Which drugmakers are likely to be the biggest dealmakers of 2014? The direct evidence is trickling in. Sanofi ($SNY) CEO Chris Viehbacher, for instance, says he's looking to spend up to €2 billion on deals next year, or about $2.7 billion.
|Sanofi CEO Chris Viehbacher|
And then there's the advice from analysts. Citi, for instance, has totted up some numbers and found that AstraZeneca ($AZN) could afford at least two decent-sized deals in 2014 without endangering its all-important dividend. With Seroquel generics still hitting sales, Nexium falling off patent next year and Crestor following that, AstraZeneca will likely look to a couple of significant buyouts to fill in the sales gap.
AstraZeneca CEO Pascal Soriot and his dealmakers have been racking up buyouts, licensing deals and partnerships, mostly to rebuild the company's pipeline. But Soriot hasn't focused much on buying in sales. Citi says that should change, and soon--and that the company could finance the necessary buyouts. "Creative corporate finance ... coupled with 'long runway' acquisitions such as Actelion could provide a useful bridge to organically fuelled growth," Citi analysts wrote in an investor note.
One potential target already providing grist for the rumor mill is Bristol-Myers Squibb's ($BMY) share of the two companies' diabetes partnership. AstraZeneca could buy out BMS, gaining full access to a broad portfolio of drugs in the fast-growing disease area. The partnership just won regulatory backing for its new combination diabetes pill in the EU, adding to the potential payoff. Then there's Actelion ($ATLN), which is popping up on various potential-buyout lists. The Swiss drugmaker could be an "intriguing" buyout target for AstraZeneca, Citi says.
Meanwhile, Viehbacher plans to use smaller deals to augment the 7 fields Sanofi already has targeted for growth. That includes diabetes, vaccines, emerging markets and rare diseases. Any buyouts won't change the overall shape of Sanofi, he told the French newspaper Le Figaro.
"I'm satisfied with Sanofi's current perimeter," Viehbacher told the paper (as quoted by Reuters). "We will keep reinforcing the growth platforms, to the tune of (€1 billion to €2 billion) per year in acquisitions. But I don't think we should widen this perimeter."
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