Chillin' out till it needs to be funded
This next Pharma deal happened in the first week of January 2012 itself as another maker of Hepatitis C drugs in Georgia recommended
Bristol Myers’ $26 per share offer to its shareh olders. Shareholders will make a 160% gain over the weekennd on the offer price as it closed just below $10 on Friday
Bristol Myers Squibb has been loading up on buys since Plavix , almost half the sales of Lipitor, yet $ 6.7 bln worth in annual sales goes off patent this year. BMS has signed up 18 such agreements , the $2.5 bln inhibitex agreement for INX 189, in its second stage of testing with the FDA. The drug is prescribed for Hepatitis C just like Gilead’s Pharmasset acquisition for molecule PSI 7977 which is in the final phase , one ahead of the INX189 development
Thus Gilead does get a likely $5 bln ( upper end of estimates ) revenue from PSI 7977 just that little earlier, while Bristol pays market value for a drug with one more round of testing costs added. The ashare price premium here is a smoke screen as the drug’s success in the third phase could have easily returned a higher value on the exchanges itself without the acquisition
Merck and Vertex are already on the Hepatitis C bandwagon likely estimated at $ 200 bln over 5-10 years
Meanwhile Business Week suggests there is more to come from BMS
Chief Financial Officer Charles Bancroft said Bristol-Myers would keep looking for opportunities of all sizes.
“We’ve been pretty consistent in that we view our ‘String of Pearls’ across different deal sizes,” Bancroft said in a telephone interview, referring to the name given to the company’s acquisition strategy. “We’re not really dependent on size,” he said.
Roche made a $230 mln purchase of Anadys Pharma in October for Hep C drugs, while Idenix and Achillion on the East Coast ( Cambridge and Connecticut respectively) are still counted as golden goose ready to be caught and sold.