Pharmaceuticals

Bigger and louder choirs create M&A dissonance

29 Mar 2023

After Ritchie Bros struck its $7 bln deal to buy IAA, at least 10 shareholders, including Starboard and lesser-known Discerene, sang out about the transaction. Uncommon and first-time vocalists are on the rise. Expect bosses and boards to develop their own new song and dance.

Icahn reacts audaciously to Illumina’s audacity

14 Mar 2023

The mouthy billionaire wants three board seats at the $36 bln biotech company and for it to spin off Grail. Boss Francis deSouza overpaid to buy back the cancer detection business and took on too much regulatory risk. Some oversight is warranted, but a 1% stake only buys so much.

Capital Calls: Eli Lilly

1 Mar 2023

Concise views on global finance: The drugmaker is reducing the list price on its insulins by 70%. Problem is, few actually pay anything close to the sticker price. Insurers will probably prefer to use insulins from rivals, assuming they can keep negotiating big discounts.

Cancer drug sale would be high hop on hope

27 Feb 2023

Pfizer is sizing up oncology specialist Seagen after talks with Merck stalled last year. While Big Pharma needs therapies to sell, the probable price of $40 bln or so is a big barrier. At that level a buyer would earn perhaps a 2% return on investment, even with hefty savings.

Returning pharma CEO has one prescription: M&A

16 Feb 2023

Brent Saunders ran three major drugmakers, and ultimately sold them all – one of them twice. He’s back in the corner office at $7 bln Bausch + Lomb again. The company’s earlier wheeling and dealing complicates matters, but history suggests finding a new owner is a likely outcome.

Capital Calls: U.S. jobs, Crypto data-miners

3 Feb 2023

Concise views on global finance: Rapid hiring in America has bad and worse consequences; blockchain analytics company Chainalysis is cutting staff, but those tracking crypto crimes, including governments, could use more of its services.

Liberated GSK is still searching for booster shot

1 Feb 2023

The $72 bln drugmaker spun off its consumer unit last year to focus on prescription medicines. But it now trades at a discount to European rivals. To close the gap, CEO Emma Walmsley needs to deliver new drugs, fend off Pfizer’s respiratory vaccine, and prove her M&A skills.

Pfizer goes back to the pharma meat-grinder

31 Jan 2023

Its warning that revenue will fall by one-third this year is a return to pre-pandemic doldrums, where pharma companies wrestled with the meager, declining returns of developing new drugs. The best shot for Pfizer and peers is to focus new technology on hard-to-treat diseases.

UK reaches limits of drug penny-pinching

19 Jan 2023

AbbVie and Eli Lilly pulled out of Britain’s pharmaceutical pricing agreement, due to shrinking returns. The UK’s single health service helps it play hardball with Big Pharma. Yet drug research is collapsing, hurting jobs and citizens’ health. There’s a case for spending more.

Bayer’s rude health lays better path for breakup

11 Jan 2023

Activists including Jeff Ubben are piling into the $58 bln German seed and drug maker. Its cheap share price, thanks to the dire Monsanto deal, has for years dangled the promise of a lucrative carve-up. Improvements in the pharma unit and a CEO change make it more likely now.

Capital Calls: AstraZeneca

9 Jan 2023

Concise views on global finance: The drug giant is to pay up to $1.8 bln for U.S. group CinCor Pharma to beef up its kidney and heart businesses.

J&J breaks with legal and valuation uncertainty

5 Jan 2023

The $470 bln healthcare giant is jettisoning brands like Listerine and Band-Aid while also putting liabilities related to Tylenol into the new group. The fluctuating valuation of a similar GSK spinoff last year shows the difficulty in valuing potential court settlements.

Flu-remedy shortages sap investor misperceptions

21 Dec 2022

Drugmaker GSK spun off $35 bln Haleon in July with legal issues, high debt and low expectations, but strong demand for children’s Advil and other medicines are providing a salve. Similar splits in media, oil and tech have defied the odds, too. Contrarian bets can be therapeutic.

Big Pharma will find right formula for M&A binge

20 Dec 2022

Pfizer, AstraZeneca and peers have nearly half a trillion dollars of firepower to deploy on deals in 2023. Looming loss of exclusivity on key drugs gives them little choice. Luckily targets like Ascendis or Incyte are trading on depressed valuations, and less likely to resist.

Takeda’s bold skin care deal shows fresh M&A itch

14 Dec 2022

The Japanese pharma giant is paying at least $4 bln for a psoriasis treatment still in trial, its biggest transaction since splashing out $62 bln on Shire in 2019. There’s a risk the drug fails, but Takeda has cash and needs new money spinners. More deals may follow.

Amgen’s $28 bln deal is a reasonable gamble

12 Dec 2022

The $150 bln biotech company is buying smaller peer Horizon after the target’s big drug suddenly stalled. Horizon’s shares look expensive if growth remains derailed. But there’s a good chance, based on past deals, it will resume. If so, Amgen looks calculated and opportunistic.

Sinopharm’s second Chinese herb shot is potent

8 Dec 2022

The pharma giant may revive a $4 bln buyout of its Hong Kong-listed traditional medicine arm. Valuations for rivals on the mainland have risen in the two years since the last try. A growing disconnect between the markets allows for a bigger premium and a lucrative relisting.

Big Pharma’s heartburn win is a valuation salve

7 Dec 2022

GSK, Haleon and Sanofi’s combined worth rose $14 bln after a U.S. judge dismissed claims that a drug causes cancer. It frees up cash for new research and deals. The victory also helps lay to rest the ghost of Bayer’s Roundup legal thwack, which has haunted the sector since 2020.

Big Pharma will muscle in on obesity gold rush

28 Nov 2022

Novo Nordisk and Eli Lilly’s weight loss drugs are swelling their valuations, and give them a lead in a potentially $50 bln market. Yet rivals like Pfizer are not far behind, and others can snap up biotechs like Altimmune. An increasingly crowded sector may lead to lower returns.

Capital Calls: Roche’s risky big drug bets

14 Nov 2022

Concise views on global finance: Shares in the Swiss drugmaker fell 4% after a treatment for dementia produced disappointing results in a late-stage trial, reminding investors of the downsides of pursuing potential blockbusters.