Publications
Publications
- April 2023
- HBS Case Collection
Elliott Management: Capital Allocation in Biopharma
By: Amitabh Chandra, Paul Clancy and Lauren Gunasti
Abstract
The case explores the intersection of capital allocation and shareholder activism in the biopharmaceutical industry. As many biopharma companies face looming patent expirations for key medicines, the case asks the question of whether investing in R&D and M&A is an imperative. Three biopharma companies have been under scrutiny by Elliott Management, one of the largest shareholder activists for various reasons. The range of investment options for biopharma companies are outlined, including investing in the business via R&D and M&A, and returning capital to shareholders via dividends and share repurchases. The uniqueness of large biopharma companies is reviewed including enviable profit margins, significant risk in R&D, questionable perpetuity value, and the pressure from shareholder activists to prudently deploy capital.
Keywords
Citation
Chandra, Amitabh, Paul Clancy, and Lauren Gunasti. "Elliott Management: Capital Allocation in Biopharma." Harvard Business School Case 623-045, April 2023.