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Dec 22, 2014
via Breakingviews

More than Slim odds America Movil buys T-Mobile

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By Robert Cyran

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

Carlos Slim may try to buy the $21 billion T-Mobile US in the coming year. The Mexican billionaire needs to reduce his telephone company’s dependence on its home country. The fourth-largest U.S. wireless operator is cheap, its parent doesn’t want it, and there’s strategic logic to a deal. Increasingly frightful competition in U.S. telecoms may be a sticking point.

Dec 22, 2014

Breakingviews: Pharma toys with mutually assured destruction

By Robert Cyran

NEW YORK (Reuters Breakingviews) – Pharma is toying with
mutually assured destruction. Gilead Sciences lost some $20
billion in value on Monday morning after Express Scripts ditched
its hepatitis C treatments for AbbVie’s discounted drug. This
may kick off widespread price wars throughout the sector. Such
tactics, though, could be a strategic disaster for all
concerned.

Hepatitis C cures have been a Gilead gold mine. It launched
Sovaldi a year ago and sold $8.6 billion of the drug in the
first nine months of the year. Gilead charges $84,000 per
patient for the drug. Insurers grumbled, but paid up. Other
treatments weren’t nearly as effective and chronic disease
causes liver damage. Now AbbVie has muscled in on this turf. Its
newly approved drug, Viekira Pak, appears just as effective in
patients with the most common strain of the virus.

Dec 22, 2014

Breakingviews: More than Slim odds America Movil buys T-Mobile

By Robert Cyran

NEW YORK (Reuters Breakingviews) – Carlos Slim may try to
buy the $21 billion T-Mobile US in the coming year. The
Mexican billionaire needs to reduce his telephone company’s
dependence on its home country. The fourth-largest U.S. wireless
operator is cheap, its parent doesn’t want it, and there’s
strategic logic to a deal. Increasingly frightful competition in
U.S. telecoms may be a sticking point.

Under a recent Mexican law, America Movil’s profit
will be sapped by penalties if it holds more than half of the
country’s telecommunications market. It now has about 70 percent
of the wireless business. So it’s studying divestitures – these
could bring in over $15 billion in cash, according to UBS. And
credit markets are open and investors are willing to lend cheap
money for acquisitions.

Dec 18, 2014

Breakingviews: Rampaging animal spirits birth biotech unicorn

By Robert Cyran

NEW YORK (Reuters Breakingviews) – Rampaging animal spirits
have given birth to a biotechnology unicorn. It’s apt that a
stellar year for initial public offerings in the sector will be
capped by its biggest float ever. Juno Therapeutics is a year
old and revenue free, but its cancer fighting technology is
hot. At nearly a $2 billion valuation, the company shows
capitalism’s ability to catalyze investors’ hopes and resources.

Biotech has had a stunning run. The Nasdaq biotech index has
returned about 40 percent annually over the past three years, as
big firms have turned into fountains of profit. Analysts expect
the top five companies to earn over $30 billion in 2015, about
40 percent more than they will earn this year. That, and a
generous helping of M&A, has enticed investors onto riskier
turf. This year, 86 U.S. drug firms have gone public, according
to Thomson Reuters’ data.

Dec 15, 2014
via Breakingviews

Uber’s law flouting could bring joyride to a halt

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By Robert Cyran

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

Uber’s law flouting could bring its joyride to a screeching halt. The taxi app company is covering its drivers’ fines for illegally picking up passengers. That may be just another business expense to a firm that earned a $40 billion valuation by moving quickly and breaking the rules. But the legal, lobbying and public relations costs of reckless behavior are accelerating fast.

Dec 15, 2014

Breakingviews: Uber’s law flouting could bring joyride to a halt

By Robert Cyran

NEW YORK (Reuters Breakingviews) – Uber’s law flouting could
bring its joyride to a screeching halt. The taxi app company is
covering its drivers’ fines for illegally picking up passengers.
That may be just another business expense to a firm that earned
a $40 billion valuation by moving quickly and breaking the
rules. But the legal, lobbying and public relations costs of
reckless behavior are accelerating fast.

The strategy’s benefits are obvious from Uber’s explosive
growth and popularity among investors. The company said this
summer that revenue was at least doubling every six months, and
its market value has soared. The costs remain largely hidden,
though, a red flag considering the service’s prodigious appetite
for capital. It has raised more than $2 billion from investors
since June.

Dec 9, 2014
via Breakingviews

Merck gives in to M&A frenzy risk assessment

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By Robert Cyran 

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

The M&A frenzy appears to have influenced Merck’s risk assessment. Just hours after unveiling its $8.4 billion acquisition of Cubist Pharmaceuticals on Monday, a judge invalidated patents owned by the antibiotics maker. Potential lost sales are reflected in the billions erased from Merck’s market value.

Dec 9, 2014

Breakingviews: Merck gives in to M&A frenzy risk assessment

By Robert Cyran

NEW YORK (Reuters Breakingviews) – The M&A frenzy appears to
have influenced Merck’s risk assessment. Just hours
after unveiling its $8.4 billion acquisition of Cubist
Pharmaceuticals on Monday, a judge invalidated patents
owned by the antibiotics maker. Potential lost sales are
reflected in the billions erased from Merck’s market value.

Cubist’s biggest drug is Cubicin, which currently accounts
for nearly all the company’s estimated $1.2 billion in annual
sales. The ruling by a Delaware court means Cubist could face
generic competition in the United States as soon as the middle
of 2016, instead of waiting until 2020.

Dec 8, 2014

Breakingviews: Merck bets $8.4 bln on more profitable antibiotics

By Robert Cyran

NEW YORK (Reuters Breakingviews) – Superbugs may have
beneficial side effects – for giant pharmaceutical companies. In
agreeing to buy Cubist Pharmaceuticals, Merck
is betting $8.4 billion that the antibiotics used to fight them
will become more profitable.

In the 1990s and 2000s, big pharma lost interest in new
antibiotics. Existing drugs worked very well and were cheap, so
there seemed little reason to spend heavily to develop new ones.
Regulators demanded more stringent trials after one approved
drug turned out to have life-threatening side effects. That
raised costs further. And a perverse financial logic ruled:
antibiotics usually cure patients rapidly, limiting revenue. The
pursuit by the likes of Cubist of new ways to treat bacterial
diseases looked increasingly lonely.

Dec 8, 2014
via Breakingviews

Merck bets $8.4 bln on more profitable antibiotics

Photo

By Robert Cyran

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

Superbugs may have beneficial side effects – for giant pharmaceutical companies. In agreeing to buy Cubist Pharmaceuticals, Merck is betting $8.4 billion that the antibiotics used to fight them will become more profitable.

    • About Robert

      "Robert Cyran, U.S. tech columnist, joined Breakingviews in London in 2003 and moved four years later to New York, where he continues to cover global technology, pharmaceuticals and special situations. Robert began his career at Forbes magazine, where he assisted in the start-up of the international version of the magazine. Before working at Breakingviews he worked as a market researcher and reporter covering the pharmaceutical industry. Robert has a Masters degree in economics from Birmingham University and an undergraduate degree from George Washington University."
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