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Monday’s Top Health Care Stories: Pfizer, AstraZeneca, Mylan, Forest, and Furiex

Let's check in on four companies -- Pfizer (NYSE: PFE  ) , AstraZeneca (NYSE: AZN  ) , Mylan (NASDAQ: MYL  ) , Forest Labs (NYSE: FRX  ) and Furiex Pharmaceuticals (UNKNOWN: FURX.DX  ) -- all of which could make waves across the health care sector this Monday morning.

Pfizer confirms its renewed interest in AstraZeneca
First and foremost, Pfizer just confirmed its desire to acquire British pharmaceutical giant AstraZeneca. Pfizer stated that it initially made a bid for AstraZeneca in January, and approached the company again on April 26 to renew discussions regarding a potential takeover. Shares of AstraZeneca are up about 15% in pre-market trading in response to the announcement, while shares of Pfizer are up nearly 3%.

Pfizer's initial offer on January 5, which consisted of a cash and stock offer in the combined entity, would have represented a value of £46.61 ($76.62) per AstraZeneca share -- a 30% premium over its closing price on January 3. The deal would have been one of the largest pharma deals in history with a value of nearly $100 billion.

Pfizer has been streamlining its operations ever since the 2011 patent expiration of its blockbuster cholesterol drug Lipitor, which generated peak sales of $13 billion. Pfizer strengthened its pipeline with new cancer and cholesterol drugs, sold its infant nutrition business, spun off its animal health unit as Zoetis, and has indicated ultimately that it may split its business into three distinct units -- two for branded products and one for generics.

AstraZeneca has also struggled with similar issues as Pfizer. Over the next three years, it will lose patent protection for its blockbuster cholesterol drug Crestor and the antipsychotic Seroquel, which generated combined sales of nearly $7 billion in 2013. To offset those losses, AstraZeneca strengthened its pipeline of experimental cancer immunotherapy drugs -- which are considered a top draw for Pfizer -- and acquired Bristol Myers-Squibb's stake in their joint diabetes venture last December.

Meda rejects Mylan's takeover bid
In other M&A news, Swedish pharmaceutical company Meda slipped 9% in Stockholm earlier today after the company rejected a takeover bid from Mylan worth over $9 billion. Shares of Mylan are down about 3% in pre-market.

Meda's board rejected Mylan's proposal for the second time in a month, and stated that all talks between the two companies have ended. A lack of "sufficient support" from Meda's largest shareholder, Swedish shipping company Stena Sessan, was cited as the primary reason for the rejection.

Meda -- which holds a diverse portfolio of specialty pharmaceuticals and over-the-counter products -- has been considered a lucrative acquisition target for some time. Last year, the company rejected a takeover bid from Indian generics maker Sun Pharma.

Acquiring Meda would have represented a major overseas expansion for Mylan, which generates nearly half of its sales within the United States. Mylan has recently made headway in India as Gilead Sciences' exclusive partner for branded medicines in India. It also recently launched a biosimilar version of Roche's breast cancer drug Herceptin in India with Biocon.

Forest Labs acquires Furiex Pharmaceuticals
Last but not least, Forest Labs just announced that it entered a definitive agreement to acquire Furiex, a drug development collaboration company, for up to $1.46 billion. The deal will expand Forest's growing GI (gastrointestinal) disease treatment business, which is anchored by Linzess, a treatment for constipation related to irritable bowel syndrome, and was significantly expanded through its $2.9 billion acquisition of Aptalis earlier this year.

The deal will value Furiex at $95 per share ($1.1 billion in cash) and up to $30 per share ($360 million) payable depending upon the status of Furiex's lead product eluxadoline, a treatment for diarrhea-predominant irritable bowel syndrome. Analysts at Canaccord Genuity forecast the drug to generate peak sales of $745 million in the U.S. if approved.

Forest simultaneously announced that it entered an agreement with Royalty Pharma to sell Furiex's royalties on alogliptin and Priligy to Royalty for approximately $415 million upon the successful completion of the Furiex acquisition.

Shares of Furiex are up nearly 28% in pre-market trading, with Forest Labs up about 2%.

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9/4/2015 4:06 PM
AZN $31.70 Down -0.54 -1.67%
AstraZeneca plc (A… CAPS Rating: ****
FRX $0.00 Down +0.00 +0.00%
Forest Laboratorie… CAPS Rating: ****
FURX.DX $0.00 Down +0.00 +0.00%
Furiex Pharmaceuti… CAPS Rating: **
MYL $48.05 Up +0.63 +1.33%
Mylan CAPS Rating: *****
PFE $31.37 Down -0.52 -1.63%
Pfizer CAPS Rating: ****