Pharmaceuticals

Corona Capital: Extended Stay, Victoria’s Secret

22 Apr 2020

Concise views on the pandemic’s corporate and financial fallout: Blackstone checks back into one of its favorite old haunts, hotel chain Extended Stay; while another private-equity shop, Sycamore, tries to dump its proposed investment in lingerie seller Victoria’s Secret.

Market’s remedy rally more rational than it sounds

17 Apr 2020

Drugmaker Gilead’s anecdotal success treating Covid-19 sent its stock and the broader market up. It’s not total fantasy – even small changes in the odds of society reopening ought to boost asset prices. The gain in Gilead’s own stock is harder to explain.

J&J shows safety is relative

14 Apr 2020

The $368 bln healthcare giant upped its dividend as increased demand for painkillers and Listerine helped first-quarter revenue rise 3%. But consumer-goods sales are likely to shrink, medical-device revenue is in free fall and litigation risk remains. J&J’s success won’t last.

Blackstone has remedy for drug R&D cash burn

13 Apr 2020

The private-equity firm is sinking $2 bln into Alnylam, including buying rights to future revenue from a drug still under regulatory review. It's a way to match Blackstone's bulging wallet with the biotech’s hefty costs while limiting exposure to volatile equity markets.

Corona Capital: Banking bonuses, Local TV M&A

30 Mar 2020

Concise views on the pandemic’s corporate and financial fallout: BBVA’s ditched bonuses pressure peers; local TV deal has more than one struggle.

Virus clarifies case for universal U.S. healthcare

25 Mar 2020

The debate in America tends to get bogged down in how to change the system, losing sight of why. Other developed-country governments guarantee basic medical care for everyone. The Covid-19 pandemic shows why the benefits transcend wealth, politics and geography.

Virus stimulus strains bloated U.S. balance sheet

5 Mar 2020

Congress approved an $8 bln plan to mitigate a potential outbreak. It’s a rounding error next to the hundreds of billions that may be needed to stem economic damage. Tax cuts and a spending jump had already pushed the deficit to $1 trln, reducing fiscal room to deal with crises.

Gilead’s $4.9 bln deal shows regular death goes on

2 Mar 2020

The $88 bln biotech company has the best antiviral bet against coronavirus; it’s also now buying cancer startup Forty Seven. Investors are focused on the former today, but the purchase at a hefty premium is a reminder that the fight against the grim reaper is a long-term affair.

New Reckitt Benckiser boss embarks on deep clean

27 Feb 2020

Laxman Narasimhan is making up for past neglect at the Dettol maker with a major overhaul. The pain of a 5 bln pound write-down on baby-food group Mead Johnson is only partly soothed by ambitious medium-term growth goals. Splitting the health and hygiene units will have to wait.

AstraZeneca headache goes way beyond coronavirus

14 Feb 2020

China is the drugmaker’s second biggest market by sales, making the outbreak a bigger issue than for peers. But revenue there disappointed anyway, as did overall cancer drug sales. Pharma’s competitive pressures are making it harder for CEO Pascal Soriot to please investors.

Epidemics are tough to turn into profit

12 Feb 2020

The new coronavirus has the world on edge. Healthcare companies are ramping up production of test kits and researching treatments and vaccines. Yet past events like SARS show slow R&D, high production costs and political pressure on pricing often add up to disappointing returns.

Merck spinoff pits cash now vs. excitement later

5 Feb 2020

The $217 bln U.S. drugmaker joins Pfizer and GSK with plans to separate its steady from fast-growing products. The former’s cash flow will appeal to investors seeking stability. The latter will have Keytruda, its monster cancer drug. But stodgier businesses can be the better bet.

Bayer settlement only slightly eases Monsanto pain

24 Jan 2020

The German chemicals group may spend $10 billion compensating alleged cancer victims of its acquisition’s Roundup weed killer. That would be better than CEO Werner Baumann’s worst fears. But it barely makes his ill-starred $66 billion deal look any better.

A health craze for 2020: Chinese medicine

2 Jan 2019

A locally-developed cancer therapy from the People's Republic has won U.S. approval for the first time. For pharmaceutical giants, discovering a made-in-China blockbuster drug may be within reach. Cross-border deals will follow, as will some unexpected side effects.

Sanofi growth cure comes with M&A health warning

10 Dec 2019

The 108 bln euro drugmaker is cutting costs, exiting areas like diabetes, and hinting it might sell assets. It’s a bold but logical move to boost the group’s flagging sales. New CEO Paul Hudson’s main other task is to show he can shake off Sanofi’s mixed dealmaking track record.

Huge biotech M&A premiums narrow perception gap

3 Dec 2019

Astellas’ $3 bln deal for Audentes is the fifth 100%-plus premium in the sector this year. Market pessimism is making targets cheap, notably in speculative areas like gene therapy. But buyers are having to pay up to convince sellers they’re not surrendering at fire-sale prices.

Novartis sees too much good in bad cholesterol

25 Nov 2019

The Swiss drugs giant is buying The Medicines Co. and its artery-clearing drug inclisiran for $9.7 bln, or a fat 41% premium. But the sector is crowded and Novartis must wait years for a decent return. Governments and insurers may also tire of paying to treat lifestyle diseases.

Thermo Fisher diagnoses rare $10 bln land grab

14 Nov 2019

It’s circling Qiagen, a month after the diagnostics firm changed strategy and ditched its long-time leader. The would-be acquirer may spy an opportunity to snap up its rival while its defenses are weakened. The risk is that outweighs the pursuit of good returns.

Walgreens LBO could bring the band back together

12 Nov 2019

Buyout shop KKR and drug chain boss Stefano Pessina achieved the improbable in buying retailer Boots and merging it with the U.S. drug store. The fortunes they made may tempt them to an $87 bln buyout of Walgreens. Once again, they’ll need luck, partners and forgiving markets.

Biotech upstarts will be Big Pharma’s China tonic

6 Nov 2019

AstraZeneca is launching a $1 bln healthcare fund in the People's Republic. A wealthier, older society promises huge growth, but rising costs mean Beijing is pushing drugmakers to lower prices. Investing in local discoveries and exporting them globally could be a smart remedy.