It’s “Let’s Make a Deal” time in biotech. For a long lineup of CEOs in the industry, this past week has marked a great time to flag their avid interest in crunching the numbers on prospective acquisitions. For several, it’s an effective distraction from some disappointing Q1 reports.
John Milligan has been saying for months now that he wants to do a deal. The Gilead CEO is sitting on more than $20 billion and has a clearly expressed interest in cancer drugs–big cancer drugs. So why tell Bloomberg that “It’s time for us to go out and do important deals” now?
The answer may lie in the slowdown in its hep C juggernaut franchise, which was set up by a jaw-dropping $11 billion acquisition back in the day. The big question for Gilead now isn’t whether it will buy something, it’s whether the company can make another winning blockbuster bet as it has before. Meeting expectations now will be a tough order to fill.
Brent Saunders at Allergan is a dealmaker at heart, and even with $10 billion now being set aside to buy back the company’s stock, he still has a $36 billion windfall coming from Teva. Now that the Pfizer megainversion attempt is history, most analysts expect Saunders is once again working the phones–if indeed he ever stopped–to continue to beef up the pipeline, adding to acquisitions that range from ambitious CNS programs to smaller deals designed to expand Allergan’s proprietary hold on facial remodeling.
Saunders has signaled repeatedly that he’s far less interested in translational research than the late-stage variety. It’s still plenty risky, but the catalysts are bigger and closer. And Saunders has shown no reluctance in putting up sizable upfront payments to get these deals across the finish line.
Then there are the big pharmas, where unimpressive financial performance has been lighting a fire under the BD execs’ feet.
Let’s start with Sanofi, which has a new CEO who’s anxious to rev up some excitement in the company’s commercial future. After executing a string of high-profile platform collaborations, Sanofi’s threatened hostile move to bag Medivation and its cancer drug Xtandi has more to do with adding revenue now than jumping back into cancer R&D in a bigger way. Diabetes revenue has turned shaky at Sanofi, and analysts won’t wait long for something dramatic to shake things up, particularly as Olivier Brandicourt moves to make his mark on the company.
Following Sanofi down the rumored trail to a potential bidding war is Pfizer and Amgen, both reportedly now given access to the books as they assess a competing offer. AstraZeneca and Novartis may not be far behind.
Pfizer CEO Ian Read, meanwhile, has an unmet corporate need to do something big on the deal side; something that can help make Pfizer look like an R&D powerhouse again.
Over at Merck, with Keytruda playing second fiddle to Opdivo in the checkpoint inhibitor market while its hep C combo Zepatier proves that it’s tough being the third big treatment to any market, the executive team knows when it’s time to get analysts buzzing with deal talk.
“Business development is a top priority, and we are actively pursuing the best external science through licensing or bolt-on acquisitions to bolster our pipeline and grow our company,” Merck’s Kenneth Frazier said in a statement that attended the pharma giant’s lackluster Q1 numbers.
For analysts, that sounds like a Cubist-sized $9.5-billion-plus kind of buyout; big enough to get the market’s attention, small enough to bolt it on operations without any huge reorganization to follow. (Though in all these deals you can bet that there will be plenty of layoffs. Synergy is calculated by job cuts in biopharma.)
Those are just the companies we know about. M&A can best be done in the shadows, if you want to keep the price in line. So there may be more going in here than the considerable amount that meets the eye. But in this season of dealmaking, talking about buyouts is also a popular way to change the subject.
By John Carroll
Source: Fierce Biotech
Avivi joins Bayer fresh off a yearlong stint as chief marketing officer of Advance Auto Parts, which followed about three years spent as marketing chief of another auto parts company, Tenneco. Rounding out her nearly 30-year career in marketing are leadership roles at consumer goods giants Kimberly-Clark and Procter & Gamble.
Air Liquide S.A. (Paris) is continuing its development with the acquisition of Homecare activities in Belgium and the Netherlands. The two entities acquired in Belgium and the Netherlands support 10,000 patients living with respiratory insufficiency, sleep apnea syndrome or requiring infusion or nutrition treatments.
US-based Vertex Pharmaceuticals has agreed to pay approximately $4.9 billion in cash to acquire Alpine Immune Sciences, a compatriot biotechnology company focused on discovering and developing innovative, protein-based immunotherapies.
