Novo Nordisk sugar rush will fade 1 February 2019 Strong sales of drugs to combat diabetes and obesity boosted the Danish drug company’s shares. But the rising number of users could give U.S. health providers scope to negotiate cheaper prices. The arrival of rival medicines, and expiring patents may give them leverage.
The Exchange: Big Weed’s big year 11 January 2019 Bruce Linton runs the world's biggest cannabis producer, Canopy Growth. He visited Breakingviews to discuss what's coming down the pipe in 2019, why a $100 bln weed company is still some way off, and why he doesn't actually partake - yet.
Temasek helps a drugstore giant flaunt its glow 10 January 2019 The state investor may sell part of its stake in health and beauty giant A.S. Watson. The retailer's size, moves upmarket in the mainland and growth elsewhere in Asia can justify a premium. Cashed-up buyout firms may well be tempted, helping Singapore to cash in on a $6 bln bet.
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.
Cannabis will take China tech’s path to propriety 3 January 2019 A subversive industry feared by the establishment, with investors reliant on legal loopholes: American pot companies are starting out much like Chinese tech giants did. In the same fashion, as this shadowy industry creates jobs and wealth, appetite for reining it in will wane.
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.
Tech to disrupt supply chains more than trade wars 2 January 2019 U.S. President Donald Trump’s tariffs give global companies an incentive to manufacture locally. But the shift was already underway because of new technologies like automation. Carmakers and pharma groups will localise more production in 2019 even if tensions over commerce abate.
GSK takes M&A steroids for strategic ailment 19 December 2018 The UK drugmaker will mesh its consumer health unit with Pfizer’s, gear it up and spin it off. That should leave more firepower for GSK’s weaker pharmaceutical division. Both businesses should be better off, if boss Emma Walmsley can invest wisely. That’s still to be seen.
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.