Biotech Values

[ghmm]

Sounds to me like someone who is finding the going price too high. Don't know whether "if" was used before or not. They didn't mention the GILD buyout of MYOG of the deals to me it seems LLY got the best value for the dollar at least in the near term.

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BE1E52282%2D1C51%2D4FFF%2D9C93%2D809E9F74B67...

Schering CEO: Drug M&A prices "breath-taking"

BOSTON (MarketWatch) - Schering-Plough Corp. Chief Executive Officer Fred Hassan said Wednesday that the prices being fetched in the recent wave of big pharmaceutical takeover bids are "breath-taking," and are reflective of how difficult it is for large companies to acquire quality drug candidates.
"The prices that are being paid by our competitors are breath-taking," said Hassan, in an interview with MarketWatch on Wednesday. "They would've been unthinkable five years ago."
Indeed, the price tags attached to the most recent deals appear to underscore Hassan's observations.
On Monday, Merck & Co. (MRK) announced it was paying a 102% premium for research group Sirna Therapeutics (RNAI) , which has yet to bring a product to market, in a deal worth about $1.1 billion in cash. Merck said it made the bid to gain a greater foothold in the promising area of RNAi research.
Merck's offer came just about two weeks after Eli Lilly and Co. (LLY) said it planned to buy biotech partner Icos Corp. (ICOS) , which co-markets its erectile dysfunction drug Cialis, for $2.1 billion in cash.
Big Biotech has also gotten into the game. In mid-October, Genzyme Corp. (GENZ) outbid Millennium Pharmaceuticals (MLNM) for AnorMed Inc. (ANOR) , agreeing to pay $580 million in cash for the development-stage company. The attraction, said Genzyme, was AnorMed's Phase III drug candidate Mozobil, which is being tested for use in stem cell transplantation in cancer patients.
According to Hassan, the takeover craze has been fueled by recent rash of patent expirations on some of the industry's biggest-grossing products, such as Merck's Zocor, Bristol-Myers' Pravachol, and Pfizer's Zoloft.
"The industry's R&D engines are struggling to keep up with the expirations," said Hassan, noting that the trend towards acquisitions has been in place for some time.
Hassan added that the windfalls seen by companies under the American Jobs Creation Act of 2004, which allowed U.S. companies to repatriate foreign profits at a special tax rate, has also powered the trend.
Under the measure, companies can use the cash for such purposes as mergers and acquisitions.
As for Schering-Plough (SGP) , Hassan said the company doesn't feel as strong a need to make a major merger or acquisition deal, "as our existing products [patents] go into the next decade."
Schering-Plough also hasn't been eager to jeopardize its highly-touted financial turnaround, which has been roundly credited to Hassan, in order to pursue a pricey deal. The company has recently returned to profitability after spending significant time in the red.
"Our financial discipline has been preventing us from doing deals recently," said Hassan.
If Schering-Plough were to pursue an acquisition, he said, it would be to complement its existing therapeutic product areas: cancer, inflammatory illnesses, hepatitis C, cholesterol-maintenance, and respiratory conditions.
But Hassan also thinks the company can grow with its existing pipeline. When asked which drug candidates he saw as being the biggest potential revenue drivers, he pointed to a blood-thinner currently in Phase II clinical trials that the company hopes will either rival or be used in combination with Bristol-Myers' blockbuster drug Plavix.
He added that three other major opportunities include its HIV treatment vicriviroc, currently in Phase II testing; a protease inhibitor to battle hepatitis C, also in Phase II; and golimumab, a Phase III candidate to the company hopes will be a successor to its popular rheumatoid arthritis drug Remicade.
When asked about rumors that Schering-Plough is eyeing a possible merger with Bristol-Myers Squibb (BMY), Hassan declined to comment.
"But it's nice that we're doing so well that people are talking about us that way," he added. End of Story