Healthcare

Diabetes wars a taste of things to come for pharma

10 Nov 2014

Obamacare and healthy competition are to blame for Sanofi’s problems in the insulin market. But copycat “biosimilar” drugs will disrupt other pharmaceutical markets. These new-style generics could create big problems for some substantial firms, including Amgen and AbbVie.

LabCorp deal tests positive for value destruction

3 Nov 2014

The firm that checks patients’ blood is paying $6.1 bln for clinical trial outsourcer Covance. The strategic logic is hazy. Shareholders’ financial diagnosis is damning, too. They swabbed some $700 mln off LabCorp as cost cuts fell far short of the 32 pct premium paid.

Sanofi board chaos risks derailing recovery

29 Oct 2014

The French pharma group has dumped its chief executive. Chris Viehbacher’s position may have been untenable but his exit hurts Sanofi at a fragile time. Chairman Serge Weinberg will temporarily take the CEO mantle. He needs to act fast to stabilise the governance.

Sanofi creates toxic combination for investors

28 Oct 2014

The French drugmaker’s shares plunged after it said sales growth in diabetes drugs would stall next year. This is a vital business and the surprise slowdown is hard to decode. A reported boardroom rift just adds uncertainty. Sanofi needs to rebuild shareholder confidence.

Mega Medibank IPO sets tone for Aussie sell-off

23 Oct 2014

A valuation of up to $4.8 bln for the state-owned private health insurer rests on the potential for cutting costs. But not being too greedy now will make it easier to flog some of the huge pipeline of Australian assets lined up for privatisation to stock market investors.

GSK’s deal-making days may just be starting

22 Oct 2014

The struggling pharma group is mulling an IPO of its HIV unit, which would go straight into the FTSE-100. It’s also holding next year’s dividend flat. The extra financial flexibility is welcome. But there’s also scope for a more radical strategy to realise value from disposals.

CVS smokes policy could trip antitrust alarms

21 Oct 2014

The U.S. pharmacy chain’s benefits arm may charge customers extra for using drugstores that, unlike CVS, sell cigarettes. That’s reminiscent of anti-competitive tying that got Microsoft in trouble. The cases differ, but concerns about market power make the company worth watching.

Rob Cox: Fragility bigger worry than volatility

21 Oct 2014

Recent rollercoaster markets are a symptom of a more concerning malady. They reflect the shock accompanying recognition that widely accepted assumptions about everything from monetary policy to geopolitics, and even the state of global health, are dangerously flimsy.

Rolls-Royce enters new era of uncertainty

17 Oct 2014

A profit warning has sent the UK engineer’s shares down 8 pct. Russian sanctions and the weak world economy are hurting. Cost cuts and new medium-term guidance show Rolls is trying to soften the blow. But investors may discount the company’s forecasting powers.

Megadeals like AbbVie/Shire invite arbitragedy

16 Oct 2014

Doubts over the $55 bln takeover have hurt Paulson, Elliott and other hedge funds. This caps a dismal half-decade for merger arbitrage. Bids have been scarce and spreads narrow. And the biggest, most investable deals often come with the worst political and regulatory pitfalls.

AbbVie U-turn shows Shire was mostly about tax

15 Oct 2014

The American group has cooled on a $55 bln bid for its UK-listed peer. The change of heart was prompted by U.S. opposition to “inversions.” That shows how much, despite AbbVie’s earlier protests, this deal was driven by tax. A recut takeover looks unlikely.

Guest view: When Ebola comes to your neighborhood

14 Oct 2014

A former Breakingviews columnist gives an account of what it’s like to find out the latest international health crisis patient lives down the road. After all the claims of American, and Texan, exceptionalism it’s a wake-up call for all developed economies to heed.

Ebola shows dangers, and power, of globalisation

10 Oct 2014

The spread of the deadly disease is a symptom of an interconnected yet hugely unequal global economy. At least there is enough solidarity, and enough at stake for the rich world, for belated help to reach the poor countries at the centre of the outbreak.     

Allergan takeover trials reach Phase III

8 Oct 2014

The $52 bln acquisition attempt began with Valeant’s controversial experiment involving activist Bill Ackman. The botox maker rejected that hypothesis, but a sweeter bid and rival Actavis may soon be added to the mix. Approval of some kind is now in the offing.

Tax clampdown could deter half-baked pharma M&A

23 Sep 2014

The U.S. attack on companies relocating to avoid taxes will calm pharma’s M&A binge. Deals like AbbVie’s purchase of Shire may survive on strategic logic. Pure tax-driven combinations, like Mylan/Abbott, look tricky. That lessens AstraZeneca’s vulnerability to a bid from Pfizer.

Merck’s mega-deal leaves pharma in need of a fix

22 Sep 2014

The German drugs and chemicals maker will buy U.S. life-science group Sigma-Aldrich for $17 bln. The deal defies expectations that Merck would bulk up in pharmaceuticals. It makes strategic sense, and isn’t too expensive. But the humdrum pharma unit is left in need of repair. 

GSK graft case raises risk for executives in China

19 Sep 2014

The drugmaker is paying a 297 mln stg fine for bribing non-government officials in China. That sets a floor for penalties in future probes. But the suspended sentences for five executives also send a warning that pain in such cases falls on individuals just as much as companies.

Bayer’s plastic float sows seeds for one more sale

18 Sep 2014

Investors added $5 bln to the German blue-chip’s market cap after it unveiled plans to float its capital-intensive MaterialScience unit. Once again, markets are rewarding sharper focus. A logical follow-up would be to quit agrochemicals, leaving a pure healthcare business.

Edward Hadas: A holistic economics of healthcare

10 Sep 2014

A UK report suggests merging medical and other welfare programmes for the critically ill. The lessons are global. Recognising that poor health is often just one part of life’s troubles would bring better care. The greatest challenge is to make that care less bureaucratic.

Google finally learns from healthcare hiccups

4 Sep 2014

Costly run-ins with U.S. regulators have taught the internet giant that drugs and biotech can be more complicated than search. Now it’s partnering with pharma firms and others that know the legal terrain. That allows Google to disrupt while avoiding bureaucratic minefields.