Breakingviews

Abbott’s $25 bln buy inspires little investor hope

April 28, 2016

It’s buying medical-device maker St. Jude at a $6.5 bln premium. Cost cuts cover less than half that, and earnings accretion doesn’t make it a good deal. Abbott’s value tumbled over $5 bln. Shareholders may recall that the target’s namesake is the patron saint of lost causes.

Valeant plays chicken with death spiral

March 15, 2016

The pharma company’s failure to file audited results has started a countdown to default that vaporized 40 pct of its market value in early trading. Executives are mulling selling assets. But with so many questions about its financials unanswered, Valeant’s outlook is bleak.

Alere board’s diligence brings 51 pct premium

February 1, 2016

A $5.8 bln sale to $56 bln healthcare group Abbott caps a series of good decisions. Appointing a separate chairman, jettisoning Alere’s deal-hungry founder, rejecting his low-ball bid and focusing the business all helped. It shows what engaged investors and directors can achieve.

Healthcare M&A will wear down in 2016

January 4, 2016

Obamacare and tax avoidance spurred over $550 bln of U.S. deals in 2015. That’s three times more than the previous record. With the obvious combinations already struck, acquisitive companies hurting and trustbusters sharpening their pencils, a repeat will be challenging.

Theranos’ wounded credibility hobbles all unicorns

December 21, 2015

The blood-analysis company faces new charges of finagling with its herpes test, a product essential to its success. Unless the firm wins vindication from independent experts, the damage may be too serious to fix. That harms similar startups, whose survival depends on trust.

Sanofi and Boehringer scratch each others’ backs

December 15, 2015

The French pharma group is swapping its animal health business for the consumer arm of the German company. The 23 billion euro deal helps both while avoiding the risk of expensive M&A. Boehringer may have a marginally better deal, but Sanofi’s need is probably greater.

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.