Genentech's No-Win Merger Situation (DNA)
Genentech (NYSE: DNA) was delivered the worst, or at least the second worst, bit of news it could have received. Late this week Roche delivered a crushing blow by lowering the offered acquisition price. This puts Genentech in a nearly untenable situation.
Roche already owns 55.8% of the Genentech outstanding shares and intends to commence a cash tender offer for all outstanding publicly-held shares to commence within approximately two weeks. Roche also intends to make the tender conditional upon a non-waivable condition that holders of at least a majority of the outstanding publicly-held Genentech shares tender their shares in the offer, that Roche can obtained sufficient financing, and other issues.
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Pfizer Tests Waters For Major Acquisitions (PFE, AMGN, WYE, GILD, BMY, LLY, SGP, CELG, GENZ, BIIB)
It hasn’t taken long for the speculation machine to roll down Wall Street in 2009. A report from the FT over the weekend shows that Pfizer Inc. (NYSE: PFE) is willing to acquire some large rivals. We believe that this is a mere testing of the waters by the company now that its troubles have been persistent, but we also gave a whole list of these stocks in pharma and biotech which we feel are large enough to make an impact at the company. You can see our full synopsis on this at 24/7 Wall St. and here is the list of the names we included:
Stock (Ticker) MktCap
Amgen Inc. (AMGN) $62.5B
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
JON OGG
January 5, 2009
Are Generic Drug Makers Entering Merger Frenzy After Teva/Barr?
Barr Phamaceuticals Inc. (NYSE: BRL) actually turned out to be a real merger. Teva Pharmaceutical Industries (NASDAQ: TEVA) has agreed to acquire the generic US-drug maker in a merger valued at $7.46 Billion in cash and stock. The breakdown is $39.90 cash and 0.6272 shares of TEVA for total of $66.50 before any dilution. This is after the stock closed up more than 23% yesterday on reports that Teva was interested in buying the company.
Teva is a huge generic drug makers and it has some of its own brand name drugs. What you have to wonder is just how many other mergers are out there that could actually come to pass in the generic sector. Generics are likely to do well in sales as a sector because of medical and health care cost containments and because so many key blockbuster drugs are coming off of patent in 2009 to 2011.
On an individual basis these companies are essentially stepping on each others’ toes as they frequently get FDA approvals for the same drugs as other generic companies after the brand drugs come off patent. It also doesn’t help when brand drug Big Pharma companies decide to sell their brand drug for the same price as generics after they come off of patent.
So maybe mergers in the generic drug sector are inevitable. Here is a list of some of the larger generic drug companies:
- Mylan, Inc. (NYSE: MYL) $3.9 Billion market cap,
- Watson Pharma (NYSE: WPI) $3.1 Billion market cap,
- Par Pharma (NYSE: PRX) $610 million market cap.
As a reminder, there was a time period where King Pharmaceuticals Inc. (NYSE: KG) was trying to merge with Mylan, Inc. (NYSE: MYL). All of these stocks are trading up marginally so far this morning as of 10:00 AM EST.
Jon C. Ogg
July 18, 2008
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