Tuesday, August 2, 2016

Condor Predicts: Rumor Of Merck-Biogen Deal. . . Stays A Rumor Only

They do say "Never say never," right? But this part of the latest WSJ rumor -- as to anything more than Merck's casual and fleeting interest, at least -- seems unlikely. I don't doubt that Biogen might be being offered, and I do see the argument for an Allergan premium priced buyout -- but not so much of one, for Merck.

Biogen is a great company, but at the prices it would likely command in this hot pharma M&A market, I am not sure Merck wants to "double down" on the particularly risky Alzheimer’s pursuit. It is not at all clear that Merck's own candidate will make it all the way home, here.

So -- as I say -- I could get surprised, but I don't see Merck paying $90 plus billion to get Biogen. Allergan, on the other hand, led by Hassan protégé Brent Saunders? That I can see. I can see him chasing price, here. But as ever, we shall wait and see. Here's a bit, from Bloomberg, this evening:

. . . .“With the departure of their CEO, Biogen has put up a short-term ‘for sale’ sign indicating to interested parties that now would be a time to show interest,” Geoffrey Porges, an analyst at Leerink Partners, said by telephone. “There are other potential parties that are likely to be interested; there isn’t a pharmaceutical company on the planet that wouldn’t like to have a leading Alzheimer’s disease program.”

The Cambridge, Massachusetts, company could be worth $375 to $475 a share in a takeover, depending how optimistic a buyer is about the Alzheimer’s drug or Biogen’s future profits, said Micheal Yee, an analyst with RBC Capital Markets Corp. Brian Abrahams, an analyst with Jefferies Group, cited a potential takeout price of $400 a share. . . .

Off, into a glorious summer's evening, now. . . symphony soon -- full of all of it!


Anonymous said...

If I recall correctly, S/P had a 'part' of Biogen from way back when with alpha-IFN. If so, wouldn't that come with the S/P + Merck merger? Would that incentivize Merck picking up Biogen?

Condor said...

I think $90 billion is more than Mr.Frazier wants to pay for the Biogen portfolio -- even if they held on to the small stake via legacy S-P, from a decade ago.

But we shall see. Most of Wall & Broad is pouring cold water on either Allergan or Merck as the buyer.

Namaste do stop back!