Biotech Values

[DewDiligence]

PKI—A couple of months ago you made mention to AZN's huge goodwill and intangible amounts as a proportion to the total assets and retained earnings.

Almost any company who has made one or more major acquisitions will have large line items on the balance sheet for goodwill and intangible assets. However, AZN’s balance sheet is unusual for such a large company insofar as NAV stripped of intangibles and goodwill is negative (#msg-80110943).

PKI's goodwill and intangible amounts are very comparable. Why no concern?

Acquisitions are an integral part of PKI’s business model—you could say it’s a “roll-up” biotech company; thus, the accumulation of goodwill on the balance sheet is inevitable.

However, unlike AZN’s buyout of MEDI, which destroyed shareholder value, PKI’s acquisitions have generally been accretive to cash flow and non-GAAP EPS.