In the early hours of Monday morning, French drug giant Sanofi said it would buy hemophilia drugmaker Bioverativ, a Biogen spinout that is less than a year old, for $11.6 billion. Hours later, cancer drugmaker Celgene announced a deal for its partner, Juno Therapeutics, for $9 billion.
Will deals, as biotech investors perennially hope, beget more deals? Biotech investors seem to think so, boosting the IBB biotech ETF by more than 2 percent Monday, and the XBI (in which both Bioverativ and Juno are among the heaviest-weighted stocks) by 3.5 percent. Cue the matchmaking.
Gilead, Amgen, Pfizer, Merck and Johnson & Johnson top out the list of biggest cash holders, according to Baird Research. The list breaks out overseas holdings versus cash in the U.S. — seen as important in light of the tax overhaul giving U.S. companies cheaper access to their overseas cash piles.
Though Gilead acquired Kite Pharma last year for $11.9 billion in the year’s other major biotech deal, it’s still got $41 billion, Baird points out, as does Amgen. Pfizer’s cash, by Baird’s tally, is $24 billion, though the pharma giant has signaled it has much greater spending power than that.
As for targets? Today’s deals fall neatly into the pattern of preferred biotech buys in recent years: companies that make medicines for cancer and rare diseases.
RBC Capital Markets surveyed investors in December. Their top takeout picks: Clovis (cancer), Sage (neuroscience), Puma Biotechnology (cancer), Bluebird (rare diseases and cancer), and AveXis (rare diseases).
Source: CNBC
