals from Democrats like Elizabeth Warren could dampen animal spirits for years.

Vaping isn’t dead, just prematurely haggard

18 Sep 2019

Juul Labs started as a safer alternative to smoking, but now lawmakers are treating it as a menace. Its recent $38 bln valuation has likely gone up in flames. That doesn’t mean e-cigarettes won’t be profitable. Margins could even be higher as a niche health aid.

Upstart dental unicorn’s IPO is a risky bite

3 Sep 2019

Online tooth-alignment service SmileDirectClub is targeting an $8 bln IPO valuation. It’s growing quickly, but profitability looks fashionably distant. Along with governance that entrenches bosses and extra risk of regulatory scrutiny, investors may feel a toothache coming on.

Ebola bonds are wonky way to tackle pandemics

13 Aug 2019

The World Bank-backed instruments are meant to use private capital to fight disease in poor countries. But their rather random structures create weird incentives for both issuer and buyer. As a way to tackle outbreaks, it’s not obvious they’re better than more direct charity.

Healthineers robot buy puts big price on old veins

8 Aug 2019

The $41 bln Siemens spinoff is paying $1.1 bln for Corindus, which helps automate vascular operations. It’s paying a vein-popping 100 times revenue to stay ahead of Philips in the race to fix ageing blood vessels. Healthineers will have to pump up growth to justify the price.

Saudi and healthcare tech each get shot in the arm

5 Aug 2019

The kingdom's sovereign wealth fund is injecting $200 mln into healthcare app Babylon. After being passed over by SoftBank, the startup gets fresh impetus and a $2 bln valuation. Saudi gets welcome proof that its poor human rights record won’t stop companies taking its money.

Philips will grow into its healthier valuation

22 Jul 2019

The 37 bln euro medical-technology group has erased its valuation discount to Siemens Healthineers. That is justified by strong orders unveiled in second-quarter results. CEO Frans van Houten’s company offers the same growth story as its German rival, but with fewer distractions.

Viewsroom: Can India solve its water crisis?

11 Jul 2019

Chennai, the country’s Motor City, has run dry. Another 20 metropolises could follow by next year. The personal and economic toll is mounting. Plugging leaks, better crop choices and proper pricing can help. Often, as water problems elsewhere show, that requires good governance.

U.S. healthcare reform ideas are too single-minded

27 Jun 2019

Americans are dissatisfied with the only rich-world system that isn’t universal. Democratic presidential candidates and others tend to fixate on either nudging the status quo or so-called “Medicare for all.” Other nations actually offer more varied examples – all costing less.

Smith & Nephew U.S. pay wheeze hides deeper logic

25 Jun 2019

The British artificial-knee maker is considering moving its listing across the Atlantic, the FT reports. American investors’ tolerance for high wages might help keep CEO Namal Nawana happy. S&N’s business, its M&A ambitions and lowly valuation are better reasons for jumping ship.

Aging AbbVie turns to ugly $63 bln Botox remedy

25 Jun 2019

The drug maker’s Humira accounts for more than half its sales but may soon face competition. Buying Botox maker Allergan at a 45% premium looks like an excessively expensive and temporary face-lift. AbbVie’s money and time could be better spent on more invigorating targets.

Skill, luck and law drive $11 bln biotech buyout

17 Jun 2019

Array BioPharma has developed several potential blockbusters for others. But it wouldn’t be selling to Pfizer at a 62% premium without an earlier gift from antitrust regulators. A pact between two rivals sent valuable drugs Array’s way, along with cash, making it a juicy target.

China’s pharma shake-up wins healthy endorsement

11 Jun 2019

Drugmaker Hansoh is valued at $10 bln after pricing shares at the top of the range in its Hong Kong IPO, backed by high quality investors. It looks like an early beneficiary of Beijing’s radical price reforms which favour diversified giants and will knock out low-quality rivals.

For U.S. patients, knowledge isn’t power

28 May 2019

Forcing hospitals and doctors to disclose net prices to consumers, as President Trump is proposing, is a good idea. Patients can only shop around if they know what they will pay. Even so, healthcare still fails many other tests of being a competitive market.

GE owners give Culp wrong kind of endorsement

8 May 2019

Shareholders of the U.S. conglomerate offered qualified support for the boss’s turnaround. They strongly backed his directors while casting a protest vote on pay. So it’s regrettable that they rejected a call for an independent chair, which could help avoid future problems.

GE’s decent quarter won’t stop the shrink

30 Apr 2019

The $85 bln conglomerate burned less cash than feared in the first quarter, but problems with Boeing’s 737 MAX jet bring new risk to the one division that was thriving. That leaves CEO Larry Culp with no growth engines, and the prospect of cutting GE into still smaller pieces.

America’s opioid legal blitz is a smoking mess

8 Apr 2019

Overdose deaths are surging, Oklahoma won a $270 mln settlement, and a blizzard of lawsuits is bearing down on makers and distributors of the drug. It recalls the tobacco crisis that ended with a $206 bln pact. Yet proving liability and apportioning blame will be much harder.