Today's big stories

Sanofi agreed to buy US biotech Principia for $3.4 billion
The next decade could belong to emerging market stocks, including one up 200% since March – Read Now
Chinese ecommerce giant JD.com announced a stronger-than-expected second quarter

1/3

Drug Deal

What’s Going On Here?

You didn’t hear it from us, but French pharmaceutical giant Sanofi agreed to buy US biotech Principia Biopharma for $3.4 billion on Monday.

What Does This Mean?

Sanofi’s a pretty traditional pharma outfit, so its purchase of Principia should help push it toward more innovative therapies – for multiple sclerosis, say, or a variety of autoimmune complaints – which might lift earnings growth.

Most of the world’s big pharma and biotech companies are squarely focused on producing and trialing vaccines to defeat the coronavirus pandemic. But since analysts reckon a successful drug might not be the financial blockbuster investors had hoped for, healthcare companies have had to keep their eyes peeled for other potentially growth-boosting opportunities too.

Why Should I Care?

For markets: Agreement in Principia.
Sanofi will pay Principia’s stockholders $100 in cash for each share they own. That’s only 10% more than Principia’s stock was worth on Friday, but its investors are probably doing okay: it’d already risen almost 66% this year prior to another jump on Monday. Sanofi’s shares, meanwhile, rose almost 2%. That’s surprising considering a company’s shares usually fall when it announces an acquisition – perhaps because investors worry it may have paid too much – and even more surprising considering Sanofi is paying 34 times Principia's predicted revenue in three years’ time. Still, investors might think this deal is a shrewd one: the successful development of new, more innovative drugs under Sanofi’s ownership could more than justify the big spend.

The bigger picture: Sanofi’s choice.
Sanofi’s deal is the second-biggest pharmaceutical acquisition this year (second only to Gilead Sciences’ $5 billion cancer-related purchase) and follows its purchase of Synthorx for $2.5 billion back in December (tweet this). And it might not be done yet: some analysts reckon Sanofi’s likely to spend $50 billion on acquisitions after it sold off its stake in another biotech company earlier this year.

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Nothing Ventured, Nothing Gained

What’s Going On Here?

One trillion-dollar fund manager is forecasting a “tidal wave” of investment in emerging market stocks over the next ten years, but the hottest companies won’t necessarily be today’s biggest.

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3/3

Hot Diggety Dog

What’s Going On Here?

JD.com might only be China’s second-biggest ecommerce retailer, but it’s still a very good boy: the company reported better-than-expected second-quarter results on Monday.

What Does This Mean?

JD.com’s revenue last quarter was 34% higher than the same time last year, and its profit shot way beyond last year’s too, comfortably beating investors’ expectations. The company had an almost 30% increase in active customer accounts – now totaling almost 420 million – to thank for its rising earnings, as well as a surge in cellphone-using customers who tend to buy things more often.

China’s economy was one of the first to nosedive as the coronavirus pandemic wreaked havoc across the globe, but it was also one of the first to start recovering. And while consumer spending has lagged behind government-supported industrial spending, JD.com benefited from the money that was being spent as shoppers increasingly wandered the aisles of the world wide web.

Why Should I Care?

For markets: Retail wags the dog.
JD.com’s stock – which investors can, for now, buy in the US and Hong Kong – initially rose 3% after its announcement. Investors probably appreciated its similarity to American ecommerce juggernauts Amazon and Shopify, whose sales have been boosted by the shift in consumer behavior toward online shopping even as stores have reopened. But that might be where the similarities end: Chinese retail sales data fell short of expectations again last week, while in the US, spending’s back to pre-pandemic levels.

The bigger picture: Loud bark, worse bite.
Hot on the heels of his bans on TikTok and WeChat, the US president said over the weekend that he’s now considering banning Alibaba – China’s biggest ecommerce retailer and the country’s answer to Amazon. That might spook its investors, but they’ve got Thursday’s earnings update to focus on first: the company’s expected to grow sales by 30% and profit by almost 70%.

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📚 What we're reading

Understand poker, understand the pandemic (Fast Company)
COVID long-haulers are doing their own research (MIT Technology Review)
We’re getting mad about the wrong thing (Outside)

😶 Billionaire biotech forgets about vaccines

Today's big stories

Drug Deal

What’s Going On Here?

What Does This Mean?

Why Should I Care?

Nothing Ventured, Nothing Gained

🎓 Join a millionaire trader’s free masterclass

Hot Diggety Dog

What’s Going On Here?

What Does This Mean?

Why Should I Care?

👶 Live young

📈 Join the Finimize growth team

Older messages

👾 Apple versus Fortnite

🎉 New Events: The Rise Of Young China, Self-Taught Investor & Is The Worst Over For Oil?

👻 Oil gets a little bit more frightening

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👑 Aramco loses its crown

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