Pharmaceuticals

Global drug firms cash in on richer, older Chinese

4 Nov 2019

Pharmaceutical groups are racking up impressive growth in the world’s second-biggest market. Merck’s China sales increased 84% in the third quarter from a year earlier. Demographic forces and easier approvals outweigh forced price cuts. But domestic rivals will soon emerge.

Amgen pops $2.7 bln dose of risky Chinese medicine

1 Nov 2019

The pharma giant is paying a 36% premium for a fifth of biotech group BeiGene. That feels rich for a pre-profit upstart that just fought off a short-seller attack. But the partnership promises the American company quick access to China’s massive cancer market at a critical time.

Biogen gives investors dubious $16 bln treat

22 Oct 2019

The biotech giant’s value leapt up to 40% after an Alzheimer’s treatment thought left for dead showed signs of life. The trick is to convince watchdogs to ignore the trials’ mixed results and the failure of similar drugs. But more tests, if not a return to the grave, are likely.

Reckitt Benckiser suffers from deal indigestion

22 Oct 2019

The $54 bln maker of Gaviscon antacid is still having trouble absorbing its 2017 purchase of baby food maker Mead Johnson, says outgoing CFO Adrian Hennah. The result is a second cut in the 2019 sales target. The recognition is welcome, but a full recovery may require more pain.

Opioid crisis pile-on reaches legal critical mass

17 Oct 2019

The imminent start of a key trial has precipitated $50 billion of combined settlement offers from U.S. companies. Drugmakers and distributors prefer one-off payouts to open-ended uncertainty, while localities want cash as soon as possible. That’s a recipe for deals.

Third China Biologic buyout bid holds little charm

19 Sep 2019

CITIC is back with a new group trying again to take the plasma product maker private. The latest $4.6 bln offer is only 2% sweeter than a rival one from about a year ago, even though business has significantly improved. There are plenty of reasons for shareholders to be wary.

Japan drug firm bets $3 bln on castoffs and hype

6 Sep 2019

Sumitomo Dainippon’s growth has stalled and its pipeline is bare. It’s paying a lofty price for pieces of Roivant Sciences, which has scooped up dozens of compounds from Big Pharma but has yet to produce a marketed drug. This dream-chasing is unlikely to have a happy ending.

Opioid settlements are best sent to rehab

4 Sep 2019

Local governments may win $100 bln from drug firms over an epidemic costing society $500 bln a year. That’s akin to tobacco’s giant payments, most of which disappeared into budgets. Yet drug treatment generates sevenfold returns. Localities can’t afford to waste this windfall.

Simple math suggests huge opioid hit for pharma

27 Aug 2019

Investors boosted Johnson & Johnson’s stock after an Oklahoma judge ordered the drugmaker to pay $572 mln for its part in fomenting addiction to painkillers. Yet the state represents only about 1% of Americans and this is just one of a torrent of cases. Optimism looks misplaced.

Bristol-Myers passes $74 bln deal’s first big exam

26 Aug 2019

The drugmaker is stretching to buy ​rival Celgene. To smooth U.S. antitrust review, it put its target’s blockbuster psoriasis treatment on the market. Amgen has won that prize, for an unexpectedly rich $13 bln. That’s a boost for Bristol-Myers’ deal rationale – and its timing.

Kirin’s Japanese makeover is only half pretty

7 Aug 2019

The Japanese brewer is buying 30% of cosmetics and kale juice maker Fancl for $1.2 bln. Diversifying away from booze makes sense; rivals are doing it too. But paying a multiple of almost 40 times earnings, over twice the buyer’s own, for a minority stake is not a good look.

British drug group can’t even give away opioids

6 Aug 2019

Mallinckrodt suspended a plan to spin off its painkiller business to shareholders. It was a too-transparent attempt to shield itself against legal liabilities from thousands of lawsuits. With falling sales, hefty debt, and a potentially big settlement looming, its future is grim.

Pfizer’s old-drug disposal merits a warning

29 Jul 2019

The $240 bln pharma outfit is spinning its off-patent arm and merging it with Mylan. Combining brands like Lipitor and Viagra with EpiPen creates scale but generic price pressure makes for a poor financial prognosis. Pfizer at least gets $12 bln to spend on innovative new drugs.

Gilead finds shrewd $5.1 bln salve to biotech risk

15 Jul 2019

The $86 bln U.S. outfit hopes to harvest multiple therapies by injecting cash into rival Galapagos. Gilead almost doubles its stake, limiting its downside exposure, and pledges to keep the Belgian firm independent. History suggests it’s a smart way to create drugs and wealth.

American M&A makes excess great again

28 Jun 2019

U.S. deals jumped 19% in the first half even as activity ebbed in Europe and Asia. Topping the list are pricey purchases by AbbVie, Bristol-Myers and Occidental, plus Raytheon’s questionable merger with United Technologies. Most buyers’ owners will regret their CEOs’ ambitions.

U.S. healthcare reform ideas are too single-minded

27 Jun 2019

Americans are dissatisfied with the only rich-world system that isn’t universal. Democratic presidential candidates and others tend to fixate on either nudging the status quo or so-called “Medicare for all.” Other nations actually offer more varied examples – all costing less.

Pushy dealmakers ignore their best M&A advisers

26 Jun 2019

AbbVie and Occidental have structured huge acquisitions so shareholders don’t get a vote. Research suggests that when owners get a say, as happens more often in the UK, it can save a lot of scorched value. Bypassing them means acquisitive CEOs are losing a valuable sanity check.

Aging AbbVie turns to ugly $63 bln Botox remedy

25 Jun 2019

The drug maker’s Humira accounts for more than half its sales but may soon face competition. Buying Botox maker Allergan at a 45% premium looks like an excessively expensive and temporary face-lift. AbbVie’s money and time could be better spent on more invigorating targets.

Bristol-Myers drug sale tests $74 bln Celgene deal

24 Jun 2019

U.S. trustbusters have butted in once again, forcing the divestiture of a lucrative treatment. Bristol-Myers could have off-loaded its own nascent drug. Instead it may be hoping for a big price. That would support the idea that Celgene was undervalued, but it’s a riskier path.

The Exchange: John Delaney

17 Jun 2019

The first Democrat to bid for 2020’s presidential election has a pitch rarely heard in today’s political slugfest: that Democrats and Republicans can get along. Despite being a peacemaker, the former Maryland congressman has some punchy views on China, Big Tech and drug prices.