Baby Breaker Birth Announcements

Happy New Year, and welcome back to Baby Breakerdom! This week's quest to find budding Rule Breakers proves that it pays to have partners, and that private firms may do better to eschew the public markets. (The horror!)

We begin this week with Perlegen Sciences. According to its web site, Perlegen studies the genetic causes of diseases, which helps bring advanced therapies to market more quickly. Perlegen's approach has drawn the interest of many of the big pharmas, including AstraZeneca, Bristol Myers Squibb (NYSE: BMY  ) , GlaxoSmithKline (NYSE: GSK  ) , Johnson & Johnson (NYSE: JNJ  ) , and Motley Fool Income Investor pick Merck (NYSE: MRK  ) .

Now you can add Motley Fool Inside Value pick Pfizer (NYSE: PFE  ) to the list. In a deal closed the week before Christmas, the drug maker purchased a 12% stake in Perlegen for $50 million. Why, you ask? Pfizer's senior vice president for research and development told VentureWire that the company recognizes that many diseases have a "genetic component." Indeed. And that could augur well for other biotechs, especially those developing up-and-coming gene therapies.

The benefit could be even greater in light of our next bit of news. According to researcher VentureOne, venture capital-backed firms chose mergers over public stock offerings in 2005. Though the overall number of both types of deals fell, the average value of VC-backed mergers rose a dramatic 17% to $27.33 billion. IPOs, conversely, generated less than half the value they did last year, down to $2.24 billion from $4.98 billion in 2004.

Rule-Breaking investors, take note: The search for multibagger returns in 2006 could take us to firms whose assets are incredibly valuable to companies with big bank accounts -- like the big pharmas.

Sadly, there were no Baby Breaker public offerings this week, which means it's time to say goodbye. See you back here next Friday when we continue the quest to find the next ultimate growth stock.

Further Rule-Breaking Foolishness:

Netflix.Marvel. AOL. Starbucks. Find out how David Gardner landed these and other multibaggers by taking arisk-free trialto Motley Fool Rule Breakers today. You'll also learn why our analysts are smashing the market by more than 15% as of this writing. Or simplysign upnow and receiveStocks 2006, our analysts' best picks for the year ahead, free.

We're down to the wire with our annualFoolanthropydrive. From now through Jan. 6, please open your hearts and wallets to help our fiveFoolish charities.

Fool contributorTim Beyerslongs for a big bank account, though he admits that his Rule-Breaking investments are off to a good start in 2006. Tim didn't own shares in any of the companies mentioned in this story at the time of publication. You can find out what is in his portfolio by checking Tim's Foolprofile. The Motley Fool has an ironcladdisclosure policy.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 510086, ~/Articles/ArticleHandler.aspx, 10/26/2016 12:41:30 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 3 hours ago Sponsored by:
DOW 18,169.27 -53.76 -0.30%
S&P 500 2,143.16 -8.17 -0.38%
NASD 5,283.40 -26.43 -0.50%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/25/2016 4:00 PM
BMY $49.55 Up +0.32 +0.65%
Bristol-Myers Squi… CAPS Rating: ****
GSK $40.32 Down -0.36 -0.88%
GlaxoSmithKline CAPS Rating: ***
JNJ $113.96 Up +0.35 +0.31%
Johnson and Johnso… CAPS Rating: ****
MRK $61.95 Up +1.20 +1.98%
Merck and Co. CAPS Rating: ****
PFE $32.28 Up +0.15 +0.47%
Pfizer CAPS Rating: ****