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.

Biotech firm’s stock buyback emits bad bouquet

November 12, 2015

NantKwest wants to snap up a large chunk of stock at a big discount to its July IPO. Yet the biotech controlled by Patrick Soon-Shiong needs the money as it’s likely to burn cash for years. A buyback would, though, prop up the price ahead of an expiring lockup for executives.

Shire pays up for easier prey than Baxalta

November 2, 2015

The UK pharma group is offering $6 bln for rare-disease drugmaker Dyax while biding its time for an eventual swoop on Baxalta. The deal relies on bold assumptions and could take years to pay off. Shire is good at M&A, but a weak share price shows market support can’t be assumed.

Testing simplifier Theranos complicates governance

October 29, 2015

The Silicon Valley blood-analysis firm, ostensibly worth $9 bln or more, trimmed its director ranks, formerly packed with wise men from the U.S. government and military. But now it has sprouted three boards. That contrasts with the clarity Theranos seeks for hematology.

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.

Investors coax Walgreens Boots to swallow Rite Aid

October 27, 2015

Scooping up the No. 3 U.S. drug chain strengthens $98 bln Walgreens as it battles domestic leader CVS. Antitrust is an obvious question given the rough ride Staples has faced with Office Depot, but the hurdles look manageable. Shareholders are certainly not worried.

How Theranos Hoovered up $9 bln of influence

October 27, 2015

CEO Elizabeth Holmes persuaded a clutch of bigwigs like George Shultz to join her board, tapping the roster at Stanford’s world-improving think tank. Theranos’ headline valuation shot skywards. But the wise old men don’t seem to be helping now that things are looking shaky.

Double Pac-Man healthcare M&A contains triple risk

October 20, 2015

AmSurg wants to be king of U.S. doctor outsourcing. The $3.8 bln firm made an unsolicited $5.3 bln offer for TeamHealth while also backing its target’s agreed purchase of another company for $1.4 bln. The double gulp raises the odds of overpaying, buying a dog, or poor execution.

Valeant’s platform trembles beneath Ackman’s feet

October 19, 2015

The hedge fund manager bought a 5.5 pct stake because Valeant offered a cure for poor capital allocation by drugmakers. Now it’s scaling back on acquisitions, raising R&D and limiting price increases. The outsiders missed the political benefits to pharma’s spending.

Blood test casts doubt on unicorn valuations

October 15, 2015

The promise of faster, easier blood diagnostics allowed Theranos to raise money at a $9 bln price tag. The details of the firm’s technology have never been clear and have now been called into question by a WSJ report. It’s easier for questionable valuations to thrive in private.