Finimize - 💉 The future of pharma

What’s going on here?

Data shows Big Pharma’s been signing off tons of deals this year – if you can read the handwriting, that is.

What does this mean?

Deals haven’t been dealt much this year, with companies more focused on slimming costs to survive these dicey days. So Big Pharma’s really standing out, pouring $85 billion into acquisitions during just the first five months of the year. That’s more than the industry’s spent on deals in the same timeframe for the last couple of years. But this isn’t just retail therapy: the patents of many pharma firms’ best-selling drugs are due to expire fairly soon, which would leave them vulnerable to generic drug-making competition. One solution is to fortify their pipelines with new drugs, and the firms certainly have the funds: the world’s biggest pharma companies held more than $1.4 trillion from pandemic-crazed sales between them at the start of the year.

Why should I care?

The bigger picture: Not quite a cure-all.

Regulators are clamping down though, suing to block Amgen’s $28 billion takeover of Horizon Therapeutics last month. Keep that up, and innovation could be squeezed dry. See, a major reason investors buy into small biotech firms – outsized contributors of high-risk drug research and development – is the hope that a bigger firm will snap them up later. But if dealmaking’s under threat, the little guys might not get the investment they need to make the drugs of tomorrow.

Zooming out: Diamonds in the generic drug rough.

Still, that wasn’t enough to put Novartis off: the drugmaker agreed on Monday to buy Chinook Therapeutics for over $3 billion. The deal could bring two promising rare kidney disease treatments to market, and soon: one of them’s due to report results in the next few months. And because rare disease treatments tend to have a high price tag, the twosome could work magic on the firm’s bottom line.

What’s going on here?

German industrial firm ThyssenKrupp gave plans to publicly list its green hydrogen business an emission-free green light on Monday.

What does this mean?

There have long been mutterings – presumably laced with plenty of mispronunciation – that ThyssenKrupp would list Nucera, its hydrogen business. And this one’s a biggie: Nucera makes electrolyzers, a type of tech that produces hydrogen without the dirty emissions. That’s got the potential to decarbonize emission-heavy industries like steel and chemical-making – and the US and European governments are well aware, both boasting legislation that favors the green tech. ThyssenKrupp’s hoping the listing will raise around $650 million from other admirers too, enough to spur on investment and cement Nucera as a leading electrolyzer supplier.

Why should I care?

For markets: Investors love mone– sorry, the planet.

A successful listing could signal a turnaround for ThyssenKrupp, after a rough few years for the flailing industrial giant. So far, there’s plenty of promise: hydrogen tech could fuel the broader green transition, and development’s still only in its baby stages. Investors seem sold: they’ve sent ThyssenKrupp’s shares up 24% this year in anticipation of the listing, and you can bet any investors looking for “pure-play” green hydrogen investments will snap up Nucera too.

The bigger picture: It’s what’s inside that counts.

If you’re unconvinced, just take a look at EVs. Their fuel may be better for the environment, sure, but their bodies are made of all the same bits as their gas-guzzling equivalents – and a lot of carbon goes into making all that metal. So for starters, green hydrogen could clean up the steelmaking industry’s act. And for entrées, the sector’s top dogs are serving up social responsibility: reports out Monday showed that Rio Tinto and China Baowu Steel – the world’s biggest iron ore miner and top steel producer respectively – have signed an agreement to explore more green solutions in one of the world’s most polluting industries.