Finance

Huge Drug (Pharma) Money Changes Hands In High-Level Financial Deals—Why?

Huge Drug (Pharma) Money Changes Hands In High-Level Financial Deals—Why?

These are notes on money-musical-chairs among drug companies. Big-time money.

Clues as to why there is such a tidal wave of cash:

One: Consolidation, of course. Fewer giant companies, who have greater control over the market, are too big to fail, and have more lobbying power with governments.

Two: The companies are making deals left and right to temporarily give stockholders and prospective investors the impression that “something good” is happening, while concealing the fact that numerous new drugs in the testing pipeline are failing to produce beneficial results, and are unsafe. Sleight of hand.

Three: The companies are making very favorable loan deals with banks, enabling them to buy out other drug firms. Before the loan repayments are completed, the companies will have sold themselves (and the debt) to bigger fish.

Four: A drug company knows its development of a new drug is fraudulent, and is riddled with illegal practices, such as lack of informed consent in recruiting volunteers for clinical trials. So it sells the research unit for that drug to another company, making it their problem.

Here are $$ details. Follow the astonishing money trails.

From: https://www.fiercepharma.com/m-a/sanofi-advent-international-nearing-eu2b-deal-for-european-generics-business-report:

“Other bidders may have dropped out of an auction for Sanofi’s European generics unit, but that doesn’t mean it hasn’t found a buyer. The drugmaker is nearing an agreement and could announce a sale in the next several days, Bloomberg reports.

“Sanofi’s board could meet as soon as Monday to vote on a deal worth about €2 billion ($2.48 billion), according to the news service’s sources. Of course, the sources note that the deal isn’t final and that it could ultimately fail to materialize.

“The news follows previous decisions by private equity firm Nordic Capital and Indian drugmaker Torrent Pharma to bow out of negotiations, worried that the unit is too pricey, according to press reports. PE firm Carlyle Group and Brazil’s EMS remained in deal talks through final bidding, according to Bloomberg.

“And that’s not the only deal Sanofi has had in the works. The company has been toiling to reshape itself for several years, and as part of that effort on Monday sold 12 “noncore” pharma brands to Cooper-Vemedia for €158 million, a spokesperson confirmed.

“The drugmaker talked about selling the business in 2015, but CEO Olivier Brandicourt made other M&A moves after coming on board instead. In 2016, Brandicourt offloaded Sanofi’s animal health unit Merial in an asset swap with Boehringer Ingelheim, getting BI’s consumer health business in return.

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