AbbVie wins Pharmacyclics race

BY Richard Summerfield

Biotech company Pharmacyclics has agreed to be acquired by Chicago based rival AbbVie in a deal worth around $21bn.

Under the terms of the deal, Pharmacyclics shareholders will receive $261.25 per share of the company held. The offer is comprised of a mix of cash and AbbVie equity, and the transaction is expected to close by mid-2015.

AbbVie was a late entrant to the race to acquire Pharmacyclics, beating out competition from Johnson & Johnson and a third, unnamed party to secure the deal. The three way contest for Pharmacylics was driven by interest in the company’s crown jewel – Imbruvica – a cancer drug which could make an important impact on the oncology sector. The company expects US sales of Imbruvica to hit $1bn in 2015, however by 2020 worldwide sales are forecast to reach $5.8bn.

"Team Pharmacyclics is honoured and enthusiastic to join the AbbVie organisation. We share a common purpose. Together and as one, our focus remains to create a remarkable difference for patient betterment around the world," said Bob Duggan, chairman and chief executive of Pharmacyclics, in a statement announcing the deal.

"The acquisition of Pharmacyclics is a strategically compelling opportunity. The addition of Pharmacyclics' talented and innovative team will add enormous value to AbbVie," said Richard Gonzalez, chairman and chief executive of AbbVie. "Its flagship product, Imbruvica, is not only complementary to AbbVie's oncology pipeline, it has demonstrated strong clinical efficacy across a broad range of hematologic malignancies and raised the standard of care for patients."

The deal continues the trend of significant M&A transactions in the pharma and biotech sectors in 2015 to date. With announced deals including Pfizer’s purchase of Hospira for $17bn, Valeant’s acquisition of gastrointestinal drugmaker Salix for $14.5bn, and Shire's $5.2bn deal for NPS Pharma, M&A in the pharma and biotech  reached $70bn by the beginning of March - more than double the level of activity seen in the same period last year.

News: AbbVie to Pay $21 Billion for Pharmacyclics, Maker of a Promising Cancer Drug

European real estate industry “awash with capital” and set for busy 2015

BY Fraser Tennant

A busy and profitable 2105 is the outlook for the European real estate industry, according to the new 'Emerging Trends in Real Estate' Europe 2015 report published by PwC and the Urban land Institute (ULI).

The report, which features the views of 500 industry experts (investors, fund managers, developers, property companies, lenders, brokers, advisers and consultants), lists a number of cities which are considered to offer significant real estate investment opportunities this year. The cities, many of which were badly affected by the economic downturn, include Madrid, Athens, Birmingham, Amsterdam, and Lisbon.

According to the report, 70 percent of investors expect to see more equity and debt flowing into their markets in 2015, while 82 percent are of the opinion that “the availability of suitable assets will have a moderate or significant impact on their business this year".

However, despite such optimism, the report makes clear that major concerns remain with fragile economic conditions, weak fundamentals, and volatile geopolitical scenarios cited as the reasons for such uncertainty.

“Real estate investors will face a tricky balancing act in 2015," said Simon Hardwick, real estate partner at PwC Legal and one of the authors of the report. “The market is awash with capital surging into Europe from around the world. On the face of it, this is a nice problem to have, but we expect to see prices continuing to rise due to a shortage of assets. And despite an uncertain economic climate across Europe, investors will have to look beyond the major markets to secondary cities and assets they may not have considered before. This presents both an opportunity and a challenge.”

Lisette Van Doorn, chief executive of the ULI Europe, added “As confidence has returned to global real estate markets over recent years, there has been a progressive movement up the risk curve. Investors have found prime assets expensive and hard to source, and have in turn looked to find new opportunities in recovering secondary cities, secondary assets and development opportunities, as well as new or alternative real estate classes."

Now in its 12th edition, the 'Emerging Trends in Real Estate' Europe report forecasts real estate investment and development trends, cities, property sectors, and real estate finance and capital markets trends.

Report: Emerging Trends in Real Estate Europe 2015

KPMG showcases 100 of world’s best infrastructure projects

BY Fraser Tennant

One hundred of the world’s most innovative, inspirational and impactful infrastructure projects are showcased in KPMG’s new ‘Infrastructure 100: World Markets Report’.

A result of in-depth discussions with a panel of independent industry experts from across the globe, the report focuses on infrastructure in four key markets: mature International markets, economic powerhouses, smaller established markets, and emerging markets.

Hundreds of global projects were considered by the panel before the final 100 were selected.

