Jami Rubin - Goldman Sachs

The long goodbye

Name: Jami Rubin
Title: Analyst, Goldman Sachs

Last year, it became a lot harder to find a Big Pharma company that hadn't made a move to divest assets. The enthusiasm for pharma breakups hasn't cooled. One Goldman Sachs analyst deserves credit for showing them how.

"The status quo is not working; bigger is not better," Jami Rubin wrote in a 2011 note titled "Breaking up is Easy to Do." The note spurred calls for several big drugmakers to divest: Abbott, Pfizer, Sanofi, Merck, Novartis and GlaxoSmithKline were among them. Within the same year, Sanofi ($SNY) had sold its dermatology business to Valeant ($VRX) for $423 million. Early in 2012, Pfizer ($PFE) was looking to go beyond the pending sale of its nutrition and animal health businesses. Rubin had been pushing Pfizer to divest since she initiated coverage with Goldman in 2008.

In 2013, more firms would discover parting's sweet sorrow. 

Abbott ($ABT) kicked off the year by splitting in two, setting up its research pharmaceuticals business as a new entity, AbbVie ($ABBV), and retaining the Abbott name for its medical products business. Glaxo ($GSK) sold Ribena and Lucozade to Suntory for $2.1 billion in September. As the year drew toward a close, Novartis sold its blood transfusion diagnostics unit to Grifols for $1.68 billion. That followed Merck's October signal that it would look to pare $2.5 billion in non-core areas. Deals to sell off its Saphris, Akorn and Sirna units swiftly followed.

Even Johnson & Johnson ($JNJ)--flung far and wide from Band-Aids to biotech--moved to divest in 2013, selling its Ortho-Clinical Diagnostics unit to the Carlyle Group in a $4.15 billion deal it announced last month. In 2012, Rubin had cut J&J to "sell" for failing to follow its Big Pharma peers into a breakup strategy.

Last year was a big one for Big Pharma divestiture. It was also the year Goldman made Rubin a partner. She joined Goldman in 2008 from Morgan Stanley, after covering pharma with Kidder, Peabody & Co. in the 1990s. 

Today, Merck ($MRK) and Novartis ($NVS) are reportedly in talks to do a multibillion-dollar swap of Merck's consumer health business for Novartis' animal-health and vaccines units swap units--that is, if they find no higher bidder among a growing group circling the deal.

Big Pharma's pruning season seems to be rolling into another year. When will the dealmaking slow down? You can bet that any number of pharma executives and investors are waiting for Jami Rubin's cue.

-- Galen Moore (email | Twitter)

For more:
No breakup for J&J? Goldman analyst says 'Sell'
J&J should split itself three ways, Goldman analyst says

Jami Rubin - Goldman Sachs

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