Biotech Values

[Shengli]

In the pharmaceutical industry, companies like Merck /quotes/comstock/13*!mrk/quotes/nls/mrk (MRK 34.48, -0.06, -0.17%) , Pfizer /quotes/comstock/13*!pfe/quotes/nls/pfe (PFE 15.90, -0.09, -0.56%) and Sanofi-Aventis /quotes/comstock/24s!e:san (FR:SAN 44.57, -0.12, -0.26%) have large sales forces and lots of drugs coming off patents. That means they need new drugs to sell. Meanwhile, the companies have a lot of cash, so they can buy biotech companies that have been developing new drugs, Gerbel explained.

Sanofi is in talks to acquire biotech firm Genzyme Corp. /quotes/comstock/15*!genz/quotes/nls/genz (GENZ 66.84, -0.74, -1.09%) , the Wall Street Journal reported in early August. See story on deal talks.

The two companies are struggling to agree on a price, according to more-recent media reports. But, given how buoyant the M&A market is, this may be a deal that's announced later in the year.

"August is traditionally the slowest month for M&A, but this year it's been huge," Gerbel said. "When people return from summer, there'll be a tremendous amount of activity late this year and early next year."


http://www.marketwatch.com/story/a-busy-august-fuels-ma-speculation-2010-08-27?pagenumber=2