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The life sciences are among the UK’s cutting-edge sectors with a reputation for excellence.
In recent weeks, the bosses of the two British pharmaceutical giants, AstraZeneca’s Pascal Soriot and GSK’s Emma Walmsley, have reaffirmed their confidence in the UK.
Chancellor Jeremy Hunt also recognizes its importance and last year allocated £650m to support research.
So it goes against the grain that London-listed pharmaceutical innovator Indivior, which has a market value of £2bn, wants to move to the US, joining firms looking to leave London in search of a higher valuation. high.
It is true that Indivior’s main operations are located in North Chesterfield, Virginia. Both Astra and GSK have large operations in the United States but do not feel the need to change. Quite the opposite.
City quits: Indivior, a London-listed pharmaceutical innovator with a market value of £2bn, wants to move to the US, joining companies looking to leave London in search of a higher valuation.
When US rival Pfizer tried to buy Astra in 2014, it was thwarted and Astra is now worth more than its former predator.
Glaxo had the opportunity to move to the US when it merged with SmithKline, but instead chose a London listing.
The evidence suggests that companies that make the trip rarely improve their value (Arm Holdings is the big exception so far) and become tadpoles of a large group.
One might have expected Indivior’s British chairman Graham Hetherington, former chief financial officer of two FTSE 100 companies, and senior non-executive executive Juliet Thompson to have shown some public resistance.
After all, the NHS is a testbed for new compounds and the regulator, the MHRA, is developing a reputation for fast-tracking new drugs.
Indivior specializes in developing medicines to address addiction and mental health, both key areas of public policy in the UK.
Here’s the problem: to take the step, the company will need the support of 75 percent of its shareholders.
The difficulty is that Britain can no longer count on long-term investors to defend London-listed companies.
Invidior’s share registry is dominated by American funds, with New York-based Two Seas Capital being the largest shareholder with 10.21 percent.
The first registered British shareholder is Barclays Capital with 1.32 percent in 15th place, and Liontrust with 1.1 percent in 20th place.
There is no sign of a UK pension fund or a large insurer like Aviva.
The big investment traitors in the London market are long-term funds with little tolerance for risk-taking and little respect for the national interest. It is a shocking indictment of the UK’s asset management culture.
Japan is reborn
In 1999, The Guardian, my then employer, sent me to Tokyo to write about Japan’s lost decade.
The stock market had plummeted from the dizzying heights of 1986 and property prices in central Tokyo were devastated, leaving homeowners with negative equity.
Even more surprising, a miraculous economy that had enjoyed a long period of full employment was in free fall. A manicured tent city for the homeless had sprung up in a park near the Imperial Palace.
Restoring the Tokyo stock market to its peak levels has taken 34 years.
Japan has been on a path of fiscal expansion and monetary largesse. Its reputation for electronics and innovation has been sunk by the rise of China.
Throughout all of this, pioneering engineering of hydrogen cars, carbon fiber for airplanes, and production of equipment for semiconductor manufacturers continued apace.
Among the Western investors who recognized the revival was the Oracle of Omaha, Warren Buffett.
It burst into Japan in 2020, buying substantial stakes in five trading houses.
Buffett increased his holdings to 8.5 percent last year. His judgment has been vindicated when the Nikkei index closed yesterday at a record 39,098.68.
It’s time to encourage Buffett to focus on another undervalued market: the FTSE 350.
canary lloyds
The main excitement in Lloyds Banking Group’s 2023 results should have been the 57 per cent rise in pre-tax profits.
But since much of this is due to interest rate margins – the gap between what it charges borrowers and what it collects from savers and cash deposits – it hardly represents a triumph of financial genius.
More fascinating is the £450m charge for a possible redress of loans for mis-sold cars. Consumer analysts describe the scandal as the largest compensation liability since payment protection insurance (PPI).
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