Healthcare

Pharma’s obesity gold rush will have limits

11 May 2023

Drugmakers Novo Nordisk and Eli Lilly are vying for a large slab of the weight loss medications market, which analysts reckon could be worth $100 bln by 2031. In this Viewsroom podcast, Breakingviews columnists discuss how investor optimism in a booming market is unwarranted.

KKR’s $10 bln medical deal overlooked risk factors

10 May 2023

Since the 2018 buyout that larded Envision Healthcare with debt, it has struggled with Covid-19, hypertension induced by feisty insurers and rehab on its billing practices. Bankruptcy is now the prescription. It’s a reminder to beware combining operational and financial leverage.

Capital Calls: Walt Disney

10 May 2023

Concise views on global finance: Bob Iger’s first full quarter since returning as CEO opened a window onto multiplying challenges across the Magic Kingdom.

Novo Nordisk’s chunky valuation risks crash diet

4 May 2023

The $274 bln pharma group trades at a big premium to peers. Investors are buoyed by hopes Novo can take a large share of an obesity market that could be worth $100 bln by 2031. But competition and questions about its drug’s effectiveness could slim down its valuation.

Capital Calls: US GDP, Eli Lilly, EU budget

27 Apr 2023

Concise views on global finance: Consumer spending provided fragile support for the US economy in the first quarter. Meanwhile pharma group Eli Lilly is racing against rising obesity expectations, and the European Commission faces German hurdles to replacing its budget rules.

Capital Calls: Disney, Thyssenkrupp

24 Apr 2023

Concise views on global finance: The CEO of the $180 billion entertainment company has to thread the needle between layoffs and degrading value as he finds a successor; the 4 bln euro German steel-to-cars group’s shares tanked after CEO Martina Merz left.

Temasek hospital deal channels its Dr Resilience

11 Apr 2023

The Singapore investor is taking control of India’s Manipal chain for $2 bln, doubling down as the Pai family trims. Private equity firm TPG is placing a second bet too. Growing and recession-resilient, Asian healthcare is emerging as a relatively attractive safe haven.

J&J’s sweetened talc settlement still unsettling

4 Apr 2023

The healthcare giant’s attempt to limit legal claims to a unit that declared bankruptcy was shot down by courts. It’s trying again with a $7 bln bigger pot and more plaintiffs on board. That may appease the aggrieved. But bypassing jurors sets a bad precedent.

TPG starts a dicey dance with death Down Under

7 Mar 2023

The private equity firm is offering $1.5 bln for funeral-services firm InvoCare. The target could use some help after losing market share. But the 41% premium means the buyer would be piling on debt as interest rates rise. Making a decent return would require some deft footwork.

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.

Capital Calls: Tech trustbusting, Fresenius

22 Feb 2023

Concise views on global finance: After fighting a slew of deals, the U.S. FTC decided not to challenge Amazon’s $3.9 bln acquisition of One Medical, while the sprawling $17 bln German conglomerate is cleaning up its messy structure in a tentative step toward breaking up.

CVS pays exorbitant $10 bln price to diversify

8 Feb 2023

The drugstore-chain owner’s vertical integration plans have failed to impress investors, but it’s buying Oak Street anyway. The patients will generate revenue for pharmacies and savings for insurer Aetna. At $17 mln a doctor, however, the presupposed success at both is ambitious.

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.

Britain can afford to pay nurses and teachers more

20 Jan 2023

UK public workers want a big raise from the government. An inflation-matching pay rise would cost 18 bln pounds; growing state employees’ salaries in line with the private sector around half that. Downing Street could fund it with a 1p rise in VAT and closing tax reliefs.

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.

CVS maintains unhealthy M&A lifestyle

12 Jan 2023

The drugstore chain owner may buy Oak Street, a fast-growing network of doctors treating older patients. A mooted $10 bln price sounds high given the cash burn and risk of a government crackdown. It would be another ill-advised deal for boss Karen Lynch’s growth strategy.

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.

Capital Calls: Southwest, U.S. jobs and wages

6 Jan 2023

Concise views on global finance: Financial bumpiness caused by the airline’s major flight disruptions should be temporary, partly due to limited competition; slower U.S. wage growth raises the chances that the Fed won’t have to crush the labor market to bring down inflation.

Capital Calls: Amazon, Flying cars

5 Jan 2023

Concise views on global finance: The $855 billion e-commerce giant's layoffs could actually help its antitrust defense; Stellantis’s possible $150 mln investment in Archer Aviation is less crazy than it seems.