Pharmaceuticals

Kirin’s Japanese makeover is only half pretty

7 August 2019

The Japanese brewer is buying 30% of cosmetics and kale juice maker Fancl for $1.2 bln. Diversifying away from booze makes sense; rivals are doing it too. But paying a multiple of almost 40 times earnings, over twice the buyer’s own, for a minority stake is not a good look.

British drug group can’t even give away opioids

6 August 2019

Mallinckrodt suspended a plan to spin off its painkiller business to shareholders. It was a too-transparent attempt to shield itself against legal liabilities from thousands of lawsuits. With falling sales, hefty debt, and a potentially big settlement looming, its future is grim.

Pfizer’s old-drug disposal merits a warning

29 July 2019

The $240 bln pharma outfit is spinning its off-patent arm and merging it with Mylan. Combining brands like Lipitor and Viagra with EpiPen creates scale but generic price pressure makes for a poor financial prognosis. Pfizer at least gets $12 bln to spend on innovative new drugs.

Gilead finds shrewd $5.1 bln salve to biotech risk

15 July 2019

The $86 bln U.S. outfit hopes to harvest multiple therapies by injecting cash into rival Galapagos. Gilead almost doubles its stake, limiting its downside exposure, and pledges to keep the Belgian firm independent. History suggests it’s a smart way to create drugs and wealth.

American M&A makes excess great again

28 June 2019

U.S. deals jumped 19% in the first half even as activity ebbed in Europe and Asia. Topping the list are pricey purchases by AbbVie, Bristol-Myers and Occidental, plus Raytheon’s questionable merger with United Technologies. Most buyers’ owners will regret their CEOs’ ambitions.

U.S. healthcare reform ideas are too single-minded

27 June 2019

Americans are dissatisfied with the only rich-world system that isn’t universal. Democratic presidential candidates and others tend to fixate on either nudging the status quo or so-called “Medicare for all.” Other nations actually offer more varied examples – all costing less.

Pushy dealmakers ignore their best M&A advisers

26 June 2019

AbbVie and Occidental have structured huge acquisitions so shareholders don’t get a vote. Research suggests that when owners get a say, as happens more often in the UK, it can save a lot of scorched value. Bypassing them means acquisitive CEOs are losing a valuable sanity check.

Aging AbbVie turns to ugly $63 bln Botox remedy

25 June 2019

The drug maker’s Humira accounts for more than half its sales but may soon face competition. Buying Botox maker Allergan at a 45% premium looks like an excessively expensive and temporary face-lift. AbbVie’s money and time could be better spent on more invigorating targets.

Bristol-Myers drug sale tests $74 bln Celgene deal

24 June 2019

U.S. trustbusters have butted in once again, forcing the divestiture of a lucrative treatment. Bristol-Myers could have off-loaded its own nascent drug. Instead it may be hoping for a big price. That would support the idea that Celgene was undervalued, but it’s a riskier path.

The Exchange: John Delaney

17 June 2019

The first Democrat to bid for 2020’s presidential election has a pitch rarely heard in today’s political slugfest: that Democrats and Republicans can get along. Despite being a peacemaker, the former Maryland congressman has some punchy views on China, Big Tech and drug prices.

Skill, luck and law drive $11 bln biotech buyout

17 June 2019

Array BioPharma has developed several potential blockbusters for others. But it wouldn’t be selling to Pfizer at a 62% premium without an earlier gift from antitrust regulators. A pact between two rivals sent valuable drugs Array’s way, along with cash, making it a juicy target.

China’s pharma shake-up wins healthy endorsement

11 June 2019

Drugmaker Hansoh is valued at $10 bln after pricing shares at the top of the range in its Hong Kong IPO, backed by high quality investors. It looks like an early beneficiary of Beijing’s radical price reforms which favour diversified giants and will knock out low-quality rivals.

For U.S. patients, knowledge isn’t power

28 May 2019

Forcing hospitals and doctors to disclose net prices to consumers, as President Trump is proposing, is a good idea. Patients can only shop around if they know what they will pay. Even so, healthcare still fails many other tests of being a competitive market.

Three reasons a wonder drug can cost $5 mln

14 May 2019

Novartis’s gene therapy for a deadly disease looks likely to set a record. There are justifiable factors, like the value it delivers and drugmakers’ high development costs. Then there are less palatable ones, including an inefficient U.S. market with a tolerance for high prices.

America’s opioid legal blitz is a smoking mess

8 April 2019

Overdose deaths are surging, Oklahoma won a $270 mln settlement, and a blizzard of lawsuits is bearing down on makers and distributors of the drug. It recalls the tobacco crisis that ended with a $206 bln pact. Yet proving liability and apportioning blame will be much harder.

Walgreens ails from inflation deficiency

2 April 2019

More than $7 bln in value bled out of the drugstore chain after it slashed earnings guidance. Prescription prices are the root cause: After years of rising, they’re now under pressure and crimping once-fat margins. Walgreens’ “most difficult quarter” won’t be the industry’s last.

AstraZeneca takes precision approach to cancer M&A

29 March 2019

The UK drugmaker will pay up to $6.9 bln to work with Daiichi Sankyo on a breast cancer drug. It’s a low-risk way of growing in a hot area, without the pain of an acquisition. The more than $4 bln jump in the Japanese group’s market value suggests the two are better off together.

Biogen loses same Alzheimer’s bet others have lost

21 March 2019

The failures of similar drugs in formal trials meant Biogen’s effort was always a long shot. Yet ditching it vaporized $18 bln, or over a quarter, of the biotech’s value. The giant market for a therapy and the fear of missing out lured in both the company and Wall Street.

Starboard’s Bristol-Myers pitch needs an activist

19 March 2019

Pushy investors should keep their arguments tight. Starboard’s beef with the drug company’s $74 bln deal for Celgene does highlight overpayment and patent risks. But its 197-page presentation is as bloated as its target, containing contradictions and micromanagement.

Bristol-Myers $74 bln deal needs surgery

28 February 2019

Big shareholder Wellington Management and activist Starboard Value have both come out against the pharma firm’s deal for Celgene. The market also isn’t pricing in the acquisition happening as Bristol-Myers envisaged. It doesn’t help that the buyer was already overpaying.