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from Breakingviews:

Roche’s $8 bln bet outsmarts ice-bucket challenge

By Robert Cyran

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Roche’s latest $8 billion bet may outsmart the ice-bucket challenge. Dumping cold water on heads, the social-media phenomenon now boosting research on Lou Gehrig’s disease or amyotrophic lateral sclerosis (ALS), is a great way to raise charitable cash. But the drug made by Roche’s target, InterMune, treats an obscure yet equally fatal disease with more sufferers.

There are about 35,000 patients diagnosed with idiopathic pulmonary fibrosis, or IPF, in the United States every year. That’s more than five times the annual incidence of ALS. Both diseases strike similar age groups and are uniformly deadly, killing most patients within a handful of years. Yet ALS attracts more than twice the research budget annually and the popular ice-bucket challenge, which has already raised about $80 million, will increase the gap.

ALS has attracted media attention ever since it struck down Gehrig, an outstanding baseball player, in his prime. And death by loss of motor control inspires fear and empathy. But financial markets tend to take a more hard-nosed approach. Pharmaceutical companies focus on patient numbers and a drug’s potential efficacy. InterMune’s drug stacks up well on these metrics. Patients taking it tend to stave off the lung scarring of IPF for longer, and there are few alternative treatments. Analysts project sales could eventually top $1 billion a year.

from Breakingviews:

IPO exuberance ensnares Deutsche, Wells Fargo

By Robert Cyran

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

IPO exuberance has ensnared Deutsche Bank and Wells Fargo. The two banks nixed a biotech deal last week - six days after it started trading. Their reasoning looks defensible, but their due diligence beforehand less so.

from Breakingviews:

Inversions start to spin out of control

By Robert Cyran

The author is a Reuters Breakingviews columnist. The opinions expressed are his own. 

Inversions are starting to spin out of control. A quest for tax savings has made digestible overseas targets attractive to U.S. buyers. Hospira’s potential $5 bln deal for a Danone unit highlights a fresh supply, for so-called “spinversions.” The odd combination also reflects the perverse incentives distorting corporate decisions.

from Breakingviews:

Allergan bosses put money where their mouths are

By Robert Cyran

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Allergan bosses have put money where their mouths are. The drugmaker says it is worth more on its own than the $52 billion hostile suitor Valeant Pharmaceuticals International is offering. That’s straight from the empty-promise, takeover-defense playbook. Allergan, however, is linking stock and option grants to lofty profit goals. It’s a bolder gambit that should become an M&A norm.

from Breakingviews:

Tax-arbitrage M&A requires a deep discount

By Robert Cyran

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.  

Tax-arbitrage M&A requires a deep discount. U.S. companies seeking to relocate by mergers in a bid to slash how much they remit to Uncle Sam were a big part of the $1.8 trillion first-half deal boom. The benefits of such ill-conceived combinations will be fleeting, though. The more so-called inversions there are, the more likely the law is to change.

from Breakingviews:

M&A shows symptoms of overheating

By Robert Cyran and Kevin Allison

The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

The merger market is showing symptoms of overheating. Global deal volume is up sharply this year – up 63 percent according to Bernstein research and 71 percent by Thomson Reuters’ tally. Monday’s announcements, meanwhile, hint at toppiness.

from Breakingviews:

Valeant urges $54 bln deal with carrot, two sticks

By Robert Cyran

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Valeant is pushing its $54 billion deal with the help of a carrot and two sticks. The pharmaceutical group raised its offer for Allergan again on Friday, on the condition that the board of its target cooperates. Meanwhile hedge fund boss Bill Ackman on Monday threatened to unseat six directors – and Valeant could yet decide to go fully hostile. But questions over Valeant’s own stock remain its biggest weakness.

from Breakingviews:

Glaxo wrestles with its past

By Neil Unmack

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Investors keep taking hits on GlaxoSmithKline. The pharmaceutical group’s stock price has fallen nearly 10 percent in the last year on the back of weaker sales and bribery accusations in China. News of a criminal investigation in the United Kingdom knocked almost $2 billion of its market capitalisation on Wednesday morning.

from Breakingviews:

Failed bid would leave Astra under pressure

By Chris Hughes
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The likely failure of U.S. drugmaker Pfizer’s $119 billion bid for AstraZeneca, which was due to lapse on May 26, would leave the frustrated buyer no worse off. But the target has much to prove. Some of its shareholders welcomed a possible takeover - and could again.

from Breakingviews:

Astra-Pfizer needs a fresh start later in the year

By Chris Hughes
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

AstraZeneca should not reengage with Pfizer in the dying days of the takeover timetable. Talks now would either be fruitless or delay a proper restart later.

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