Biotechs May Seek 2012 Acquisitions for Growth
By Meg Tirrell, Ryan Flinn and Jeffrey McCracken
Bloomberg.com
Jan 6, 2012 12:01 AM ET
Amgen Inc. (AMGN) and Celgene Corp. (CELG) may dive into deal-making this year as the biggest biotechnology companies seek to return to the industry’s high-growth roots.
Amgen and Celgene are trying to boost investor returns that have lagged behind peers and may have to compete with traditional acquirers from the pharmaceutical industry, such as New York-based Pfizer Inc. (PFE) and Bristol-Myers Squibb Co (BMY), to do it. In the past five years, the Nasdaq Biotechnology Index has risen 36 percent while Amgen, the world’s largest biotechnology company, fell 6 percent and Celgene gained 18 percent.
The biotechs have historically been less active than their pharmaceutical industry counterparts. Bristol-Myers has completed 17 acquisitions (BMY) since 2007, a period in which Amgen had nine and Celgene three.
“We expect the large biotechs to be active acquirers in 2012,” said Henry Gosebruch, managing director of health-care mergers and acquisitions at JPMorgan Chase & Co. (JPM) “Investors have rewarded strategic acquisitions that enhance long-term growth and companies that continue their history of developing innovative therapies, as opposed to turning into dividend- paying, share-repurchase type low-growth stocks.”
Amgen, based in Thousand Oaks, California, will see a smorgasbord of potential targets next week at the 30th annual J.P. Morgan Healthcare Conference in San Francisco.
The meeting will draw 8,000 attendees and 395 presenting companies, according to its host. Bristol-Myers and Pfizer, the world’s largest drugmaker, will join Amgen, Celgene, based in Summit, New Jersey, and Biogen Idec Inc. (BIIB), of Weston, Massachusetts, in scouting trips that often pack 200 meetings into the week.
.
.
.
Amgen, with a market value of $56.5 billion, declared its first quarterly dividend last year, and announced a $10 billion buyback program, promising to return more value to stockholders. It’s not enough for investors, RBC’s Yee suggested.
.
.
.
Potential Targets
Companies with market values of $3 billion to $10 billion may be the most likely targets for larger biotechs, JPMorgan’s Gosebruch said. That’s a shift from 2010, when French drugmaker Sanofi pursued Genzyme Corp., the largest maker of medicines for rare diseases, in a deal worth $20.1 billion that closed last April.
.
.
.
While biotechnology stocks outperformed the broader market last year, newly public drugmakers and companies trying to sell new products found conditions more difficult, ripening their takeover prospects.
.
.
.
Full story: http://www.bloomberg.com/news/2012-01-06/amgen-may-join-gilead-as-biotechs-seek-acquisitions-to-grow.html
Gold is $1,581/oz today. When it hits $2,000, it will be up 26.5%. Let's see how long that takes. - De 3/11/2013 - ANSWER: 7 Years, 5 Months
| 