Biotechnology

Skill, luck and law drive $11 bln biotech buyout

17 June 2019

Array BioPharma has developed several potential blockbusters for others. But it wouldn’t be selling to Pfizer at a 62% premium without an earlier gift from antitrust regulators. A pact between two rivals sent valuable drugs Array’s way, along with cash, making it a juicy target.

Aussie telco buyout exhibits fibre-optic fever

28 May 2019

Sweden’s EQT has offered to buy Vocus for $2.3 bln, a 35% premium to its undisturbed price and far higher than 2017 bids from KKR and Affinity. The price reflects hype around fancy fibre networks, which may not last. Shareholders will be grateful for the opportunity to exit.

Review: Theranos story is both crazy and ordinary

29 March 2019

A new documentary depicts the blood-testing company’s founder Elizabeth Holmes as an unblinking, controlling CEO who believed she could defy science. Her $9 billion dreams ended in fraud charges. In some ways, though, it’s a painfully normal Silicon Valley story.

Biogen loses same Alzheimer’s bet others have lost

21 March 2019

The failures of similar drugs in formal trials meant Biogen’s effort was always a long shot. Yet ditching it vaporized $18 bln, or over a quarter, of the biotech’s value. The giant market for a therapy and the fear of missing out lured in both the company and Wall Street.

Roche pays late entry fee to gene therapy party

25 February 2019

The Swiss group is buying Spark Therapeutics, which develops treatments that tinker with patients’ DNA, for $4.3 bln. The deal gives Roche a leg up in a hot sector. But it comes with a fat premium, risk and fierce competition. The rewards may take years to come through.

Philips could be a tortoise to Healthineers’ hare

29 January 2019

The 31 bln euro Dutch medical tech group has a lower valuation and operating margin than its larger German peer. Steady growth and a Healthineers stumble could help it close the gap. Global ageing should lift both companies, though Philips has the greater recovery potential.

Eli Lilly’s $8 bln cancer deal is a worthy wager

7 January 2019

The drug giant reckons it’ll take years to get a good return on its pricey acquisition of Loxo. But the upstart has had startling success figuring out why rare cancerous mutations occur, rather than where. Longer term, that should make for plenty of targets – and sticky prices.

Biotech unicorn gorges at market trough of dreams

28 November 2018

Moderna’s potential could merit an $8 bln IPO, even if investors often underestimate the time and cost of developing new drugs. Amid waning bullishness, the firm is wise to heed the finance commandment of the cash-hungry sector – when hors d’oeuvres are being passed, take two.

Pharma upset derails remake of Samsung’s heir

15 November 2018

Jay Y. Lee championed the $20 bln Samsung BioLogics as a new engine of growth at the South Korean conglomerate. Now the arm faces delisting for breaking accounting rules ahead of its IPO. Such a punishment would be harsh but also fit with Seoul’s new resolve to rein in tycoons.

Biotech unicorn takes rare, rapid road to IPO

11 October 2018

Allogene hopes to sell off-the-shelf cancer immunotherapies. But the firm is under a year old and its treatments may take 10 years to reach the market. Going public bucks the trend of startups staying private for longer. Its founders are striking while their reputations are hot.

Blackstone tries small dose of new growth drug

4 October 2018

Buying Clarus, which finances biotech and pharma trials, is outside the buyout giant’s comfort zone. It’s riskier than taking over mature businesses with steady cash flows. The deal is modest in size, though, and as drugmakers look to outsource, could be a useful petri dish.

Chinese pharma R&D mixes up a potent IPO formula

26 September 2018

WuXi AppTec, a $13 bln group which carries out research and clinical trials for the likes of Pfizer, will list in Hong Kong. An overhaul of mainland rules to spur local drug development means business is booming. After a healthy debut in Shanghai, investors will take note.

Biotech starts Phase II Hong Kong market trial

13 September 2018

Diabetes drug developer Hua priced its shares at the bottom of the range, and halved the deal size. After peer Ascletis debuted last month to kick off an expected wave of IPOs from the sector, its value fell 50 pct. The success rate for this big experiment may be low for a while.

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.