Medical devices

Novartis avoids danger with nuclear M&A option

30 Oct 2017

The Swiss drugmaker is paying $3.9 bln for France’s Advanced Accelerator, which uses radiation to fight tumours. The deal is at a hefty 47 pct premium, but it’s logical and ticks financial boxes. It won’t drive investors wild, but they don’t need to run for the shelters, either.

EU probe may be least of EssilorLuxottica problems

27 Sep 2017

Brussels is polishing its glasses for a close antitrust read of the $54 bln merger of Essilor and Luxottica. But the eyewear behemoths face other headaches, like customer defections and new competitor alliances. By the time the deal closes, its benefits could look fuzzy.

German-U.S. med kit deal requires flawless surgery

7 Aug 2017

Kidney dialysis group Fresenius Medical Care is forking out $2 bln in cash for loss-making rival NxStage. The German group enjoys a remarkably low cost of capital. But even if it delivers ambitious cost savings and the American group keeps getting better, returns will fall short.

Philips deal healthier for patients than investors

28 Jun 2017

The Dutch healthcare equipment maker is buying loss-making US rival Spectranetics for more than 6 times next year's revenue in a $2.2 bln deal. Ramping up expertise in treating cardiac disease makes strategic sense, but the high price adds unhealthy financial side-effects.

Chinese biotech IPO deserves potent price

2 Jun 2017

WuXi Biologics could raise over $500 mln in a hot Hong Kong debut. A value of up to 30 times 2018 earnings sounds high, especially given a novel business model. But earnings are soaring and the local bourse lacks exciting drug firms. Growth and scarcity is a powerful formula.  

Lackluster $24 bln medical merger better than none

24 Apr 2017

Becton Dickinson's deal for C.R. Bard involves cost cuts worth less than half the 25 pct premium. Like lawmakers, though, U.S. healthcare firms are stuck with Obamacare's pressures. Scale brings negotiating power needed to sell needles and catheters to consolidating hospitals.

Hadas: U.S. deaths are economic and social failure

29 Mar 2017

Americans are dying younger due to drugs, drink and suicide. The rise in such "deaths of despair" comes from the fatal interaction of a weak welfare system, inadequate healthcare and decaying communities. These national flaws also help explain the lack of a political response.

Psychedelic drugs enlighten $2.5 trillion problem

29 Dec 2016

That was the cost of mental illness in 2010, an expense set to double by 2030, says the World Economic Forum. Psilocybin, magic mushrooms' active ingredient, has alleviated suffering in clinical trials. Illicit stigma aside, high returns on investment could make it worth a trip.

Gene-sequencing tech leapfrogging its usefulness

11 Oct 2016

That's one way to view Illumina's sales shock, which singed $7 bln of investor wealth. Machines for mapping out human genomes are improving faster than researchers can figure out how to use them. For buyers with ideas on how to push testing in clinics this creates opportunity.

J&J’s corpulence defense weighs heavy

2 Jun 2016

The bulging healthcare conglomerate is swallowing hair-care firm Vogue for $3.3 bln in defiance of calls to break up. J&J’s $312 bln market value makes it a hard target for activists. Yet its obesity has created ailments from poor M&A digestion to mediocre shareholder returns.

How Theranos Hoovered up $9 bln of influence

27 Oct 2015

CEO Elizabeth Holmes persuaded a clutch of bigwigs like George Shultz to join her board, tapping the roster at Stanford’s world-improving think tank. Theranos’ headline valuation shot skywards. But the wise old men don’t seem to be helping now that things are looking shaky.

$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.

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.

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.

Medtronic-Covidien is blast from M&A advisory past

16 Jun 2014

A mega-merger can be an excuse to hire multiple Wall Street advisers, sometimes just by way of thanks for providing loans or other services. The two companies in Sunday’s $43 bln medical devices tie-up are using just one each. Bankers will be hoping the flashback doesn’t last.

Medtronic-Covidien deal is marriage of convenience

16 Jun 2014

The $42.9 bln takeover includes a near-$10 bln premium that exceeds the estimated value of synergies. Stents and sutures aren’t an obvious fit, and moving from Minneapolis to Dublin won’t cut Medtronic’s tax bill. Freeing up overseas cash is too shallow a reason to tie the knot.

Smith & Nephew jumps on a wounded rival

3 Feb 2014

Treating injured athletes is a faster-growing business than selling artificial joints to a greying world. So the UK medtech giant is paying $1.5 bln including cash for U.S.-listed ArthroCare. A share price premium of just 6 pct reflects the target’s own self-inflicted wounds.

Baxter’s $4 bln deal is curious deja vu

4 Dec 2012

The U.S. drugs company is buying dialysis specialist Gambro. Strategically and financially the Swedish target looks a decent fit, for instance soaking up some offshore cash. But Baxter largely exited the segment in 2005, and its record of errors ups the risk of getting back in.