Assessments were based on the following criteria: (i) scale – how does the scale of the project relate to similar developments in its class?; (ii) feasibility – is the project plan feasible and sustainable?; (iii) complexity – how challenging or complex is it to get stakeholder support?; (iv) innovation – is there a particular challenge the project overcomes?; and (v) impact on society – does it improve quality of life or promote economic growth?

Some of the global projects featured in the report include: Hinkley Point C Nuclear Power Station (UK); George Massey Tunnel replacement (Canada); Southern SeaWater Desalination Plant (Australia); the Scandinavian 8 Million City (Norway); Buenos Aires Bus Rapid Transit Corridors (Argentina); New York City Resiliency Plan (US); and Moscow-Kazan High Speed Rail (Russia).

Transformational, with the capacity to change the face of nations and drive economic growth, the value of global infrastructure projects is estimated by KPMG to be in the region of US$1.73 trillion.

Referencing the key trends driving global investment in the infrastructure sector, Richard Threlfall, KPMG’s UK head of infrastructure, building and construction, said “Our latest showcase of projects from around the world highlight the vision, determination and innovation required to drive economic prosperity and social impact through infrastructure development.

“Each country has its own approach to developing and funding infrastructure, yet all share the challenge of creating the right conditions to attract investment. We see infrastructure investment improving lives, creating opportunity, and bringing the world closer together – ultimately creating a better world”.

Report: Infrastructure 100 World Markets Report

Sub-Saharan Africa to receive $180bn a year investment in infrastructure over 10 years

BY Fraser Tennant

Investment in infrastructure projects in Sub-Saharan Africa is expected to be $180bn a year over the next 10 years, according to a new PwC report.

The 'Capital Projects & infrastructure in East Africa, Southern Africa and West Africa' report suggests that, despite slow growth overall, multiple investment opportunities await global investors, developers and operators.

The 95 influential figures in the infrastructure sector surveyed by PwC indicated that they planned to spend 25 percent more on infrastructure projects this year than last. Fifty-one percent said that they planned to spend more than half of their budgets on new assets.

At present, South Africa and Nigeria have the most ambitious infrastructure programs and together make up almost 60 percent of the spend across Sub-Saharan Africa.

"The shallow economic recovery in most developed markets has shifted the focus to faster-growing regions. This is also true for the infrastructure development sector,” said Jonathan Cawood, capital projects & infrastructure leader for PwC Africa. "With an abundance of natural resources and recent mineral, oil and gas discoveries, demographic and political shifts and a more investor-friendly environment, the investor spotlight shines brightly on Africa."

Despite Cawood’s optimistic outlook, a number of key challenges face those looking to invest in the continent, including: (i) the limited availability of skills; (ii) a lack of internal capacity among state organisations to plan, procure, manage and implement capital infrastructure projects; (iii) the impact of political risk and government interference during project lifecycles; (iv) access to funding; and (v) an inhibiting regulatory environment.

Mr Cawood continued: "Infrastructure plays a key role in economic growth and reducing poverty having a 5-25 percent per annum return on investment as an economic multiplier. Those countries that have been most successful in developing and maintaining infrastructure have established programmes of prioritised investment opportunities with a number of features, including clear political support, a proper legal and regulatory structure, a procurement framework that can be understood by both procurers and bidders, and credible project timetables.”

As a relatively unexplored region with large natural resources, Sub-Saharan Africa is a hot spot of infrastructure investment potential.

Report: Trends, challenges and future outlook: Capital projects and infrastructure in East Africa, Southern Africa and West Africa

Africa rising

BY Richard Summerfield               

Although a lingering sense of scepticism surrounds the continent’s development, Africa’s economic outlook is on the up according to a new EY report. New-found confidence in Africa has been built on the impressive economic growth rates recorded by many country's across the continent.

EY’s report, ‘Africa 2030: Realising the possibilities’, builds on the firm’s previously Africa-centric series, ‘Africa Attractiveness’, which has been highlighting progress over the last 15 years. The report notes that, as a result of the last 14 years of sustained growth across Africa, the continent’s relative attractiveness as an investment destination has increased dramatically. The sub-Saharan region in particular has seen a jump in foreign direct investment (FDI), with projects growing at a compound rate of 19.5 percent between 2007 and 2013.

Looking to the future, entrepreneurship is likely to be a key driver of economic growth and job creation in Africa as we move toward 2030. EY expects that new products, services and problem solving will also help to drive the job creation needed to generate inclusive and sustainable growth.

Yet, despite the optimism, future success across the continent is in no way guaranteed. “There are still many challenges ahead, not least of which is a robust structural transformation — required across many economies — that will not only lessen dependency on commodities, but also expand the private sector, increase productivity levels and, most of all, create jobs,” says the report.

Report: Africa 2030: Realizing the possibilities