Biotech Values

[DewDiligence]

Re: ENTA buyout vig

…with the recent drop in ENTA’s stock price its market cap is now a mere $1.2 billion [EV <$1B]... What do you think the odds are that ABBV buys ENTA?

ABBV is one of several companies who could benefit from buying ENTA. Almost any profitable drug/biotech company with a P/E ratio of ~16+ would find that acquiring ENTA—at a price as high as $110/sh—would be immediately accretive to EPS, making reasonable assumptions about cost synergies.

If the prospective suitor had an R&D office in the Boston area—as certain profitable biotech companies and most Big Pharma do—an acquisition of ENTA would make even more sense insofar as ENTA’s drug-discovery scientists would be more likely stay on with the acquiring company.