High-Premium Biotech M&A Continues (AMGN, CELG, MITI, IBB)
Thursday brought yet more merger and acquisition news in the ongoing buyout trends in the biotech sector. Amgen Inc. (NASDAQ: AMGN) announced that it is going to acquire Micromet, Inc. (NASDAQ: MITI), a cancer drug maker that is German and American. …
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The Micromet deal is valued at $11.00 per share. This was a 33% premium to the prior close and shares closed up 32% at $10.94. The prior 52-week range was $4.13 to $8.90. Unfortunately for M&A arbitrage players, this deal offers no real upside in an arb-spread and it seems unlikely that a higher bid is coming based upon its share price never having gone above $11.00 today. That buyout is on the heels of a deal signed last year where Amgen agreed to an upfront payment for a discovery and development deal. Amgen is indicated around $69 after turning in 3% sales growth after the close.
Avila Therapeutics is a developer of covalent drugs in cancer and this $925 million buyout from Celgene is a cash and stock deal with $350 million of the total coming in cash. This company has AVL-292 as a inhibitor now in Phase I studies. Celgene shares are around $72.65 and are also with striking distance of a 52-week high ($75.11).
It is interesting that with two deals already having been announced in the last 24-hours that the iShares Nasdaq Biotechnology (NASDAQ: IBB) ETF was down by almost 1% at $114.71 on a day when there were two deals on the heels of another large premium acquisition this week.
JON C. OGG
Contact [email protected] for any questions or corrections.
Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. www.247wallst.com.
