Breakingviews

Pharma Arbageddon fears keep traders on sidelines

April 27, 2015

Teva is after Mylan, which wants Perrigo. Such multibillion-dollar hostile deals are usually catnip for M&A punters. Recent failures have made them skittish, though. And these two battles come with cross-border complexity, antitrust and a poison pill. No wonder arbs are wary.

Teva’s $40 bln hostile bid puts hope over reality

April 21, 2015

The Israeli drugmaker needs a deal to shore up falling sales. Smaller rival Mylan offers that and oodles of synergies. A tie-up, though, would face antitrust concerns, require high leverage and have to get around a powerful poison pill. No wonder the market is skeptical.

Valeant’s $11 bln bid may have scored two knockouts

March 16, 2015

By sweetening its offer for Salix, the acquisitive drugmaker now backed by hedgie Bill Ackman put rival suitor Endo on the mat. The extra cash and a balance sheet reeling from the Allergan deal leave the business model looking wobbly. Valeant may have just rung its own bell too.

Deal junkie Valeant shoots up on $10 bln fix

February 23, 2015

The drugmaker’s pledge last year to focus on organic growth and debt reduction didn’t last long. Cost cuts and tax savings from buying Salix proved irresistible. What Valeant’s injecting isn’t clear. Salix’s numbers are fuzzy after it admitted pumping clients full of inventory.

Drugmakers unlikely candidates for next big short

February 11, 2015

Kyle Bass, a hedge fund manager who bet successfully on a U.S. housing crash, is targeting pharma companies worth $450 bln. A new method of challenging patents gives him a tool. But it’s not clear how his firm, Hayman Capital, has a leg up on existing, aggressive generic firms.

Pfizer’s generics injection lifts mood for breakup

February 5, 2015

The pharmaceutical giant’s $15 billion purchase of Hospira gives it a shot at reversing a history of value-destroying acquisitions. The injectable drug maker’s strength in non-branded medications should fortify Pfizer’s generics unit – and clear the way for spinning it off.

Shire gambles AbbVie break fee on risky $5 bln deal

January 12, 2015

The Dublin-based drugmaker is buying NPS to expand in lucrative rare drugs. The 51 pct premium is covered almost entirely by compensation from the collapse of Shire’s sale to U.S. peer AbbVie. That doesn’t much mitigate the risk of doing a deal ahead of a key regulatory ruling.

Review: An Icelandic tycoon’s sorry saga

December 19, 2014

Thor Bjorgolfsson embodies Iceland’s volcanic rise and fall. He made a fortune in post-Soviet Europe, lost a bank in 2008 and caused Deutsche Bank years of grief with Actavis. This deal junkie’s memoir is self-critical in parts - but unlikely to win many new friends in Reykjavik.

Merck bets $8.4 bln on more profitable antibiotics

December 8, 2014

For years, big pharma has left new work on bug control to small biotechs. But the mood is changing. Rising – and alarming – resistance to existing drugs and government incentives to develop new ones are injecting allure into companies like Cubist, Merck’s target.

Pharma’s dying assets lack M&A remedy

December 5, 2014

Both GlaxoSmithKline and Sanofi have scrapped sales of mature drugs. The motives differ, but both flops highlight the challenge of finding suitable owners for such assets. Other industries would spawn rollup vehicles. Here, buyers lack expertise, and sellers aren’t desperate yet.