The Allergan megadeal speculation--now featuring Gilead--just won't stop

Allergan has shown recently that it may just plan to stick to the “stepping stone deals” script it’s been talking up--at least, for now. But that hasn’t stopped industry watchers from concocting megadeal scenarios for the serial buyer.

The latest idea? That the Dublin drugmaker may target Gilead, whose $107 billion market cap is quite a ways off of the heights it reached last year.

But even with that decline--of about $70 billion--in mind, the Big Biotech isn’t exactly an easy company to swallow--particularly for Allergan, which was still shouldering $33.2 billion in debt as of its Q2 earnings call, Bloomberg Gadfly’s Max Nisen notes.

And while Allergan also had $27.56 billion in cash at that time, the company has already unveiled four deals this month, and it’s wrapping up a $5 billion share buyback, too.

Those deals include two that Allergan announced this Tuesday, both for companies developing NASH candidates. And that NASH focus was what spurred Gabelli & Co. analyst Kevin Kedra to posit a tie-up with liver specialist Gilead in the first place.

Kedra isn’t the only one throwing the possibility out there that Allergan may have another whopper transaction up its sleeve, though. Earlier this month, CEO Brent Saunders dismissed the suggestion that Allergan buy embattled former suitor Valeant, and in August, he tamped down rumors that his company was eyeing a Biogen buy.

Focusing on smaller deals isn’t “a new strategy, despite our image ... in the market,” Saunders said at the time.

Allergan doesn’t have that image for no reason. After all, its track record from the past couple years includes the $66 billion accord that turned Actavis into Allergan--and then there was last year’s $160 billion megamerger agreement with Pfizer, which, though ultimately canceled, may be hard for some to forget.

At least for now, though, Saunders is making good on his “stepping stone” promises. In addition to the  NASH deals--a $50 million buyout agreement for Akarna Therapeutics and a $1.7 million pact for Tobira--Allergan also in September agreed to pick up small-cap dermatology biotech Vitae and gene therapy specialist RetroSense for $639 million and $60 million, respectively.

- get more from Bloomberg Gadfly

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