Healthcare

Hadas: What a new hip taught me about economics

3 Apr 2019

As the codeine wore off, I pondered the mass delivery of individualised care. My lessons: Adam Smith was wrong about specialised labour’s inhumanity, Karl Marx was mostly wrong about class conflict, Max Weber was right about bureaucracy and free markets can’t cure medical ills.

Walgreens ails from inflation deficiency

2 Apr 2019

More than $7 bln in value bled out of the drugstore chain after it slashed earnings guidance. Prescription prices are the root cause: After years of rising, they’re now under pressure and crimping once-fat margins. Walgreens’ “most difficult quarter” won’t be the industry’s last.

Review: Theranos story is both crazy and ordinary

29 Mar 2019

A new documentary depicts the blood-testing company’s founder Elizabeth Holmes as an unblinking, controlling CEO who believed she could defy science. Her $9 billion dreams ended in fraud charges. In some ways, though, it’s a painfully normal Silicon Valley story.

AstraZeneca takes precision approach to cancer M&A

29 Mar 2019

The UK drugmaker will pay up to $6.9 bln to work with Daiichi Sankyo on a breast cancer drug. It’s a low-risk way of growing in a hot area, without the pain of an acquisition. The more than $4 bln jump in the Japanese group’s market value suggests the two are better off together.

Multiple political bets birth $17 bln health deal

27 Mar 2019

Centene’s purchase of WellCare is a gamble on continued U.S. government support for care of the elderly just as the Trump administration is challenging Obamacare. It’s also a wager that regulators won’t stop the deal or force hefty divestitures. Scale makes that a reasonable bet.

Ditching Obamacare would be self-defeating

26 Mar 2019

The Trump administration wants a court to throw out all of the Affordable Care Act. That’s dubious politically as past attempts helped flip the House to Democrats. And success would actually undermine the White House’s main healthcare goals, including reducing costs.

Second-hand $4 bln colostomy bag LBO may get messy

26 Mar 2019

Medical-kit maker ConvaTec’s value rose 9 pct after a report that buyout group EQT might be interested. Its shares are down a third since it was floated by private equity in 2016. A new owner could slash costs to rip out cash, but risks sacrificing more market share to rivals.

Biogen loses same Alzheimer’s bet others have lost

21 Mar 2019

The failures of similar drugs in formal trials meant Biogen’s effort was always a long shot. Yet ditching it vaporized $18 bln, or over a quarter, of the biotech’s value. The giant market for a therapy and the fear of missing out lured in both the company and Wall Street.

Bristol-Myers $74 bln deal needs surgery

28 Feb 2019

Big shareholder Wellington Management and activist Starboard Value have both come out against the pharma firm’s deal for Celgene. The market also isn’t pricing in the acquisition happening as Bristol-Myers envisaged. It doesn’t help that the buyer was already overpaying.

Germany’s Merck chips into aggressive M&A game

27 Feb 2019

The drugs and chemicals supplier is making a hostile $5.2 bln offer for Versum, after Barrick’s $18 bln unsolicited tilt at Newmont. Both aim to nix earlier agreed deals, while Roche is injecting $4.3 bln into new tech. Recent market wobbles have not yet dulled merger mania.

GE-Danaher pharma deal is a win-win remedy

25 Feb 2019

CEO Larry Culp is unloading the conglomerate’s biologics unit to his old employer for $21 bln. It’s his boldest downsizing move yet and will help cut leverage. Danaher gains scale in its health business at a reasonable price while Culp needed a sale, not necessarily top dollar.

Roche pays late entry fee to gene therapy party

25 Feb 2019

The Swiss group is buying Spark Therapeutics, which develops treatments that tinker with patients’ DNA, for $4.3 bln. The deal gives Roche a leg up in a hot sector. But it comes with a fat premium, risk and fierce competition. The rewards may take years to come through.

Activists turn guinea pigs in drug M&A trials

21 Feb 2019

Starboard is targeting Bristol-Myers’ board after its $74 bln Celgene deal. Appaloosa is pushing $46 bln Allergan to fix its problems or sell. They’re using standard activist tactics. But Big Pharma’s size and complexity have long provided some immunity to such attacks.

Smith & Nephew $3 bln spinal deal is a backbreaker

11 Feb 2019

The medical services group’s shares fell on a report that it may buy U.S. surgery specialist NuVasive. A takeover would take the company into a market it doesn’t know, and need years to pay off. New CEO Namal Nawana would do better to focus on smaller, less risky M&A.

Philips could be a tortoise to Healthineers’ hare

29 Jan 2019

The 31 bln euro Dutch medical tech group has a lower valuation and operating margin than its larger German peer. Steady growth and a Healthineers stumble could help it close the gap. Global ageing should lift both companies, though Philips has the greater recovery potential.

Fewer Chinese babies intensify an old story

22 Jan 2019

The country’s birth rate fell below 11 for every 1,000 people, its lowest level since the People’s Republic started in 1949. It’s a reminder that the country’s working-age population will keep shrinking, and makes redesigning a weak pension system a far more pressing matter.

Eli Lilly’s $8 bln cancer deal is a worthy wager

7 Jan 2019

The drug giant reckons it’ll take years to get a good return on its pricey acquisition of Loxo. But the upstart has had startling success figuring out why rare cancerous mutations occur, rather than where. Longer term, that should make for plenty of targets – and sticky prices.

Morgan Stanley’s virtual mega-bank model pays off

3 Jan 2019

The Wall Street firm is funding a whopping $33.5 bln loan for Bristol-Myers’ purchase of Celgene through its decade-old alliance with Japan’s MUFG. Acting like one bank gives Morgan Stanley bragging rights and a chance to play alongside rivals with much bigger balance sheets.

Bristol-Myers takes $74 bln bet against the market

3 Jan 2019

There are good reasons to buy rival oncology giant Celgene. But cost cuts don’t cover the 54 pct premium and the target’s owners get the financial benefit. Bristol is hoping for luck in the courts and multiple regulatory approvals that Celgene’s shareholders were skeptical of.

Wellness programs and waists spread together

24 Dec 2018

Most U.S. companies subsidize everything from fitness trackers to yoga classes for employees. Yet evidence shows these regimes do little to keep workers fit. It’s other benefits, such as curbing healthcare costs and attracting talent, that will keep the wellness craze going.