More Evidence Big Pharma Ready To Acquire Biotechs (MRK, PFE, WYE, GILD, BMY, LLY, SGP, CELG, GENZ, BIIB)

January 7, 2009 · Filed Under M&A 

We have covered on numerous occasions about how the larger Big Pharma companies either need to or have signaled an openness to making acquisitions in the biotech sector or in the smaller drug companies.  Today it was Merck & Co. (NYSE: MRK)  out speaking and testing the waters to see how Wall Street would react if it decides to go make a decent buyout.  The company said at a Goldman Sachs investor conference in New York that it has the resources to make to significant acquisitions.

Merck’s $62 billion market cap does not allow the company to go after ANY deal it chooses.  Here were the estimated sizes of the drugs and biotech players we noted earlier this week when Pfizer was out testing the waters.  Actually, these are the ones with market caps that are far enough under that of Merck:

Stock (Ticker)                              MktCap
Wyeth (WYE)                                $51.1B
Gilead Sciences Inc. (GILD)          $47.5B
Bristol-Myers Squibb Co. (BMY)  $47.3B
Eli Lilly & Co. (LLY)                      $46.1B
Schering-Plough Corp. (SGP)       $28.2B
Celgene Corporation (CELG)        $25.9B
Genzyme Corp. (GENZ)                $18.4B
Biogen Idec Inc. (BIIB)                  $14.1B

But Merck’s top brass left some wiggle room as well.  The drug giant said that if it doesn’t make any big purchases, then it will return cash to shareholders through dividends or share buybacks.

The company said that “strategic opportunities” would be a key priority for 2009.  He reiterated an interest in acquiring a biotech company that would boost the company’s flat revenues as well as its pipeline of experimental drugs.

Jon C. Ogg
January 7, 2009

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