Biotechnology

Roche throws $2.4 bln at its growth problem

19 June 2018

The drugmaker is paying a 29 pct premium to buy out shareholders in a gene-profiling group it already controls. The deal fits its strategy, but will take years to pay off. With Roche’s cancer business challenged, fuzzy M&A is another reason for investors to steer clear.

Review: Silicon Valley gets a reality transfusion

18 May 2018

“Bad Blood” tells how Theranos, a company with a single flawed idea, attained a $9 bln valuation. A combination of need, greed, ignorance and hubris made it possible for a seductive fairy tale to outpunch scientific skepticism. Companies can’t live on stories forever, though.

China offers miracle cure for Aussie cancer unit

7 May 2018

Beijing-based buyout firm CDH Investments is offering $1.4 bln for Sirtex, the liver cancer specialist. The non-binding bid is a 20 pct uplift on an agreed deal with U.S. suitor Varian. The rich valuation upsets the logic that a strategic buyer can pay more than a financial one.

Shire makes needy suitors work for risky bet

19 April 2018

The London-listed pharma group has rejected a 42 bln pound offer from Osaka-based Takeda, and may now face a bid from Botox-maker Allergan. Shire’s business has its challenges, but its would-be acquirers have strategic issues and need a deal. The risk of overpaying is going up.

Novartis $8.7 bln splurge balances risk and growth

9 April 2018

The Swiss drugmaker paid a near 90 pct premium for AveXis, which is developing a treatment for spinal muscular atrophy, weeks after selling its consumer drugs joint venture. Experimental drugs offer faster growth than painkillers but more risk. It’s a pricey way to boost revenue.

Siemens’ slimming strategy is half-hearted

3 April 2018

A part-sale of medical unit Healthineers has failed to shrink the German company’s conglomerate discount. After all, the 84 bln euro group still spans trains, energy and factories. Siemens’ exit from the lighting and mobile businesses offers CEO Joe Kaeser a useful template.

Takeda takes a turn at Shire’s risky M&A strategy

28 March 2018

The $42 bln Japanese drugs group may bid for $45 bln takeover machine Shire. There’s not much overlap, and uncertainties hang over key businesses. But Shire is cheap, and its shareholders exasperated. That may appeal to Takeda boss Christophe Weber, but it's also a warning.

Sanofi’s M&A bloodlust comes at a high price

29 January 2018

The French group is buying blood disorder biotech Ablynx for 3.9 bln euros. That’s 50 pct more than rival Novo Nordisk bid, including protections against drug flops. Combined with last week’s $11.6 bln purchase of a haemophilia group, Sanofi’s new acquisitiveness lacks caution.

Elliott tries curing $25 bln biotech’s independence

8 December 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.

Celgene shows biotechs going the way of Big Pharma

26 October 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.

Allergan’s latest drug wheeze has bad side-effects

16 October 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.

Bloated U.S. healthcare spending has silver lining

21 September 2017

The first drug that works by silencing targeted genes by Alnylam is heading for FDA approval. It’s hot on the heels of another that treats cancer by using modified immune cells. New therapies are proliferating, thanks in part to America’s unsustainably large healthcare budget.

Healthcare’s nonprofit status belongs in the grave

13 September 2017

Publicly traded Centene is buying tax-exempt insurer Fidelis for $3.75 bln. The seller’s priest-CEO earns an ungodly sum. Exorbitant pay is rife in nonprofit healthcare, yet is rarely tied to community benefit. Euthanizing these firms’ tax break would be a social good.

Cheap genetic tests leave insurers exposed

8 September 2017

23andme’s value is getting a 50 pct booster shot thanks to its simple, affordable way of checking if you’re a high risk for Alzheimer’s and the like. Those who are may want more health, life and disability coverage. That will make the dysfunctional U.S. healthcare system worse.

Gilead flies $12 bln kite to find cancer mini-me

28 August 2017

The purchase of Kite Pharma is reminiscent of Gilead's own history and past blockbuster deals. The $96 bln biotech is betting a plucky upstart has found cancer treatments that will change medicine, and society will pay the staggering cost. This protégé is a risky pupil, however.

Konica Minolta deal helps develop clearer picture

6 July 2017

The Japanese company that abandoned cameras for copiers a decade ago is now putting its focus squarely on medical diagnostics. An up-to-$1 bln acquisition of Ambry Genetics alone won't assure Konica Minolta's future. It is, however, an affordable way to start changing its DNA.

Biotech IPO rejuvenates Hong Kong market

13 June 2017

Shares of WuXi Biologics, the city's biggest listing this year, popped as much as 39 pct on their debut. High earnings growth and a lack of exciting IPOs led to strong demand for the $511 mln deal. This is good news for a bourse keen to attract a new breed of entrepreneurs.

Chinese biotech IPO deserves potent price

2 June 2017

WuXi Biologics could raise over $500 mln in a hot Hong Kong debut. A value of up to 30 times 2018 earnings sounds high, especially given a novel business model. But earnings are soaring and the local bourse lacks exciting drug firms. Growth and scarcity is a powerful formula.  

Samsung gambles on an heirless future

31 May 2017

The South Korean giant will keep a structure that lets Jay Y. Lee keep control with a small stake. But a new left-leaning government might make it harder for the de facto leader to rule this way. Samsung looks unprepared for a future without its scion.

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.