Healthcare

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.

Fewer Chinese babies intensify an old story

22 January 2019

The country’s birth rate fell below 11 for every 1,000 people, its lowest level since the People’s Republic started in 1949. It’s a reminder that the country’s working-age population will keep shrinking, and makes redesigning a weak pension system a far more pressing matter.

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.

Morgan Stanley’s virtual mega-bank model pays off

3 January 2019

The Wall Street firm is funding a whopping $33.5 bln loan for Bristol-Myers’ purchase of Celgene through its decade-old alliance with Japan’s MUFG. Acting like one bank gives Morgan Stanley bragging rights and a chance to play alongside rivals with much bigger balance sheets.

Bristol-Myers takes $74 bln bet against the market

3 January 2019

There are good reasons to buy rival oncology giant Celgene. But cost cuts don’t cover the 54 pct premium and the target’s owners get the financial benefit. Bristol is hoping for luck in the courts and multiple regulatory approvals that Celgene’s shareholders were skeptical of.

Wellness programs and waists spread together

24 December 2018

Most U.S. companies subsidize everything from fitness trackers to yoga classes for employees. Yet evidence shows these regimes do little to keep workers fit. It’s other benefits, such as curbing healthcare costs and attracting talent, that will keep the wellness craze going.

Germany’s Fresenius needs credibility injection

7 December 2018

The 22 bln euro healthcare provider fell 15 pct after it warned of stagnant profit. Investing more in hospitals makes sense, but investors are smarting from past blunders, and need more clarity. With pressure from insurers to cut costs growing, a healthy valuation looks remote.

Americans spend faster to die younger

29 November 2018

Life expectancy has fallen for the third year in a row. Yet the U.S. lays out far more money than other countries to foil the Grim Reaper – and the amount is rising. The issue isn’t just what’s spent but where. More on basic public health and education would be a good start.

Colfax trades aging industry for aging Americans

19 November 2018

The industrial outfit is pivoting to healthcare by acquiring orthopedic-device maker DJO from Blackstone for $3.2 bln. Baby boomers’ growing need for knee braces and implants ensures a healthy market. But loading up on debt makes this a stressful way to chase perpetual youth.

U.S. companies seek to kick big pharma addiction

13 November 2018

Walmart and Home Depot are fighting back against drugmaker programs that cut patients’ expenses while leaving employers paying full fare. It’s part of an escalating war between providers, insurers and corporations over healthcare costs. The effectiveness remains to be proved.

GE boss could face his own goodwill writedown

12 November 2018

The firm’s stock sank anew on Monday despite Larry Culp’s vow to speed asset sales. Repeated failures to draw a line under power woes and other liabilities have shredded GE’s credibility. The new chief risks falling into the same trap, and losing investors’ confidence.

Elliott’s Athenahealth deal leaves sickly odor

12 November 2018

The activist is helping take private the healthcare firm it started agitating against 18 months ago. But at $5.7 bln the deal is some 16 pct below its May offer – and Elliott is relying on a partner to buy the lion’s share. Such tactics may not play well against future targets.

AstraZeneca needs magic pill to hit $40 bln target

8 November 2018

A raft of new cancer drugs helped the pharma giant return to sales growth in the third quarter. A strong pipeline suggests it has turned the corner. To hit his 2023 revenue goal, though, CEO Pascal Soriot needs regulatory approvals to go his way, and U.S. price caps to stay away.

Obamacare roots grow too deep to dislodge

7 November 2018

Democratic control of the House effectively ends Republican hopes of overturning the former president’s healthcare reforms. Even voters in red states are warming to the law as Medicare expands. The worry now for insurers, hospitals and middlemen is a Democratic victory in 2020.

Flawed U.S. health gives Fresenius dual boost

7 November 2018

California rejected a plan to cap dialysis rates. A new Congress is also unlikely to curb the cost of U.S. healthcare. Both are good news for the likes of Germany’s Fresenius Medical Care, the world’s top dialysis firm – but less so for insurers and patients.

Holding: M&A’s big MAC attack headed for retreat

5 November 2018

If Boston Scientific manages to nix its $275 mln deal with Channel Medsystems, it’ll be only the second Delaware case of a buyer able to walk after a material adverse change. More likely the courts will toss both cases at trial or on appeal. The upside should be clearer rules.

Top Trump economic aide sells last of credibility

23 October 2018

A report from Kevin Hassett’s CEA essentially equates single-payer healthcare with collectivized Soviet agriculture. It’s a distortion of one Democratic idea just days before elections. Hassett also claimed tax cuts would pay for themselves. He’s due a move to the campaign team.

ConvaTec investors brace for lengthy patch-up job

15 October 2018

The UK medical devices maker lost nearly 30 pct of its value after it warned of lower growth and its CEO resigned. The selloff seems excessive given modest changes to revenue and margins. The remedy could be cost cuts. But any turnaround will have to wait for a new chief.

Broken Akorn deal is exception to MAC rule

1 October 2018

Merger escape clauses are notoriously hard to trigger, but a judge has let Fresenius nix its $4.75 bln Akorn deal. Don’t expect many copycats. The case includes misconduct claims, and may yet be overturned. Corporate-friendly Delaware courts are loath to second-guess contracts.

Judgment, nerve and luck keep Merck CEO in job

26 September 2018

The drug maker has waived its retirement age so Kenneth Frazier can stay on as boss. He has justified the move by prioritizing R&D, fighting drug lawsuits, and making smart hires. The chance-filled path of hit cancer drug Keytruda also helped. And 65 is no longer a sell-by date.