What would a Shire buy look like for Pfizer, Amgen or AbbVie? Analysts lay out pros and cons

Pfizer sign
Credit Suisse analysts say a Shire buy could pad Pfizer earnings by 28% by 2020. (Tracy Staton)

With Takeda weighing a Shire bid, other companies may be taking a hard look at the struggling biotech, too. And now, analysts have broken down just which companies might make a move, and what a deal with each could look like.

One company that pops up on nearly every list of eager pharma buyers? Pfizer. While analysts have speculated for months that the pharma giant could go after immuno-oncology rivals Bristol-Myers Squibb or AstraZeneca, the company is “often mentioned as a potential acquirer for Shire,” too, Credit Suisse’s Vamil Divan, M.D., wrote on Friday.

The reasons? The pharma giant “has a disclosed interest in rare diseases and hemophilia,” two of Shire’s specialties now that it’s folded in hemophilia player Baxalta. And thanks in part to U.S. tax reform, Pfizer could swallow Shire with ease. According to the analysts’ calculations, buying Shire could pad Pfizer’s earnings by 28% by 2020.

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For Amgen, a deal could be even better, Divan and company suggest. Their model has a deal adding 30% to Amgen’s bottom line by 2020 and expanding the California company’s international reach in the process. And like Pfizer, Amgen has “significant cash to execute a deal,” they wrote.

RELATED: Will flush-with-cash Big Pharma beat Takeda to a Shire deal?

There’s just one issue: There’s “limited overlap between the key product franchises” of the two companies, limiting cost-cutting opportunities. And a deal wouldn’t fit into Amgen’s usual acquisition range of between $10 billion and $15 billiion, either, they noted.

And then there’s AbbVie, a “surprise name” that’s come up in deal conversations with investors. AbbVie has already agreed to buy Shire once but backed out of the $55 billion pact after U.S. Treasury laws spoiled the deal’s tax advantages. Now, though, like Pfizer and Amgen, it has its own new tax advantages, which could help it pull off a buy that would kick in 25% to earnings by 2020, CS predicts.

But would it? These analysts don’t think so, despite “an expectation that AbbVie may have to boost its portfolio via acquisition” in the wake of its recent Rova-T let-down. “Our U.S. analyst sees limited … strategic rationale for a deal now,” Divan wrote.

RELATED: With big debt on tap, analysts see Takeda-Shire deal as 'more likely than not'

While the U.S.-based giants wouldn’t have to take on as much debt to finance a Shire buy as Takeda would, they also wouldn’t reap as much from a deal, according to Credit Suisse’s models. The analysts see a deal boosting Takeda earnings by an impressive 140% by 2020.

And with Takeda management signaling to analysts on Thursday that they’re willing to pay the price, some industry watchers are feeling rosier about the Japanese drugmaker’s prospects.

“We think the deal is likely because there is willing buyer, willing sellers and room to meet both sides’ expectations,” Bernstein’s Wimal Kapadia wrote to clients on Thursday.

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