The Drone Age...Christy Turlington Burns on Maternal Health...The New Model for Retail

Insights on markets, industries and the global economy [Goldman Sachs] [BRIEFINGS] May 09, 2016 Profiles in Innovation: Drones -- Flying into the Mainstream Having already made the leap from military to consumer markets, drones are starting to see an uptick in commercial and civil applications that could propel the technology to new heights. Noah Poponak of Goldman Sachs Research sees drones evolving into a $100 billion market by 2020, as they become eyes in the sky for farmers looking to identify at-risk crops, tools for firefighters targeting the hottest parts of a wildfire, production assistants for cinematographers interested in capturing new and exciting camera shots, and much more. Want more? Watch the [first video] in our Profiles in Innovation series, on the rise of virtual reality. [Watch the video] SHARE: [twitter] [facebook] [LinkedIn] [email] Talks at GS: Christy Turlington Burns -- Advancing Global Maternal Health In 2015, more than 300,000 women died from complications during pregnancy or childbirth. Though this number has declined significantly over the past 25 years, women around the world still suffer from commonly treatable maternal ailments and lack of access to basic healthcare facilities. Goldman Sachs hosted Christy Turlington Burns, the founder of Every Mother Counts, to discuss her innovative approach to improving maternal health and the global fight against maternal mortality at a recent Talks at GS session. "There is no silver bullet for maternal health," she says. "[We emphasize] what we do know and what can be scaled." [Watch the video] SHARE: [twitter] [facebook] [LinkedIn] [email] Whenever, Wherever: The New Model for Retail Does the rise of e-commerce mean traditional brick-and-mortar retail is on the way out? Not quite, says Kathy Elsesser, global co-head of Consumer Retail and Healthcare Investment Banking. "Retail has always been about more than selection, price and speed. It's about the experience," she notes. "The result is that retail and e-com are converging to put the consumer at the center." On the latest episode of our podcast, Exchanges at Goldman Sachs, Elsesser discusses the evolving role of e-commerce in the retail universe and why retail companies are so frequently the target of activist investors. [Subscribe on iTunes] [Listen to the podcast] SHARE: [twitter] [facebook] [LinkedIn] [email] Briefly... on a Bright Spot in Deal-Making: China's M&A Streak Despite a slowdown in deal-making this year, one of the bright spots has been China's strong streak of M&A and other strategic activity. Recent deals included Lazada Group's $1 billion sale of a controlling stake in the company to Alibaba Group Holding; Syngenta's $43 billion sale to ChemChina; and General Electric's $5.4 billion sale of its appliance unit to Qingdao Haier. Overall announced M&A volumes for China exceeded M&A volumes in the UK, Japan and Australia in 2015 (see chart), and the level of Chinese outbound M&A in 2016 has already nearly reached 2015 record levels. Goldman Sachs' Pawan Tewari and Barry O'Brien, who work on M&A transactions in the technology, media and telecom sector within our Investment Banking Division, share their thoughts on recent changes in the landscape. What are some of the secular and technical drivers behind the current trends? Pawan Tewari: We're witnessing government-led initiatives to reduce industries with overcapacity and heavy environmental impact. There is a focus on a broad range of industries from high tech and industrial sectors, to consumer, real estate and media. Chinese buyers are looking to gain access to technologies to improve domestic manufacturing competitiveness which will, in turn, help capture a larger share of profits in the value chain. There is also a desire to acquire marquee international brands and to provide consumer goods and services to a rising urban middle class. All of this has been aided by the large amounts of capital available from government, strategic and financial entities. Lastly, certain technical factors, such as the dynamics around valuations of stocks traded on Chinese exchanges and currency trends, are also contributing to record levels of activity. What role have financial sponsors played in recent transactions? Barry O'Brien: Chinese state-owned enterprises have long dominated M&A activity given their resources and connections, but we're increasingly seeing more of the private sector get involved. In recent transactions we've advised on, Chinese public companies and financial sponsors have been much more active, sometimes even teaming up to form consortiums. In particular, the Chinese private equity firms have proven themselves to be very sophisticated operators, acting like US financial sponsors in transaction execution, structuring and financing. So we've seen an increasingly diverse range of Chinese entities involved in global M&A, and they are demanding expertise on the ground in China as well as deep experience in executing complex cross-border deals with different types of counterparties. What are some of the trends that you have seen in recent M&A transactions? Pawan Tewari: More Chinese companies seem to be proactively trying to anticipate the concerns of US company boards as they consider transactions. In addition to regulatory and financing considerations which are being addressed through contractual terms, Chinese buyers are anticipating other key issues, such as risks to completion, transparency and speed of decision-making. The complexity -- and regulatory intricacies -- of these cross-border transactions often require global expertise to navigate. Cancer's Biggest Foe: Immuno-Oncology Poised for Huge Growth More than a year after calling immuno-oncology "the most exciting development we have seen in the cancer field in decades" and the science that should "do away with chemotherapy," Goldman Sachs Research's Jami Rubin has updated her patient-driven market model and significantly increased her associated estimate of the market's future size. Immuno-oncology drugs -- which aim to permanently retrain the immune system to fight cancer cells rather than targeting the cancer cells directly -- have been able to improve outcomes in a way traditional therapies have not. Rubin now expects these drugs to generate $35 billion in revenue in 2025 ($15 billion higher than her patient-driven model predicted in March of last year) as they continue to demonstrate strong results in non-small cell lung cancer, melanoma and renal cancer and broaden to three new applications (bladder, head and neck and small cell lung cancers). And she doesn't see the list ending there -- longer term she expects immuno-oncology drugs to be used to fight triple negative breast cancer, multiple myeloma and more. [Podcast with Jami Rubin] [Talks at GS on immuno-oncology] SHARE: [twitter] [facebook] [LinkedIn] [email] Goldman Sachs Media Highlights Bloomberg - May 3 [David Solomon speaks on the M&A market and tech valuations] (8:06) Business Insider - May 4 ["The Retail Industry Is Transforming, But Not the Way You Think It Is"] Bloomberg - May 6 [Francesco Garzarelli talks oil, negative rates and the European bond curve] (1:10) Business Insider - May 6 [Edith Cooper on the firm's approach to interviews] Sky News - May 8 [Goldman Sachs International adds new directors] [Subscribe] The data provided in this newsletter is for information purposes only and should not be construed as investment or tax advice nor as a recommendation to buy, sell, or hold any particular security. Goldman Sachs believes the data in this newsletter is accurate, but does not verify its accuracy independently and does not warrant or guarantee that it is accurate or complete. 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