Healthcare

Biotech-insurer connection looks wildly premature

23 Mar 2015

Early results for Biogen’s Alzheimer’s drug added $10 bln to its value on Friday. Now an analyst comment that it might cut long-term care payouts for Genworth has sent the insurer’s stock up 5 pct. Past failed treatments make that a step too far – and even a sign of a bubble.

Drugmaker IPO should ease any TPG anxiety

19 Mar 2015

The buyout firm may quadruple its investment – at least on paper – in Par Pharmaceutical, a generics maker it bought for $1.9 bln less than three years ago. The return delivers a useful lift as TPG raises a new $10 bln fund. It’s also good therapy for a dispiriting lawsuit.

Valeant’s $11 bln bid may have scored two knockouts

16 Mar 2015

By sweetening its offer for Salix, the acquisitive drugmaker now backed by hedgie Bill Ackman put rival suitor Endo on the mat. The extra cash and a balance sheet reeling from the Allergan deal leave the business model looking wobbly. Valeant may have just rung its own bell too.

Valeant’s mini-me turns into a hostile M&A rival

11 Mar 2015

The drugmaker’s stock has rocketed up as it has rolled over competitors, cut costs and preserved profit with a low offshore tax rate. Endo International, now led by Valeant’s ex-president, has copied the model in spades, trumping its rival’s offer for Salix with an $11 bln bid.

M&A optimism over Merck KGaA is about to be tested

3 Mar 2015

The chemical and drugmaker has become one of Germany’s hottest stocks, gaining 55 pct in a year. Solid revenue growth and a dividend hike for 2014 underscore the renewal. To keep investors onside, Merck must now smoothly integrate a $17 bln takeover, the biggest in its history.

Deal junkie Valeant shoots up on $10 bln fix

23 Feb 2015

The drugmaker’s pledge last year to focus on organic growth and debt reduction didn’t last long. Cost cuts and tax savings from buying Salix proved irresistible. What Valeant’s injecting isn’t clear. Salix’s numbers are fuzzy after it admitted pumping clients full of inventory.

Drugmakers unlikely candidates for next big short

11 Feb 2015

Kyle Bass, a hedge fund manager who bet successfully on a U.S. housing crash, is targeting pharma companies worth $450 bln. A new method of challenging patents gives him a tool. But it’s not clear how his firm, Hayman Capital, has a leg up on existing, aggressive generic firms.

Anthem investors don’t get cyber risks, either

5 Feb 2015

Data breaches at the likes of Target, Home Depot and Sony have put once-complacent managers on notice. But the small impact on the stock of the $37 bln No. 2 U.S. healthcare group after up to 80 mln records were compromised suggests shareholders are still not alert to the danger.

Pfizer’s generics injection lifts mood for breakup

5 Feb 2015

The pharmaceutical giant’s $15 billion purchase of Hospira gives it a shot at reversing a history of value-destroying acquisitions. The injectable drug maker’s strength in non-branded medications should fortify Pfizer’s generics unit – and clear the way for spinning it off.

AstraZeneca becomes more reliant on investor trust

5 Feb 2015

The UK pharma group’s 2014 results disappointed. That shows the challenge CEO Pascal Soriot faces reaching the double-digit growth he promised when seeing off Pfizer’s $118 bln bid. AZ’s full valuation, and maybe its independence, are vulnerable if there are more slips.

Prisoner’s dilemma costs Gilead investors $15 bln

4 Feb 2015

Its hep C drug helped the $145 bln biotech quadruple fourth-quarter earnings and plan for a big buyback. Gilead’s stock sank 10 pct, though, because it’s going to discount the treatment sharply this year. Cures fuel price wars because there’s no repeat business to worry about.

Modicare may add to big pharma’s Indian gripes

22 Jan 2015

The Indian prime minister plans to launch a universal healthcare scheme on a tight budget. That bodes ill for efforts to improve patent protection. Despite pressure from Barack Obama and big drugmakers, it will be tough to shake India’s addiction to cheap generic pharmaceuticals.

Dutch optician can pass IPO market test

12 Jan 2015

GrandVision, the world’s largest optical retailer, is planning to float. It is stable, cash-generative, and well placed to benefit from an ageing world. That augurs well for a deal which could raise about 1 bln euros. The payback in emerging markets looks further off, however.

Wearable tech will go from novelty to necessity

31 Dec 2014

Activity trackers like Jawbone and Fitbit gather vast quantities of deeply personal data. Consumers aren’t always keen to overshare. But healthcare and insurance companies are finding ways to make it worth their while. Geeky gadgets could soon become too useful to ignore.

Roche double blow increases dealmaking pressure

19 Dec 2014

The pharma group has suffered two big drug failures. The setback over Alzheimer’s is no shock—the disease has been a money loser for big pharma. A second knock in Roche’s core cancer franchise hurts more. The failures will increase pressure on Roche to deploy excess cash.

Rampaging animal spirits birth biotech unicorn

18 Dec 2014

The public offering of Juno Therapeutics presents an apt finale to the best year for biotech IPOs. It’s only a year old and revenue free, but its cancer fighting technology is hot. Juno’s $2 bln valuation shows capitalism’s ability to catalyze investors’ hopes and resources.

Merck gives in to M&A frenzy risk assessment

9 Dec 2014

Just hours after unveiling its $8.4 bln acquisition of Cubist, a judge invalidated patents owned by the antibiotics maker. Potential lost sales are reflected in the billions erased from Merck’s market value. The known liability was appraised through a rose-colored merger prism.

Pharma’s dying assets lack M&A remedy

5 Dec 2014

Both GlaxoSmithKline and Sanofi have scrapped sales of mature drugs. The motives differ, but both flops highlight the challenge of finding suitable owners for such assets. Other industries would spawn rollup vehicles. Here, buyers lack expertise, and sellers aren’t desperate yet.

Pharma market failure gets a charitable cure

19 Nov 2014

The Cystic Fibrosis Foundation helped fund a successful treatment for the deadly lung disease, stepping up when private investors wouldn’t. Its reward: $3.3 bln for rights to the new medication. So-called venture philanthropy could be the model for kick-starting drug development.

AstraZeneca struggles to advance value defence

18 Nov 2014

The UK pharma group fought Pfizer’s $120 bln bid in May by promising growth. It’s now reiterating punchy sales targets and casting oncology as a new growth driver. In fact, the Astra story has only inched forward. Its defence has been aided most by U.S. curbs on tax-driven M&A.