Pharmaceuticals

Roche faces hard climb back from cancer setback

6 Jun 2017

A trial showed combining a new drug with the Swiss group’s Herceptin gave only a slight benefit to patients. That will make it harder to protect the blockbuster’s $7 bln of revenue from generic competitors. Roche could buy back shares, or rival drugmakers. Neither is cheap.

Amazon is prescription for pharmacy woes

17 May 2017

The internet retailer has set its sights on the $300 bln business of selling drugs to U.S. customers. Regulation and delivery concerns are barriers. Yet these, and the inefficiency of U.S. healthcare, also promise lucrative earnings for a company happy with razor-thin margins.

Thermo Fisher experiment starts with pricey deal

15 May 2017

The maker of scientific instruments is paying $5.2 bln to buy Patheon, which produces drugs and the chemicals used in them. Cost savings don’t come close to covering the premium. Its quarry's industry may be ready for consolidation, but Thermo also has a lot to learn about it.

Bayer exemplifies Germany’s too-powerful boards

28 Apr 2017

A big institution is unhappy the chemicals group didn’t give it a say on its value-burning $66 bln purchase of Monsanto. German companies can do deals without putting them to a vote and often have carte blanche to raise capital. The wound is self-inflicted and possibly avoidable.

Pharma deal offers new buyout double-dip trial

27 Apr 2017

Carlyle and Hellman & Friedman are swapping stakes in drug tester PPD while increasing its paper value 2.5 times, to $9 bln. The firm’s growth may justify the valuation but shuffling buyouts is opaque and can harm returns. As fund-to-fund deals grow, this risk will loom larger.

AstraZeneca reaches point of maximum pain

27 Apr 2017

The drugmaker's revenue fell 10 percent in the first quarter, despite a boost from non-recurring sales. Losing patents has hurt Astra's pricing power. Winning approval for new drugs would help boss Pascal Soriot rebuild. Investors are not fully factoring in that possibility.

Fresenius bets $4.8 bln on post-Trump drug sector

25 Apr 2017

The German healthcare group’s bid for Akorn makes sense. The U.S. drugmaker’s high-margin business has little overlap and a full product pipeline. It is paying a 35 pct premium but Fresenius needs few synergies to meet its cost of capital. Politics may be the fly in the ointment.

JPMorgan’s $100 bln deal cash may have few takers

19 Apr 2017

The bank's global M&A boss dangled the audacious notion that capital markets could fully finance a 12-figure takeover. He didn't suggest such a transaction was in the works, though, and there aren't many plausible targets. One theoretical pairing could be J&J buying Abbott.

Cardinal sings out two more drug warnings

18 Apr 2017

The U.S. pill distributor said for the third time since October that falling prices would hurt profit. Cardinal Health underscored the hard times ahead by paying $6 bln for Medtronic's medical-supplies unit to diversify. Other links in the pharmaceuticals chain will suffer, too.

Alere discount diagnoses limits of deal desertion

17 Apr 2017

The U.S. medical-test company is selling for 9 pct less than first agreed. Buyer Abbott had threatened to walk away after Alere's billing practices and accounting came under fire. To settle such a good MAC test case suggests the M&A escape clauses are merely negotiating tools.

Pharma offers rare tonic for private equity ills

10 Apr 2017

Bain and Cinven paid 5.3 bln euros, a 49 pct premium, for drugmaker Stada. They could make a decent return managing Stada better and growing it, not just borrowing. That is exactly what private equity is for. Yet such targets are rare, and buyout firms’ war chests are brimful.

Flu exposes U.S. folly in weighing fear and risk

3 Apr 2017

Americans are 1,000 times more likely to die from this common illness than terrorism. The current, and worst, bird-flu outbreak in China means the imbalance is even higher. Washington's decision to spend so much more on homeland security than preventing disease is misguided.

Reckitt is smart to go easy on the sauce

3 Apr 2017

The UK consumer-goods group may sell the division that makes French’s mustard for around $3 bln. Cashing out would take the heat out of the company’s debt-financed $17 bln bet on Mead Johnson – even if it seems odd to sell a business that’s growing fast and highly profitable.

Nominee’s industry ties risk side effects for FDA

29 Mar 2017

President Trump pledged to close the revolving door, yet FDA nominee Scott Gottlieb is taking his second whirl. Experience in government and industry is valuable, but his potential conflicts with pharma firms may hamper the agency. Recusal isn’t a prescription for effectiveness.

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.

Glaxo boss pay cut is a false economy

15 Mar 2017

The pharmaceutical group will pay new Chief Executive Emma Walmsley a quarter less than predecessor Andrew Witty, on account of her inexperience. Laudably, GSK was responding to shareholder pressure. Yet the cost of inexperience could easily outweigh the salary savings.

Drugmakers pose Brexit Britain withdrawal risk

3 Mar 2017

Pharma groups aren’t publicly threatening to pull staff out of the UK. But they could. Britain is a laggard in healthcare investment, and Brexit gives them negotiating power - especially after Prime Minister Theresa May’s gushing endorsement of the industry.

Allergan adds ice and a slice to M&A cocktail

13 Feb 2017

The drug company is paying $2.5 bln for Zeltiq and its diet-avoiding, fat-freezing tech. It sounds a wackier play than the dozen deals Allergan struck last year. But vain customers pay cold cash for the treatment, making it less speculative than other deals, like gene therapy.

Bidding war over Stada will be far from generic

13 Feb 2017

The German pharma company has two takeover offers, including one from private equity firm Cinven. Cutting costs or breaking up the group could create value. However, a new management team has yet to tackle low growth. Potential bidders will be loath to pay too big a premium.

GSK CEO leaves successor with scope for encore

8 Feb 2017

Departing chief Andrew Witty's final results beat expectations. He steered the drug giant through scandal and patent losses, but did smart deals, and created value. His vision of a diversified group is still unfinished, though, leaving successor Emma Walmsley plenty to do.