Pharmaceuticals

Elliott’s best bet with Bayer is a breakup

10 December 2018

Paul Singer’s fund has held a stake in the $66 bln German conglomerate for over a year. Litigation fears have pushed the stock down 40 pct in that time. Convincing Bayer to sell its drug and consumer health units could create value, but means getting Singapore’s Temasek onside.

Cannabis starts to copy tech’s Indian rope trick

7 December 2018

Marlboro maker Altria is spending $1.8 billion – more than a 40 percent premium – for a 45 percent stake in pot grower Cronos. The valuation is both high and irrelevant. Cannabis is beginning to adopt Silicon Valley’s belief that the winner is whoever has the most cash.

Big Weed is better off without Big Tobacco embrace

3 December 2018

Altria can easily afford to swallow $2 bln pot producer Cronos. It’s the seller – and its peers – that could pay a high price. Companies want the product to be seen as medicinal not lethal, edible not smokable, and more like beer than tobacco. Not all capital infusions are equal.

GSK looks like a better seller than buyer

3 December 2018

The UK drug giant is acquiring cancer specialist Tesaro for $5.1 bln and offloading its Horlicks unit to Unilever for about the same amount. It’s a neat way for CEO Emma Walmsley to reshape GSK. But the purchase will take years to pay off – and is much riskier than hot drinks.

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.

Cannabis industry shops for a suit and tie

16 November 2018

Money is pouring into weed as valuations rise and legal barriers fall – nudged further by recent U.S. election results. Companies like Canopy, Aurora and MedMen are starting to take on a veneer of acceptability. That doesn’t make them good investments, but it’s progress.

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.

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.

Perrigo’s new CEO is a strategic smoke signal

9 October 2018

An ill-timed expansion left the Irish firm struggling with a tough market for generic drugs. Now it has hired a new chief who formerly ran cigarette companies, breaking a pharma-sector taboo. That’s an emphatic statement that its future lies in consumer goods.

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.

Pfizer takes Hippocratic approach to governance

1 October 2018

The drugmaker has split its CEO and chairman roles, but undermined the impact by keeping boss Ian Read on as an executive chairman. Fortunately the $258 bln drugmaker’s pipeline puts it on a sound footing. Like much about Read’s strategy, at least the reshuffle does no harm.

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.

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.

Drug watchdog’s Brexit spat is bad omen for London

25 September 2018

The European Medicines Agency is embroiled in a legal fight to scrap a lease on its UK headquarters. Its argument, that Brexit was an unforeseeable event, looks weak. But even if the regulator loses the case, its actions offer a grim prognosis for London office property.

Cannabis stocks have whiff of 2006

14 September 2018

A weed ETF has doubled in price in just over a year, while a Canadian producer has been targeted by an activist because its stock “only” trades at eight times EBITDA. Demand is real and legalization is coming. But online gaming’s sharp correction 12 years ago offers a warning.

Rising generic-drug pressure may produce M&A panic

6 September 2018

Novartis has dumped part of its unit producing copycat medicines. Mylan and Perrigo are mulling sales, too. Regulators’ attempts to encourage competition and the emergence of a large nonprofit pill producer mean multiple sellers risk fetching only bargain basement prices.

Bayer’s lowly valuation lacks positive catalyst

5 September 2018

The German drugs-to-seeds maker’s sales rose 9 pct in the second quarter, helped by its pricey acquisition of Monsanto. That deal is tarnished by lawsuits, while Bayer’s consumer and pharma units also face challenges. Though the bad news is priced in, the discount will persist.

Opioids and trade war create toxic cocktail

28 August 2018

An inflow of lethal fentanyl from China helped America record nearly 72,000 fatal drug overdoses last year. A breakdown of trust over tariffs may make it harder to cooperate over this dangerous import, and fuel unhelpful arguments about whether supply or demand is to blame.

Icahn’s late start blunts Cigna blocking campaign

7 August 2018

The activist makes a good case for rejecting the insurer’s $52 bln Express Scripts deal. Yet his argument - Cigna is paying too much for a target threatened by regulation and Amazon - was evident months ago. And the window for enlisting other arbs to his side has already closed.

GSK can do without distraction of a breakup

25 July 2018

Boss Emma Walmsley plans to cut costs and invest more in research. It’s a neat riposte to critics who reckon the sprawling drugs and consumer group should split itself up. Such a move would be risky and may not create much value. She still has time to prove the naysayers wrong.