Healthcare

Germany’s Fresenius needs credibility injection

7 Dec 2018

The 22 bln euro healthcare provider fell 15 pct after it warned of stagnant profit. Investing more in hospitals makes sense, but investors are smarting from past blunders, and need more clarity. With pressure from insurers to cut costs growing, a healthy valuation looks remote.

Americans spend faster to die younger

29 Nov 2018

Life expectancy has fallen for the third year in a row. Yet the U.S. lays out far more money than other countries to foil the Grim Reaper – and the amount is rising. The issue isn’t just what’s spent but where. More on basic public health and education would be a good start.

Colfax trades aging industry for aging Americans

19 Nov 2018

The industrial outfit is pivoting to healthcare by acquiring orthopedic-device maker DJO from Blackstone for $3.2 bln. Baby boomers’ growing need for knee braces and implants ensures a healthy market. But loading up on debt makes this a stressful way to chase perpetual youth.

U.S. companies seek to kick big pharma addiction

13 Nov 2018

Walmart and Home Depot are fighting back against drugmaker programs that cut patients’ expenses while leaving employers paying full fare. It’s part of an escalating war between providers, insurers and corporations over healthcare costs. The effectiveness remains to be proved.

GE boss could face his own goodwill writedown

12 Nov 2018

The firm’s stock sank anew on Monday despite Larry Culp’s vow to speed asset sales. Repeated failures to draw a line under power woes and other liabilities have shredded GE’s credibility. The new chief risks falling into the same trap, and losing investors’ confidence.

Elliott’s Athenahealth deal leaves sickly odor

12 Nov 2018

The activist is helping take private the healthcare firm it started agitating against 18 months ago. But at $5.7 bln the deal is some 16 pct below its May offer – and Elliott is relying on a partner to buy the lion’s share. Such tactics may not play well against future targets.

AstraZeneca needs magic pill to hit $40 bln target

8 Nov 2018

A raft of new cancer drugs helped the pharma giant return to sales growth in the third quarter. A strong pipeline suggests it has turned the corner. To hit his 2023 revenue goal, though, CEO Pascal Soriot needs regulatory approvals to go his way, and U.S. price caps to stay away.

Obamacare roots grow too deep to dislodge

7 Nov 2018

Democratic control of the House effectively ends Republican hopes of overturning the former president’s healthcare reforms. Even voters in red states are warming to the law as Medicare expands. The worry now for insurers, hospitals and middlemen is a Democratic victory in 2020.

Flawed U.S. health gives Fresenius dual boost

7 Nov 2018

California rejected a plan to cap dialysis rates. A new Congress is also unlikely to curb the cost of U.S. healthcare. Both are good news for the likes of Germany’s Fresenius Medical Care, the world’s top dialysis firm – but less so for insurers and patients.

Holding: M&A’s big MAC attack headed for retreat

5 Nov 2018

If Boston Scientific manages to nix its $275 mln deal with Channel Medsystems, it’ll be only the second Delaware case of a buyer able to walk after a material adverse change. More likely the courts will toss both cases at trial or on appeal. The upside should be clearer rules.

Top Trump economic aide sells last of credibility

23 Oct 2018

A report from Kevin Hassett’s CEA essentially equates single-payer healthcare with collectivized Soviet agriculture. It’s a distortion of one Democratic idea just days before elections. Hassett also claimed tax cuts would pay for themselves. He’s due a move to the campaign team.

ConvaTec investors brace for lengthy patch-up job

15 Oct 2018

The UK medical devices maker lost nearly 30 pct of its value after it warned of lower growth and its CEO resigned. The selloff seems excessive given modest changes to revenue and margins. The remedy could be cost cuts. But any turnaround will have to wait for a new chief.

Broken Akorn deal is exception to MAC rule

1 Oct 2018

Merger escape clauses are notoriously hard to trigger, but a judge has let Fresenius nix its $4.75 bln Akorn deal. Don’t expect many copycats. The case includes misconduct claims, and may yet be overturned. Corporate-friendly Delaware courts are loath to second-guess contracts.

Judgment, nerve and luck keep Merck CEO in job

26 Sep 2018

The drug maker has waived its retirement age so Kenneth Frazier can stay on as boss. He has justified the move by prioritizing R&D, fighting drug lawsuits, and making smart hires. The chance-filled path of hit cancer drug Keytruda also helped. And 65 is no longer a sell-by date.

Rising generic-drug pressure may produce M&A panic

6 Sep 2018

Novartis has dumped part of its unit producing copycat medicines. Mylan and Perrigo are mulling sales, too. Regulators’ attempts to encourage competition and the emergence of a large nonprofit pill producer mean multiple sellers risk fetching only bargain basement prices.

Theranos got one diagnosis spot on

5 Sep 2018

The once-$9 bln medical testing firm’s technology never worked – something it covered up – and now Theranos is being wound down. Founder Elizabeth Holmes faces fraud charges. But she was right that patients shouldn’t have to wait and pay huge sums to know what’s wrong with them.

China Biologic suffers contaminated infusion

27 Aug 2018

The plasma-products maker rejected two buyout offers, including one worth $3.9 bln led by its former boss, in favour of a dilutive share sale at a discount to both. Investors are stuck with fuzzy maths and poor governance that show why China Biologic would be better off private.

Healthscope’s property trick is takeover poison

22 Aug 2018

Having rejected two acquisition bids, the struggling Australian health group will put A$1 bln of hospitals into a trust in which it will sell 49 pct - then rent the facilities back. The cash will be useful, but operating costs and risk will rise, deterring more generous suitors.

Consumers offer Ping An cover from market storms

21 Aug 2018

The $160 bln conglomerate's first-half earnings rose by just over a third, thanks to life and health insurance. Market clouds present dangers for an insurer with lots of investments, but its results suggest Chinese households can provide some protection from the squalls.

Icahn got it half right with Cigna battle

14 Aug 2018

The activist investor has backed away from his fight against the U.S. health insurer's $52 bln deal to buy Express Scripts. On merit alone, his opposition was justified. But for activists, that is no longer enough to win. Shifting shareholder rosters have changed the game.