Pharmaceuticals

Elliott tries curing $25 bln biotech’s independence

8 Dec 2017

Alexion prospered selling niche drugs at stratospheric prices, until hit by a botched deal, sales improprieties and a thin pipeline. Replacing its CEO hasn’t helped and the stock is nearly half its peak. The activist’s push to shape up or sell is just what the doctor ordered.

Walgreens gets in early on healthy growth in China

7 Dec 2017

The U.S. chain is paying $416 mln for 40 pct of peer GuoDa. A sensible shake-up of drug distribution and sales by Beijing is spurring consolidation and giving pharmacies a stronger hand. This deal gives Walgreens market insight and could be a springboard for more investment.

Middling performance nets $500 mln for Aetna CEO

5 Dec 2017

Mark Bertolini’s payday from selling the insurer to drugstore chain CVS stems largely from steady success and not selling shares amassed over the years. Yet Aetna’s performance is nothing special compared to peers. Genius is easy to find when there’s a heavy wind behind a sector.

Consumer groups’ health drive comes at a cost

4 Dec 2017

Germany’s Merck has invited bids for its $4.8 billion Seven Seas vitamins unit. With Pfizer also selling its over-the-counter business, Nestlé and rival consumer giants see opportunities to use their sharper marketing skills. But the health craze comes with pumped-up valuations.

CVS deal reveals high cost of Amazon defense

3 Dec 2017

At $77 bln, the U.S. drugstore chain is paying over the odds to buy insurer Aetna. Identified savings cover only a third of the premium. In time, sending more patients to CVS clinics could lift profit. The plan, however, is more apt to simply stop existing customers from leaving.

Activist lays multiple chips on silicon strategy

21 Nov 2017

In its latest semiconductor play, activist Starboard is seeking to push Israel’s Mellanox into a deal. It also owns a chunk of Marvell, a potential buyer whose prior approach was rebuffed. With technology and economics driving rapid consolidation, it makes sense to spread bets.

China’s medical reform is pain for foreign pharma

15 Nov 2017

Shanghai Pharmaceuticals agreed to buy the China drugs-distribution business of Cardinal Health for $557 million. It looks like a reasonable deal for both sides. It also highlights how even well-meaning medical reforms could prompt some foreign firms to look for the exits.

Aetna lays out its insurance value for CVS

31 Oct 2017

Revenue at the $56 billion health-coverage firm fell 5 pct last quarter, partly from dumping some Obamacare policies. But profit jumped 48 pct. That offers alluring protection for CVS, whose pharmacy and drug-benefit business is threatened by rising competition and transparency.

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.

Aetna bid is a defensive prescription for CVS

26 Oct 2017

The drugstore and pharmacy-benefit company’s $66 bln offer for the health insurer should generate some savings. More important, it could help the firm resist Amazon’s entry into drug distribution, and the unpleasant side effects of transparency and low margins that may follow.

Celgene shows biotechs going the way of Big Pharma

26 Oct 2017

Some $30 bln of Celgene’s market value has vaporized in recent days after it admitted it bought a dud asset and axed $1-2 bln of revenue from its long-term forecast. The combination of an insufficiently productive pipeline and unreliable M&A is familiar to big drugmakers.

GSK’s new CEO held hostage by dividend cult

26 Oct 2017

The British pharmaceutical company’s market value slid by 6 bln pounds after Emma Walmsley suggested big deals and dividends might not be compatible. Being flexible is perfectly rational – unlike investors craving for high payouts at the potential expense of growth.

Animal-health spinoff may be just the Rx for Lilly

24 Oct 2017

The $90 bln outfit is weighing the sale or float of its pet and livestock drug business. Lofty valuations make it tempting to raise cash when the firm’s core pharma business has pipeline stumbles. But FDA approval for its arthritis treatment is the real prescription investors seek.

Novartis gets brief respite from problem children

24 Oct 2017

The Swiss drugmaker’s troubled eyecare unit performed better in the third quarter, reducing pressure for a quick sale. Its generic business still faces challenges despite beating forecasts. The group’s devotion to its stake in rival Roche, however, remains hard to justify.

Revamped Reckitt has yet to clean up its act

18 Oct 2017

A restructuring is eclipsing the Dettol-to-Durex maker’s poor third quarter results. Parking brands that are more exposed to competition in a separate unit is smart but makes the company costlier to run. Nor does that address the sales problems caused by shifting consumer habits.

Investors choke on generic-drug deal complexity

17 Oct 2017

The merger of Amneal with Impax, worth some $9 bln in combined enterprise value, brings scale, savings and a bigger business for a respected CEO. But the larger firm is private, its owners are selling down, and there’s a wacky tax element. No wonder Impax owners aren’t loving it.

Allergan’s latest drug wheeze has bad side-effects

16 Oct 2017

The firm’s stock fell 5 pct after a judge invalidated a key medication’s intellectual property and said using a Native American tribe to protect the patents was a “ploy.” Allergan’s plan was too clever by half. With President Trump on the warpath, it does the industry no favors.

BASF plants fertile crop from Bayer’s blighted M&A

13 Oct 2017

The German chemicals group will pay 5.9 bln euros for a seeds business that Bayer must sell to clinch a takeover of Monsanto. A pledge to keep staff means few cost savings, but the deal should work in time. BASF shareholders will reap a better harvest by eschewing mega-mergers.

Pharma firms gloss over hurricanes’ effects

11 Oct 2017

About 10 pct of drugs consumed by Americans are made in Puerto Rico. Companies from AbbVie to Zimmer state problems are manageable. Yet the FDA is warning of possible shortages - and intervening daily to ensure factories have fuel and oxygen to stay open. Earnings may be hit.

Syngenta puts Beijing’s unspoken promises to test

10 Oct 2017

The Swiss seed company’s Chinese parent and its state backers disagree over whether they stand behind its legal bills. It’s a dynamic found across China’s financial system: implicit guarantees are common, and rarely tested. The government has good reason to keep things ambiguous.