Healthcare

Prognosis is bleak for Shire’s troubled Baxalta bid

9 Oct 2015

The rout in pharma stocks has made the Irish group’s all-share offer less attractive for its recently spun-off U.S. rival. Shire would have to add much more stock to offer Baxalta the $30 bln it initially touted. It should delay – even if it then misses its chance altogether.

Scorched U.S. tech and pharma feel the M&A chill

6 Oct 2015

Two of the hottest sectors for deals this year have extended their run. Apple chip supplier Skyworks agreed to buy PMC-Sierra for $2 bln and AmerisourceBergen is purchasing PharMEDium for $2.6 bln. Investors in both acquirers jeered, building on a worrisome trend for mergers.

Valeant’s back-foot problem flares up in Congress

28 Sep 2015

The pharmaceuticals company keeps fighting through chronic skepticism about its acquisitive ways and the related borrowing. Now, U.S. lawmakers’ questions about drug prices have cost Valeant $11 bln in market value. Always being on the defensive could eventually take its toll.

Bayer $11 bln plastic IPO looks far from fantastic

21 Sep 2015

The German pharma giant is floating its Covestro division. The unit is cash-generative and well positioned for growth. But it is also a capital-hungry and cyclical business that has destroyed value for years. Bayer might need to be more flexible on the float price.  

Dose of reality lifts U.S. health costs prognosis

17 Sep 2015

A rise in the percentage of insured Americans adds weight to government predictions that medical outlays will hit 20 pct of GDP by 2024. But global trends and basic economics offer powerful counterarguments. With Obamacare still kicking in, there’s plenty of reason for optimism.

$13 bln dental combination looks a bit off-white

16 Sep 2015

Dentsply and Sirona have set what they call a merger of equals. The global providers of single-use supplies and dentistry equipment, respectively, are complementary. But investors don’t love the amalgam so far. Owners of the smaller and techier Sirona might ache for a premium.

Valeant pops risky $1 bln libido pill

20 Aug 2015

The acquisitive drug firm is buying Sprout, the maker of just-approved “female Viagra.” Valeant will have gotten a bargain if it can crank out billions in annual sales. Snag is, the drug isn’t very effective, it has bad side effects, and regulatory restrictions may crimp sales.

"Female Viagra"-maker slips the FDA a roofie

19 Aug 2015

U.S. regulators approved the first pill for increasing sexual desire in women. The drug had been rejected twice because it’s barely effective and carries severe adverse effects. The lesson for pharma firms: a public relations campaign successfully changed a watchdog’s mind.  

Mylan flaunts masterful M&A jujitsu

14 Aug 2015

The drugmaker deftly blocked Teva’s $40 bln offer with a uniquely Dutch poison pill and a bold move to disqualify the suitor’s lawyers. Now it’s exploiting Ireland’s odd takeover rules to put Perrigo in a $34 bln chokehold. Clever defensive tactics will be needed to evade Mylan.

Shire can’t easily pay more for Baxalta

14 Aug 2015

The pharma group’s all-stock $75 bln merger approach has been rejected by its rival. Shire’s bid relies on aggressive claims to boost revenue, which Baxalta disputes. Breakingviews’ model shows Shire chief Flemming Ornskov can’t dig much deeper without bold assumptions.

GE loans injection gives Capital One health boost

12 Aug 2015

The bank is buying the conglomerate’s $8.5 bln portfolio of medical loans. Using them to replace lower-yielding bonds on its books should provide an immediate fillip to earnings. As long as the healthcare industry keeps growing, the 6 pct premium CapOne is paying looks justified.

Obamacare side effect heals Wall Street

7 Aug 2015

For a president supposedly at odds with fat-cat dealmakers, Barack Obama is a generous benefactor. Since 2012, when the Supreme Court validated his Affordable Care Act, healthcare has dominated U.S. M&A fee generation, at nearly $6 bln. The rain-making isn’t over, either.

Shire M&A machine stumbles on $30 bln Baxalta bid

4 Aug 2015

The onetime Irish target for AbbVie is planning a mega-deal of its own. Unlike the previous combination, Shire’s Baxalta purchase has industrial logic as well as tax benefits. Shareholders, though, might have preferred being bought out to assuming all the risks of a takeover. 

Novartis spinoff is neat cure for Big Pharma ills

29 Jul 2015

The $275 bln Swiss pharma group is injecting three drugs-in-development into a new entity backed by UK investors. Venture capital markets can be better at valuing and nurturing small drugs than Big Pharma shareholders. With biotech markets hot, there’s room for copycat deals.

Teva exits Mylan mess with $40.5 bln Allergan deal

27 Jul 2015

The Israeli pharma firm has been locked in a bitter battle to take over the Dutch drugmaker. Now it has agreed to buy the generic business from Allergan. The swap makes sense. Friendly is far easier than hostile, and the Allergan businesses are just as attractive as Mylan. 

Breakdown: Watchdogs chew on health insurer deals

24 Jul 2015

Anthem and Cigna are the latest big U.S. providers to serve up a blockbuster merger. But they and their peers need to satisfy a slew of regulators before chowing down. Here’s a look at the agencies and the transactions officials may be asked to swallow in a concentrated industry.

Mylan is Stichting it to its shareholders

23 Jul 2015

The uniquely Dutch poison pill makes it likely that the drugmaker has seen off Teva’s $40 bln hostile bid. Mylan may now be able to seal a deal to buy smaller Perrigo. If not, Teva’s offer might re-emerge. Either way, though, investors have been deprived of a clear choice.

Anthem and Cigna may have a price but not a deal

23 Jul 2015

The U.S. health insurers are near a $48 bln union after talks stalled earlier. Strategic and financial logic add up, but swift completion and clear management structure tend to be a hallmark of successful mergers. A long regulatory review and leadership squabbles feature here.

U.S. medical device firms hop Obamacare deal train

22 Jul 2015

Insurers, drug distributors and hospitals are frantically tying the knot as the president’s healthcare reform forces them to do more with less. St. Jude’s $3.4 bln purchase of heart specialist Thoratec shows rising costs are making growth harder in the equipment sector, too.

Latest pharma roll-up leaves lots of room to grow

7 Jul 2015

Horizon’s $1.75 bln unsolicited offer for U.S. rival Depomed continues the sector’s M&A rave fueled by tax savings and cost cuts. The Irish bidder is a recent entrant on the scene, so its low debt load and small size means it can easily expand. That portends more deals ahead.