Good morning from the Financial Times.
Today is Tuesday, August 4th, and this is your FT News Briefing.
The boss of Novo Nordisk outlines his deal-making ambitions, and Russia is preparing a workaround for another set of EU sanctions.
Plus, the US and Japan have banded together to prop up the struggling yen, but why?
It's been nearly 30 years since we've seen anything similar to this.
So these things are super, super rare.
I'm Victoria Craig, and here's the news you need to start your day.
Shares of AstraZeneca slid on Monday as investors raised concerns about a potential mega merger with U.S. pharmaceutical giant Bristol-Myers Squibb.
That's news the FT broke on Sunday.
Possible risks to the deal include antitrust hurdles and the ultimate value of the deal.
But regardless of what happens, it probably won't be the end of dealmaking in the industry.
And that is because the pair are not the only ones with M&A on their minds.
The FT's Aaron Kirchfeld joins me now.
He recently sat down with the boss of pharma heavyweight Novo Nordisk at the company's headquarters.
Hey, Aaron, welcome back to the show.
Thanks for having me again.
Two days in a row.
Lucky us.
Mike Dustar told you that big mergers and acquisitions are not out of the realm of possibility for his company.
So what might he be open to?
Yeah, so since Mike has taken over, I think his main mantra has been kind of shaking things up at the Danish drug maker, and that includes doing deals.
And he was quite vocal when I asked him about what kind of size of deals he'd be open to, and he really said,
Deals of all sizes.
And he mentioned the fact that they had been bidding for Metzera, which was 10 billion, which he said, in my eyes, that's not even a big deal.
So he's open to doing bigger deals, even transformational ones.
He also stressed that it's not only about sizes, about what gap it fills, because for him, it's really comes down to replenishing or expanding the pipeline.
And that's a huge concern for drug makers across the industry with these so-called patent cliffs, which is when patents for drugs expire and are allowed to be made into generics.
Absolutely right.
And that's why we see a lot of M&A deals in biotech, because you see the big prime pharma companies buying up promising therapies from the smaller guys.
Or you see even like we reported over the weekend, even the biggest pharma companies looking at transatlantic mergers.
And that would add a lot of various drugs and pipelines online.
Now, when it comes to Novo, Deustar was brought in a year ago to bring about change, really to try and steady the ship.
So what has he been focused in that time, and how does he view the progress that he's made so far?
So it was almost exactly a year ago that he took over and he made some tough decisions right away, which included 9000 job cuts, which is probably the biggest ever layoffs in Denmark.
It's a country that doesn't usually do big layoffs.
And then the board was revamped and he had to lower the guidance, something that also Nova had done before he joined.
So the company was really after becoming Europe's most valuable company because they really invented or at least pioneered the weight loss therapy drugs.
They ran into stiff competition from
Eli Lilly, the Americans, as well as generic makers.
And so they brought him in really to shake things up.
And I think his big success so far has been the successful launch of the WeGoV weight loss pill.
Now, Novo is going to report earnings tomorrow.
What are we expecting?
Are we expecting to see any progress on that weight loss pill front in those results?
And how are investors feeling about the company's trajectory?
Yeah, I think we can safely assume that there'll be an update on the pill sales.
He said in June that they'd already reached 3 million in prescriptions in the U.S., which is one of the most successful launches.
Of a pharmaceutical drug in U.S. history.
And he told us in the interview that those sales have only accelerated, even though Ally Lilly has also introduced a competing pill in several markets where it's present.
So I think we can expect an update on that.
But for 2026, they expect as much as 12% decline in sales and operating profits.
So
These changes that he's making, whether it's cost cuts, whether it's acquisitions, those things all take time.
So it's all about taking shots on goal.
In his words, doing more of those will deliver more successes, even if it means having to navigate failures.
I suppose the question in the end, though, is how patient are investors and maybe even the company's board potentially going to be with this try and fail strategy?
Yeah, that's absolutely right.
I think investors are really clamoring for more details on how the company is going to diversify away from diabetes and weight-related drugs.
I think they do give them some time.
And I think the fact that the company, which is conservative by nature, went for someone who, although he had been at the organization for three decades, had never been in the HQ area.
And was the first non-Danish.
I think they will give him some time.
But as we know, investors can get pretty impatient if they're not seeing at least some results.
Aaron Kirchfeld, the FT's chief European business correspondent.
Thanks so much for your time.
Thanks for having me.
Russia has been quietly building up a shadow shipping fleet to transport liquefied natural gas.
Now, this may sound familiar because the country has been doing something similar with oil.
It's been using a so-called dark fleet of oil tankers—
To evade Western sanctions.
