Investing

Looking for the Next Biotech Buyout After Two Drug and Biotech Deals

What usually happens when you get two mergers announced in drugs and biotech in the same day? Investors begin to wonder which other peers and competitors might be on the M&A block. Monday’s news flow brings a $1.9 billion total buyout of Par Pharmaceutical Companies Inc. (NYSE: PRX), which values the company at $50.00 per share, by private equity firm TPG. Another deal being touted is Human Genome Sciences Inc. (NASDAQ: HGSI) being near to accepting a buyout from GlaxoSmithKline (NYSE: GSK) at $14.00 per share.

The most recent deal in the biotech and emerging pharma sectors was Amylin Pharmaceuticals, Inc. (NASDAQ: AMLN) finally being acquired at a large premium by Bristol-Myers Squibb Co. (NYSE: BMY). The more than $5 billion deal was almost 50% higher than the price that analysts valued the company. So, who is next? 24/7 Wall St. has a regular list of merger candidates in biotech and emerging pharma, and here are some of the possible candidates. We have added color on each, if applicable.

First and foremost, it is important to consider who the buyers will generally be. Companies like AstraZeneca PLC (NYSE: AZN), Sanofi (NYSE: SNY), Merck & Co. (NYSE: MRK) and Bristol-Myers Squibb Co. (NYSE: BMY) were all Amylin suitors, and Pfizer Inc. (NYSE: PFE) was reportedly interested before backing out due to valuation of the company. Celgene Corporation (NASDAQ: CELG) recently was cited as a possible buyer of Human Genome Sciences Inc. (NASDAQ: HGSI) to fill its pipeline and to regain some momentum. Will Celgene look elsewhere?

Vertex Pharmaceuticals Inc. (NASDAQ: VRTX) often arises as a possible takeover name, but it is worth about $11.2 billion in its market capitalization, and that would put it on the high side of biotech M&A values. Shares have been very volatile on drug news of its own, as well. The Thomson Reuters consensus target of $66.40 compares to a share price of $52.85 and a 52-week high of $66.10.