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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

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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.

Dec 5, 2014

Breakingviews-Uber flips the bird at critics with convertible

By Robert Cyran

NEW YORK (Reuters Breakingviews) – Uber is really flipping
the bird at critics with its latest financial deal. The taxi
app’s valuation soared to $40 billion in its latest funding
round. But a plan to issue securities that convert to stock at a
discount to its eventual IPO price shows how firmly Chief
Executive Travis Kalanick remains in the driver’s seat. Uber can
raise money at a potentially massive premium.

After a top executive said the company could look into media
critics’ personal lives and families, Kalanick apologized. Now
he’s telling its detractors off, Silicon Valley-style, by
raising vast sums of money at ever-escalating valuations.

Dec 5, 2014
via Breakingviews

Uber flips the bird at critics with convertible

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By Robert Cyran

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

Uber is really flipping the bird at critics with its latest financial deal. The taxi app’s valuation soared to $40 billion in its latest funding round. But a plan to issue securities that convert to stock at a discount to its eventual IPO price shows how firmly Chief Executive Travis Kalanick remains in the driver’s seat. Uber can raise money at a potentially massive premium.

Nov 19, 2014
via Breakingviews

Uber is one startup that needs to grow up fast

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By Robert Cyran

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

Uber is one startup that needs to grow up fast. The Silicon Valley taxi app’s disregard for rules has spurred it toward a $30 billion valuation. But executives who threaten to “dig up dirt” on critics, use unsavory tactics against rivals, and post statistics on customers’ one-night stands present an existential business risk and hurt its fledgling brand. Uber needs to rein in its laddish impulses.

Nov 13, 2014
via Breakingviews

Buffett’s $4.7 bln Duracell deal a double positive

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By Robert Cyran and Kevin Allison

The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

Warren Buffett’s $4.7 billion Duracell deal is more positive than negative. Berkshire Hathaway is paying for its latest acquisition by trading its stake in Procter & Gamble for the consumer stalwart’s battery unit. Swapping a reliable staple for a declining business looks odd. But the transaction is structured in a way that means both sides are getting a decent deal.

Nov 3, 2014
via Breakingviews

LabCorp deal tests positive for value destruction

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By Robert Cyran

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

Laboratory Corp of America’s $6.1 billion deal for Covance tests positive for value destruction. The strategic logic behind adding the clinical trial outsourcer to the firm that checks patients’ blood and other fluids is hazy. Shareholders’ financial diagnosis is damning, too. They swabbed some $700 million off LabCorp as cost cuts fell far short of the 32 percent premium paid.

Oct 30, 2014
via Breakingviews

Tim Cook’s pride may expand corporate talent pool

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

Tim Cook’s pride may expand the corporate talent pool. The Apple chief executive’s decision to speak publicly about being gay should help advance the slow march toward acceptance. As boss of the world’s biggest company by market value, Cook could inspire others, giving C-suites and boardrooms more choice. They need it.

Oct 28, 2014
via Breakingviews

Sky-high valuations no match for earnings reality

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By Robert Cyran

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

Sky-high valuations are no match for the sober black-and-white of quarterly earnings. Investors knocked more than 10 percent, or well over $3 billion, off Twitter’s worth in early trade on Tuesday despite a third-quarter report on Monday that showed sales doubling from a year earlier. Blame the company’s overdone valuation. Twitter trades at more than 100 times its own “non-GAAP estimated earnings” measure. Other U.S. companies on high multiples have suffered a similar reality check.

    • 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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