There has already been a spat of M&A deals this year, but analysts see the $7 billion acquisition of Amylin in a complex deal by Bristol-Myers Squibb ($BMY) and AstraZeneca ($AZN) as the spark to ignite even more.
AstraZeneca Chairman Simon Lowth has already told the Financial Times that the structure on the Amylin deal gives it the flexibility to do more deals and that "There is considerable opportunity out there." The company is trying to find ways to recover from losing the patent on its antipsychotic drug Seroquel.
Bristol-Myers will pay $31 per share, or about $5.3 billion, and kick in another $1.7 billion in to pay off debt. Then AstraZeneca will pay Bristol-Myers $3.4 billion to share risk and profits on Amylin's diabetes-drug expanding its current alliance with BMS.
The London Evening Standard reminds that Shire ($SHPGY) has been seen as a potential AstraZeneca buy, with analysts split on whether the Amylin purchase makes that less likely now.
Seamus Fernandez, of Leerink Swann & Co., tells Bloomberg he thinks AstraZeneca, along with Pfizer ($PFE) and Merck & Co. ($MRK) are all three likely to be doing deals to try and buy some "top-line growth."
"We are on the cusp of the next consolidation wave," after a pause last year, says Fernandez. "Now, I think we are going to see a re-acceleration in that number."
This year, there have been four announced acquisitions of biotechs for more than $1 billion, and one takeover attempt that's still active, Bloomberg reminds. AstraZeneca already took over Ardea Biosciences Inc. for $1.26 billion in April, getting gout and cancer drugs that are in development. Bristol purchased Inhibitex in January for $2.5 billion to get its hands on experimental hepatitis C medicines. Agilent Technologies paid $2.2 billion for Danish cancer-diagnostics maker Dako and GlaxoSmithKline is still fencing with Human Genome Sciences over its $2.6 billion bid for that company.
Just for starters, Piper Jaffray tells its customers there are other companies that seem like buy-out targets as well, today listing BioMarin ($BMRN), Affymax ($AFFY), Theravance ($THRX), and Rigel Pharmaceuticals ($RIGL). It even says it thinks Japanese drugmaker Takeda is the likely buyer for BioMarin, at $79 a share.
- read the Bloomberg story
- here's the Financial Times story
- get more from the London Evening Standard
- here's the Piper Jaffray prediction
Special Report: 2012: Year of the dealmaker in biopharma
Bristol-Myers, AZ aim for diabetes glory with Amylin buy
Amylin's up for bid. Who'll step in line?