Pharmaceuticals

CSL’s Swiss drug punt looks like a bad trip

2 Dec 2021

The $99 bln Aussie jab maker is in talks to buy iron-deficiency specialist Vifor for around $7 bln. CEO Paul Perreault has a track record of strong growth and winning M&A. The prospect of subpar returns and a looming patent expiry suggest his golden touch is losing its lustre.

Pharmacy bidding war stands to get more feverish

2 Dec 2021

Aussie supermarket chain Woolworths has offered 13% extra to buy Priceline owner API over an agreed deal with Wesfarmers. The premium now stands at a whopping 53%. Deep-pocketed buyers, a frenzied M&A market and the implied returns are a prescription for additional sweeteners.

Vaccinating the world is a worthy but elusive goal

1 Dec 2021

Ensuring all rich and poor countries are fully jabbed is the best way to stop Covid-19 variants. The cost of lockdowns makes it an economic necessity. The challenge, as South Africa shows, is getting needles to people, and persuading them of the benefits. That may take years.

New Covid-19 variant raises risk of recovery limbo

26 Nov 2021

Britain and others have revived travel bans on South Africa amid a new viral mutation. Countries with low vaccination rates are most vulnerable. But if the virus evades vaccines, new lockdowns may be necessary at a time when governments and central banks have depleted firepower.

Europe’s vaccine bazooka is more like sniper rifle

18 Nov 2021

Germany may join Austria in imposing curbs on the unvaccinated to tackle soaring Covid-19 infections. Restricting freedoms is harsh but worked in France and the United States, which both saw inoculation rates pick up. It also avoids the economic pain of blanket lockdowns.

J&J breakup about more than financial engineering

12 Nov 2021

The $429 bln maker of shampoo and vaccines is splitting in two. A valuation uplift looks likely as consumer giants like P&G fetch higher multiples than pharma groups. Giving the business a separate life, with its own currency, opens the door to other possibilities, including M&A.

Bad trips reinforce psychedelic industry’s worth

10 Nov 2021

A study showed magic-mushroom drug psilocybin can treat depression. But 5% of patients suffered side-effects like self-harm, hammering shares in $1.5 bln Compass Pathways, which ran the trial. Beating this will take time, money and expertise. Whoever does, has a path to profit.

AstraZeneca’s virus fix becomes awkward appendage

10 Nov 2021

The $195 billion drug group is moving its Covid-19 jab and related treatments into a new unit. That could open the door to a sale to a peer like Johnson & Johnson. But the drug’s uncertain future and messy political history make any deal tricky and unlikely to deliver much value.

Consumer rivals can beat buyout firms in GSK scrum

9 Nov 2021

The $106 bln drugmaker’s plan to spin off its Advil unit has drawn interest from industry giants and private equity firms. A leveraged buyout would stretch even the most daring financial buyers and leave GSK with a chunky stake. Selling to a rival like P&G looks a cleaner option.

Capital Calls: Couch-potato habits help Roblox

9 Nov 2021

Concise views on global finance: The video game app’s shares surged 36% on Tuesday after it said sales nearly doubled in the quarter.

Capital Calls: Canada Goose’s extra insulation

5 Nov 2021

Concise views on global finance: Shares in the winter-jacket firm flew up over 16% after the company reported a 40% rise in sales, but the company’s valuation still has some extra padding.

Roche has edge on Novartis in Swiss pharma switch

4 Nov 2021

The drugs giant is buying back stock from its rival for $20 bln. It highlights the group run by Severin Schwan’s rich valuation and makes risky M&A less likely. The cash could be less helpful for Novartis, which is still in the middle of a turnaround and has a patchy deal record.

Novartis’ generic surgery will improve its health

26 Oct 2021

The $207 bln drugmaker is considering the future of its ailing copycat-drugs unit. With few obvious buyers, CEO Vas Narasimhan may have to accept a knockdown price or sell it in pieces. Either option should deliver a better prognosis for the rest of his business.

J&J’s Texas two-step may not soothe talc risk

20 Oct 2021

The healthcare giant took a $1.4 bln third-quarter charge for litigation. It has tried to limit claims to a unit that just declared bankruptcy. That would mean a cap on its liabilities and quicker payouts. But J&J, and others that try the legal tactic, aren't assured of success.

Merck has upper hand with Acceleron dissidents

18 Oct 2021

The biotech target's 7% shareholder, Avoro Capital, is among funds that reckon the roughly $11 billion price Merck is offering is not high enough. There are arguments on both sides. But knocking the deal off course will be tough, especially as other bidders didn't emerge.

Capital Calls: Klarna, French vaccine, Philips

18 Oct 2021

Concise views on global finance: The $46 bln Swedish buy-now-pay-later company tries to outrun Britain’s financial watchdogs; Valneva’s Covid-19 shot may prove better than the UK’s home-grown version; the industrial giant sees light at the end of the supply-chain tunnel.

Belgian biotech casualty defies Darwinian logic

15 Oct 2021

Galapagos has few drugs, a departing CEO and is worth just 3.1 bln euros, less than the cash on its books. It should be a takeover candidate, but the influence of key investor Gilead is a complication. It’s a cautionary tale of the challenges of drug discovery and creative M&A.

Malaria vaccine can protect kids and economies

7 Oct 2021

The WHO approved its first jab for the deadly disease. Its primary target is the 274,000 mostly African children who die each year. But malaria also inflicts $12 bln of economic pain. That makes the shot’s roughly $1 bln annual cost one of the smartest sub-Saharan investments.

Merck-Acceleron deal would come with side effects

28 Sep 2021

The $186 bln drug giant may buy the $11 bln Acceleron. That would help Merck diversify by adding two possible blockbusters. But Acceleron already has a partner for both: Bristol Myers, which could yet lob in a bid. If Merck does prevail, the mix risks an adverse reaction.

Italy will be first to light up Europe’s weed biz

22 Sep 2021

A nationwide plebiscite will seek to legalise cannabis. Taxing recreational dope may add some 6 bln euros to strained state coffers, and production for medical and other uses will also rise. As the U.S. experience shows, if Rome crosses the sticky line, neighbours will follow.