Biotech Values

[ciotera]

If we believe that BMS got outbid by Gilead in the Pharmasset deal, then it explains why BMS may have gone a little too far with Inhibitex to avoid a similar outcome. The other suitor could be Merck, Abbott, BI or someone else with deep enough pockets but enough common sense to stop when valuations get ridiculous.

I think it's wrong to assume that the next nucleoside acquisition is going to fetch similarly high premiums. First of all, the quality of what's left is lower. Second, there are likely not enough interested deep-pocketed parties left for another bidding war (so an aquisition may happen but at a lower valuation because it's more likely to go unchallenged). And third, the next cohort of potential acquirers (if there is one) has shown that they approach this space more conservatively than BMS and Gilead, and rightfully so, considering that they are getting a little late to the game at this point.