miércoles, 17 de junio de 2020

Rumored Gilead-AZ make sense?

  • AZN trades at a high multiple buoyed by pipeline optimism and strong growth trajecto
  • Very little therapeutic overlap with GILD makes a combination scenario lacking in strategic logic.
  • GILD has a more troubled pipeline outlook, and it makes much more sense for AZN to go it alone given their rosy prospects.
  • Although it would be EPS accretive given prevailing rates, a strong ROI is very unlikely given the premium to be paid and the Remdesivir run-up in GILD's price.
  • The synergies do not seem to be there for this combination to ever become more than just a rumor.


Six years ago, AstraZeneca CEO Pascal Soriot fought off Pfizer’s $118 billion takeover attempt. Now, the defender is reportedly playing offense, going after a deal of similar size. 


AZ "con flores a...." GILEAD.

The British pharma informally approached Gilead Sciences last month to gauge its interest in a merger, Bloomberg reported, citing people familiar with the matter.

Gilead, whose stock price has climbed about 17% this year on news its remdesivir can tackle the novel coronavirus, was worth $96 billion at Friday’s close. AstraZeneca, with a University of Oxford COVID-19 vaccine project, comes with a market cap of about $140 billion. At the current value, the deal, if completed, would set a new record for pharma M&A, eclipsing Bristol Myers Squibb’s $74 billion acquisition of Celgene last year.

That’s a big if. According to Bloomberg, the talk was in very early stages, as AZ didn’t detail any specific terms and Gilead hasn’t made a decision on how to move forward.

The U.S. biotech doesn’t seem interested in selling. It’s focused on forming its own partnerships and completing smaller acquisitions rather than considering a merger with a big pharma company, the people told the news service.

At least two Wall Street analysts were skeptical of a potential deal. “We do not view this deal as likely,” Jefferies’ Michael Yee wrote in a Sunday note to clients. He pointed out that Gilead believes its HIV franchise, led by fast-growing Biktarvy, is underappreciated and “would prefer to build value over time and do its own tuck-in deals.”(Más)

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