Pharmaceuticals

Mega-merger market set for last gasp

20 Dec 2016

Cheap debt and falling hurdle rates will keep bosses on the hunt. Border-spanning acquisitions are harder to square with trustbusters, however, and big targets less affordable as an M&A cycle ends. That makes space for smaller deals, which in any case tend to create more value.

KKR gets shot in arm from bumper Capsugel exit

15 Dec 2016

Selling the drug capsule group for $5.5 bln means the U.S. buyout group has tripled its money since buying from Pfizer in 2011. It has also done so without savaging Capsugel’s R&D budget. Acquirer Lonza gets vertical integration but will struggle to get the same kind of return.

Actelion looks like a lose-lose for Sanofi

14 Dec 2016

The French firm is mooted as a buyer for the Swiss biotech group after J&J walked away. The financial logic looks equally strained, and overpaying would smack of desperation about Sanofi's own business. With drug prices under pressure, pharma M&A will not get any more rational.

Biotech double defenestrates independence hopes

12 Dec 2016

The CEO and CFO of $30 bln Alexion have both left immediately. That's bad enough by itself. But the departures come in the midst of an investigation into sales improprieties. That, and a lack of transparency from the company, leaves Alexion open to a takeover.

Actelion could give J&J hypertension

25 Nov 2016

The U.S. baby lotion-maker is reportedly eyeing the $17 bln Swiss group Actelion, a specialist in blood pressure drugs. Given the latter's high price, J&J would need big cost cuts to make the deal work. Moreover, Actelion is fiercely independent, and faces mounting competition.

Eli Lilly’s $10 bln fail detects what ails market

23 Nov 2016

Given that nearly every Alzheimer's drug falters in clinical trials, it should be little surprise the latest one did, too. Though Lilly's stock got punished, humanitarian and financial reasons justify such R&D efforts. The investor overenthusiasm disease should be easier to cure.

U.S. Election Day is the new Friday-night dump

2 Nov 2016

Controversial companies such as Valeant, Viacom, SeaWorld and Mylan are releasing earnings on Nov. 8 - the day of the presidential poll - or Nov. 9. Good or bad news may sink with minimal media or investor attention as American eyes focus on the next occupant of the White House.

No cure for Big Pharma’s diabetes problem

28 Oct 2016

Sanofi and Novo Nordisk’s earnings from diabetes drugs are collapsing. Financial remedies are scant. Novo is cutting costs and scraping investment, while Sanofi is buying back shares and prowling for acquisitions. At least the latter’s stock is already cheap.

Bayer’s strong earnings can’t outweigh dismal deal

26 Oct 2016

The German chemical giant's quarterly results beat expectations for the third time running. Bayer's shares have been dragged down regardless by its overpriced $66 bln takeover of Monsanto. It would take fanciful improvements in performance to make good the $15 bln of lost value.

Foreigners give Chinese drug maker a healthy glow

24 Oct 2016

CR Pharma is raising $1.8 bln from its Hong Kong IPO. A holding company structure and the rising price of donkey hide, a key ingredient, justify a discount valuation to peers. But a respectable roster of big foreign investors underscores the healthy prognosis for the sector.

Samsung’s biotech bet undergoes first major trial

5 Oct 2016

As smartphone growth slows, Samsung heir Jay Y. Lee is targeting a nascent market for drugs made from living cells. Selling up to $2 bln of shares in the South Korean group's BioLogics unit will test investor appetite for a developing technology and an unfamiliar business model.

Bayer lowers Monsanto expectations even further

20 Sep 2016

The chemical giant raised a key profitability target, assuming it closes its $66 bln purchase of Monsanto. Yet it's below what analysts might expect based on the $1.5 billion in synergies Bayer has promised. Estimates are always slippery. In this case, the synergies might be too.

GSK tries out alternative medicine with new CEO

20 Sep 2016

It's a logical move to name consumer head Emma Walmsley as the drugmaker's new chief executive. Pharma companies can learn a lot from the efficient personal care sector. Critics may see a doubling down on GSK’s HIV-to-Horlicks model, without a fix to its weaker pharma business.

EpiPen probe may give Mylan allergic reaction

24 Aug 2016

Three U.S. senators are slamming the $24 bln drug firm for jacking up the cost of its anaphylaxis treatment more than fivefold since 2008. An investigation could limit Mylan's pricing power on the product that has provided much of its growth and spread to the firm's other drugs.

Novo Nordisk premium will survive drug wars

5 Aug 2016

The Danish pharma group's shares fell more than 8 percent after it lowered profit and sales guidance and warned of lower prices in the key U.S. insulin market. Such pressures won't abate. Still, in a growing market, Novo warrants a premium over peers. Just a less hefty one.