Now, this time Moscow is trying to get around incoming import restrictions from Europe.
And EU countries buy a lot of gas from Russia.
In fact, they bought almost
All of the Siberian plant YAML's output in the first half of this year.
Despite that, the bloc wants to cut fossil fuel revenues that are helping the Kremlin fund its war in Ukraine.
So from 2027, EU countries will be banned from importing all Russian LNG.
But this shadow fleet, which is made up of secondhand tankers as well as domestically built ones, will allow Russia to keep shipping gas despite that ban.
And that is because shadow tankers are mainly owned by Russia-linked shell companies in places like Dubai, Hong Kong, and Singapore, and they use flags of convenience to operate.
They'll also typically jam signals and conduct ship-to-ship transfers in order to disguise where their cargoes are originally from.
A country stepping into the market to support its own currency isn't rare.
But one country helping another do it?
That's a bit unusual.
It's exactly what the United States has done, though, and officials say they're prepared to do it again if needed as Japan tries to halt the yen slide.
Japan's finance ministry confirmed this week that it acted in an historic joint intervention with the U.S. Treasury.
Katie Martin, FT Markets columnist and unhedged podcast host, has been keeping tabs on this development.
She joins me now to chat through about what is happening.
Hey, Katie.
Hey, Victoria.
So just bring us up to speed.
Why was this coordinated intervention necessary?
So the yen has been falling for a really long time.
We got to the point last week where the yen was at its weakest level against the dollar in I think it's 40 years.
And so we've had various interventions from Japan to try and turn this around and try and support the yen.
And it hasn't really worked.
And the US has been getting somewhat more involved over the past few months, you know, making supportive comments about the Japanese currency.
But on Friday, it intervened directly.
And that helped to push the currency back up.
So the dollar was trading at about 164 yen at a certain point last week.
It's now down at about 155.
So in the short term, at least, it has had a decent impact.
But as you say, it's very unusual for countries to intervene in other countries' currencies.
Yeah.
When was the last time Washington actively joined Japan or any other country, for that matter, in supporting its currency?
I mean, how unprecedented is this?
So there was a point last year where the US stepped in to support the currency of Argentina in the run-up to an election.
It was very unusual, but the Argentinian peso is a very small currency.
In terms of the yen, the last time there was a really big multilateral effort to move the currency...
Was back in 2011 when there was the huge earthquake and tsunami in Japan.
And on that occasion, the entire G7 got together to push the yen lower, completely different market environment, but they all acted together to try and move the currency.
It's been nearly 30 years since we've seen anything similar to this.
So these things are super, super rare.
And it makes sense how this may help Japan.
But for the U.S., what is this about?
Is it about helping an ally?
Is it protecting financial stability?
Something else entirely?
I think it's two things.
First of all, the US likes to make a show of who its friends are.
So I think there's a geopolitical element here.
But also,
Japan has two normal ways to support the yen.
One of them is to raise interest rates really, really quickly.
And the other one is to sell dollars.
Neither of these are great for the US.
If there were a situation where Japan was selling dollars, i.e.
Selling US government bonds really quickly, then that would make what is already quite a sticky situation for the US much worse.
We've already had quite a lot of weakness in US government bonds.
So I think it's kind of a way...
To put an arm around Japan and say to the market, look, if you want to go for this currency, you have to come through us.
And that puts people off, at least to some extent, in selling the currency further.
But there's quite a lot of skepticism in markets around whether this can actually work without
Massive interest rate rises from Japan and without a big shift in the fiscal situation in Japan.
OK, so I want to know where this other piece of the puzzle sort of fits in here, because the other strange twist to this story is that the U.S. sold euros, not dollars, to make this move.
What does that tell us?
The big thing that it tells us is that if the US doesn't want Japan to be out there selling dollars and treasuries in large amounts to support the yen, it certainly doesn't want to be out there doing it itself.
The other element is that the US has a kind of pot of money that it can use for exchange rate stabilization.
And the vast majority of that is already in euros and yen.
So it's using what it's already got.
So it's not necessarily making a statement about the euro or about where it thinks the euro should be trading against the yen.
Our understanding is...
That the US side has been in contact with the European Central Bank about this, that this was not a surprise to the European Central Bank.
But again, I guess the hope is that the US can carry a big stick on this and just not have to do very much more to try and turn the tide on the Japanese yen.
Katie Martin, our unhedged podcast host, thanks so much for breaking this down.
Yeah, pleasure.
You can read more on these currency interventions and all of the stories in today's podcast for free when you click the links in our show notes.
This has been your daily FT News briefing.
Check back tomorrow for the latest business news.
