Healthcare

Deals a better bet for drug giants than R&D

2 January 2018

Last year, U.S. regulators approved the most new therapies since 1996. Yet the return on research outlays for big firms, barely topping 3 pct according to Deloitte, is inadequate and falling. More focused, smaller firms are winning scientifically – and their owners financially.

Even rich geeks can’t escape the Grim Reaper

22 December 2017

Silicon Valley’s best and brightest have earned fortunes by solving complex problems. Now many are turning brains and wealth toward conquering death. Applying an engineering mindset to health issues may benefit humanity, but it’s more likely to burn capital than discover the fountain of youth.

Home-healthcare company pulls plug on itself

19 December 2017

Kindred Healthcare has gone out with a whimper, selling itself for a 5 pct premium to insurer Humana and two private-equity firms. Management may have been a bit too eager to put an end to the company’s uncomfortable public existence with the $4.1 bln deal.

Hadas: U.S. fails life, liberty, happiness test

14 December 2017

The country’s Declaration of Independence offers a pretty good way of measuring economic success, and failure. Life expectancy is stagnating. Liberty suffers from too-strong companies and too-weak government. And rising inequality undermines the pursuit of economic happiness.

Teva’s feverish bailing efforts deluged by reality

14 December 2017

The drugmaker is suspending its dividend and cutting 25 pct of its workers to try to stop a debt-laden 2015 deal sinking the company. But most of the savings will probably be eaten up by shrinking sales for its blockbuster drug and falling prices for other generic medicines.

Tencent health push shows sneaking hubris symptoms

14 December 2017

China's $480 bln gaming giant has quietly expanded into healthcare, where apps linking patients to doctors and services are booming. Yet competition is fierce and online models are unproven. Even for this nimble investor, rushing into hospitals could lead to injury.

Viewsroom: Executive payouts in rude health

7 December 2017

Aetna CEO Mark Bertolini is bagging $500 million from selling the insurance company to drugstore chain CVS – despite only a middling performance as boss. Behind such healthcare mergers: a desire to cut out a surfeit of middlemen.

Walgreens gets in early on healthy growth in China

7 December 2017

The U.S. chain is paying $416 mln for 40 pct of peer GuoDa. A sensible shake-up of drug distribution and sales by Beijing is spurring consolidation and giving pharmacies a stronger hand. This deal gives Walgreens market insight and could be a springboard for more investment.

Healthcare goliaths cut out the middleman

6 December 2017

The U.S. healthcare system is full of intermediaries chasing after a share of the industry’s profit, often by gaming each other. UnitedHealth Group’s $4.9 bln purchase of a physicians group from DaVita is the latest example of trying to cut costs by eliminating links.

Middling performance nets $500 mln for Aetna CEO

5 December 2017

Mark Bertolini’s payday from selling the insurer to drugstore chain CVS stems largely from steady success and not selling shares amassed over the years. Yet Aetna’s performance is nothing special compared to peers. Genius is easy to find when there’s a heavy wind behind a sector.

Consumer groups’ health drive comes at a cost

4 December 2017

Germany’s Merck has invited bids for its $4.8 billion Seven Seas vitamins unit. With Pfizer also selling its over-the-counter business, Nestlé and rival consumer giants see opportunities to use their sharper marketing skills. But the health craze comes with pumped-up valuations.

CVS deal reveals high cost of Amazon defense

3 December 2017

At $77 bln, the U.S. drugstore chain is paying over the odds to buy insurer Aetna. Identified savings cover only a third of the premium. In time, sending more patients to CVS clinics could lift profit. The plan, however, is more apt to simply stop existing customers from leaving.

Sabotaging Obamacare backfires on Republicans

22 November 2017

President Trump claims his predecessor’s health-insurance program is dying. He and the GOP have eliminated some subsidies and slashed marketing. Yet the pace of enrollment has risen from last year. The political cost of efforts to kill the program is rising.

Activist lays multiple chips on silicon strategy

21 November 2017

In its latest semiconductor play, activist Starboard is seeking to push Israel’s Mellanox into a deal. It also owns a chunk of Marvell, a potential buyer whose prior approach was rebuffed. With technology and economics driving rapid consolidation, it makes sense to spread bets.

Legacy legal wrangles badly timed for Guy Hands

21 November 2017

The private equity tycoon who sued his adviser after the financial crisis is feuding with creditors of Four Seasons care homes. The battle hinges on whether lenders have a claim over some assets. The story of excessive and too-complex financing won’t help Hands’ next fundraising.

Congressional contortions raise risks to tax cuts

15 November 2017

The Senate is complicating tax reform by proposing to repeal a key part of Obamacare. Cuts in personal rates would also be temporary while corporate breaks would be permanent. The moves would help meet deficit rules but alienate key lawmakers - and give critics more ammunition.

Aetna lays out its insurance value for CVS

31 October 2017

Revenue at the $56 billion health-coverage firm fell 5 pct last quarter, partly from dumping some Obamacare policies. But profit jumped 48 pct. That offers alluring protection for CVS, whose pharmacy and drug-benefit business is threatened by rising competition and transparency.

Aetna bid is a defensive prescription for CVS

26 October 2017

The drugstore and pharmacy-benefit company’s $66 bln offer for the health insurer should generate some savings. More important, it could help the firm resist Amazon’s entry into drug distribution, and the unpleasant side effects of transparency and low margins that may follow.

GSK’s new CEO held hostage by dividend cult

26 October 2017

The British pharmaceutical company’s market value slid by 6 bln pounds after Emma Walmsley suggested big deals and dividends might not be compatible. Being flexible is perfectly rational – unlike investors craving for high payouts at the potential expense of growth.

Animal-health spinoff may be just the Rx for Lilly

24 October 2017

The $90 bln outfit is weighing the sale or float of its pet and livestock drug business. Lofty valuations make it tempting to raise cash when the firm’s core pharma business has pipeline stumbles. But FDA approval for its arthritis treatment is the real prescription investors seek.