Pharma's deep pockets means more M&A

The folks over at the Motley Fool are once again waxing positive for big pharma. 

Despite thinning pipelines, relentless job cuts and rollercoaster share prices, the Fool says the pharma companies still have plenty of cash on hand and give some numbers to prove it. For example, Pfizer has $26.2 billion in cash and short-term investments with $14.8 billion in free cash flow, and Novartis has $16.2 billion in cash and short-term investments with $14.0 billion in free cash flow. On the lower end of the spectrum, Eli Lilly has $5.2 billion in cash and short-term investments with $5.2 billion in free cash flow, which is no small potatoes, either. 

What might big pharma use all this cash for?

Acquisitions, perhaps, especially when taking advantage of some deals in the struggling-drug-developer arena. Companies might also buy more marketing rights or acquire drugs directly. Either way, the Fool says, having cash on hand--especially when its in the billions--says more than an earnings report ever will, because cash is either there or it isn't.

- read the story at the Motley Fool

Related Articles:
Pharma investing: A good bet?
Pharma cash to feed more M&A
Bid-happy analysts play matchup
E&Y forecasts new wave of biotech deal-making