Replies to post #198232 on Biotech Values

[DewDiligence]

Musings on biotech buyouts in 2016 and beyond:

http://www.wsj.com/articles/big-pharma-dealing-with-fewer-biotech-targets-1451575825

There have been more than 2,000 announced deals over the past two years within the pharmaceuticals and biotechnology sectors world-wide, according to Dealogic, for a total consideration north of $750 billion.

The pace isn’t likely sustainable… But even if volume falters, prices for targets might continue to rise. For instance, Shire continues its pursuit of Baxalta, which sports a market value of $27 billion. Amgen has said it is on the hunt for a purchase of up to $10 billion. Gilead Sciences, meanwhile, sports a pile of cash and equivalents above $25 billion…

…hunters need deals that are big enough to move the needle on growth. There are fewer of those around. For example, there are now just seven [!] companies within the Nasdaq Biotechnology Index that sport a market value between $5 billion and $10 billion…

…As the number of big targets dwindles…prices are rising. Earlier in December, AstraZeneca announced a $4 billion deal to acquire a 55% stake in closely held Acerta Pharma [#msg-119241811].