Pfizer’s $150 bln plan is high-risk, low-benefit

November 19, 2015

Buying Allergan would give the drug giant a low-tax domicile in Ireland and one good drug, Botox. At the reported price, Allergan would accrue nearly all of the obvious upside. Pfizer would be left with a possible integration hangover – and tax savings that might disappear.

No simple cures for Gilead and Apple valuations

October 28, 2015

Like the iPhone maker, the biotech is the best in its industry and churns out hefty profit. Yet its stock trades at a big discount to the market. Investor impatience for astonishing new products - and fears that neither company will find them - borders on the irrational.

Monsanto heaps pressure on Syngenta

May 8, 2015

The U.S. seeds giant has made a $45 bln approach to the Swiss pesticide firm. The target rejected this as too cheap and too risky. Syngenta has a point: there will be major political and antitrust hurdles. But it needs to lay out just how it will create more value on its own.

LabCorp deal tests positive for value destruction

November 3, 2014

The firm that checks patients’ blood is paying $6.1 bln for clinical trial outsourcer Covance. The strategic logic is hazy. Shareholders’ financial diagnosis is damning, too. They swabbed some $700 mln off LabCorp as cost cuts fell far short of the 32 pct premium paid.

IPO exuberance ensnares Deutsche, Wells Fargo

August 14, 2014

The two banks nixed a biotech deal six days after it started trading. Their reasoning looks defensible – an insider reneged on buying a big chunk of shares. But the Wall Street firms’ willingness to sell the stock in the first place smacks of a return of top-of-the-market laxity.

M&A shows symptoms of overheating

June 9, 2014

Global deal volume is up 63 pct this year, and Monday’s mergers hint at toppiness. Merck is justifying a 239 pct premium with optimistic revenue synergies. Tyson Foods is overpaying in its $8.5 bln sausage deal. And investors are still boosting buyers’ shares. They may regret it.

From Ally to Zoe’s, IPOs hint at back to basics

April 15, 2014

Investors had an appetite for most any new issue until last week. Six of 10 offerings couldn’t fetch the desired price and six were yanked as fear again mingled with greed. A fresh crop of sellers, including Moelis and Weibo, may encounter a more rational market than expected.

Bristol-Myers and Astra make fat bet on obesity

July 2, 2012

The U.S. and UK drug giants are teaming up in the $7 bln purchase of Amylin. Seven times estimated sales is a hefty price for a biotech whose main drugs face stiff potential competition. But Amylin’s focus on diabetes, a sadly expanding market, makes this a healthier endeavor.

Genzyme shows how it can pressure Sanofi

September 13, 2010

Genzyme is showing how it can pressure Sanofi-Aventis. The U.S. biotech takeover target moved to unload its genetic-testing arm to Laboratory Corp on Monday for $925 million. The more Genzyme can do to fix itself up, the more likely it can squeeze its French suitor to sweeten its $18.5 billion takeover bid. Firms in the sector, once in play, almost always sell. A higher bid seems likely.

Investors better off fixing, not flipping, Genzyme

January 18, 2010

Genzyme is getting a much-needed shakeup.