Every so often, someone sets up a dartboard of likely targets for Big Pharma buyouts. This time, the target-setter is Barron's, and the focus is on companies with market values of $10 billion or less. Most of them have at least one marketed product: "[I]t's less dangerous playing smaller outfits with approved drugs than those with treatments still awaiting an okay from an increasingly demanding FDA," the magazine points out.
Barron's idea is a familiar one: Big Pharma needs to replenish depleted pipelines. Major drugmakers have big cash flows and big sales forces, but ailing pipelines. Small companies often have products that they haven't been able to pump up because of high marketing costs and reimbursement difficulties. Put the two together, and voila! Problems solved.
The list of 13 small drugmakers includes oft-mentioned M&A targets such as Dendreon, which makes the newly approved prostate cancer vaccine Provenge. Then there's Acorda Therapeutics, with its new multiple sclerosis drug Ampyra and shares trading at $23 or so, off from a peak of $40. And Cadence, whose injectable acetaminophen drug Ofirmev has analysts predicting peak sales of $400 million or more. A few others: Alexion, with its blood drug Soliris; Cephalon and its narcolepsy franchise; and Cubist with its antibiotic Cubicin.