Healthcare

Spain’s sick make for healthy investment

6 Sep 2016

Germany’s Fresenius is paying 5.8 bln euros for Spanish hospital chain Quironsalud. It’s a reasonable price for a sector that has proved lucrative for its private equity owners. An ageing population and a fragmented market means it may still have potential.

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.

EpiPen probe may give Mylan allergic reaction

24 Aug 2016

Three U.S. senators are slamming the $24 bln drug firm for jacking up the cost of its anaphylaxis treatment more than fivefold since 2008. An investigation could limit Mylan's pricing power on the product that has provided much of its growth and spread to the firm's other drugs.

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.

UK fat-busting plan is incoherent

18 Aug 2016

A tax on sugary drinks is good for the public health and purse but may hit poorer families in the short term. Yet the government shirked another trade-off: restricting advertising of unhealthy foods, which could have changed consumer behavior at the expense of company profits.

Obamacare fails to cover U.S. insurers

16 Aug 2016

Aetna is the latest to exit exchanges selling subsidized health plans. The Affordable Care Act is getting more people insured. But private insurers seem unable to make money. System gaming, adverse selection and political gridlock over refining the law risk squeezing them out.

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.

Novo Nordisk premium will survive drug wars

5 Aug 2016

The Danish pharma group's shares fell more than 8 percent after it lowered profit and sales guidance and warned of lower prices in the key U.S. insulin market. Such pressures won't abate. Still, in a growing market, Novo warrants a premium over peers. Just a less hefty one.

Biogen is a risky $90 bln buyout target

3 Aug 2016

The biotech giant could be available, with its CEO stepping down, and potential acquirers are circling. Closing the gap between the Alzheimer's drug optimism built into Biogen's valuation and an acceptable price for a buyer may, however, prove a challenge too far.

U.S. health insurer M&A has only death-row chances

21 Jul 2016

The Department of Justice has filed to stop Anthem's $44 bln purchase of Cigna and Aetna's $33 bln deal for Humana. They may try to fight, but the odds aren't with them. The government's arguments look strong, and President Obama's antitrust prosecutors are on a winning streak.

Prognosis is good for China’s healthcare market

13 Jul 2016

Drugmaker and pharmacist CR Pharma is targeting a $1 bln-plus Hong Kong flotation. Healthcare offers investors an antidote to the slow growth that plagues much of China's old economy, since a richer, older country will need more and more drugs. Expect other big deals to follow.  

U.S. healthcare mega-deals get grim diagnoses

8 Jul 2016

Aetna's $34 bln acquisition of Humana and Anthem's $44 bln plan to buy Cigna are risky propositions to shrink the industry from five big insurers to three. Investors now expect both mergers to die. If right, the companies also would return to independence worse than they began.

Theranos hobbles toward gluenicorn fate

8 Jul 2016

The blood-test upstart's value was already racing from $9 bln to zero. Now a U.S. watchdog is set to ban Elizabeth Holmes' company from the industry for two years. Theranos' aims were appealing, but reinventing technology, regulation and governance in one go is hard.

McKesson finds skilled surgeons to revive tech arm

28 Jun 2016

The $40 bln drug distributor is carving out its languishing healthcare IT business and merging it with one owned by LBO firms Blackstone and Hellman & Friedman. Cost cuts and attentive management should help make it more valuable. Only excessive debt might impede a full recovery.

Nestle no closer to the medicinal Kit Kat

28 Jun 2016

The Swiss consumer giant’s new boss spent the last decade running medical company Fresenius. It’s a nod to the convergence between food and healthcare. But it makes more sense when the transfusion runs the other way. Nestle’s unhealthy governance, meanwhile, remains untreated.

White House wannabes slip through safety nets

22 Jun 2016

America’s healthcare fund for the elderly will run out two years sooner than expected while Social Security resources are depleting fast, too, new research finds. Retirement savings already fall well short. These subjects are amazingly missing from the presidential campaign.

U.S. medical merger offers little financial cure

15 Jun 2016

AmSurg and Envision are combining in a $10 bln stock deal with each owning roughly half. They’re keeping two headquarters and yet still expect $100 mln of synergies, including “meaningful” ones from new revenue. It’s a dubious proposition that seems mostly like empire-building.

Cancer breakthroughs bring financial side effects

15 Jun 2016

New therapies using the immune system may someday turn cancer into a chronic, not deadly, condition. They may also cause drug spending to triple. The next U.S. president might avoid action – but the increasing fiscal strain makes price controls or harder negotiations inevitable.