Biotech Values

[DewDiligence]

Addendum on BMY’s buyout vig: Although the CEO transition effectively rules out a near-term sale of the company, BMY retains a considerable amount of deferred buyout vig, IMO.

The new CEO, Lamberto Andreotti, is 59—only a few years younger than the outgoing CEO—and Andreotti is not exactly from central casting.

A buyout in a couple of years at $40/sh would not be at all surprising, IMO. BMY has an impressive portfolio and pipeline for a midsized firm, and the market cap is small enough to be digestible by one of the big Big Pharma.