It's nice to have cash. It allows you to buy things like unusually cheap stocks or companies of which you already own 56%. Unfortunately for Roche, not having cash seems to be making it hard to close its $45 billion deal for Genentech
Not everyone is having problems closing their deals, though. Eli Lilly
Cash is king and it's allowing companies to swoop in and get some good deals.
Johnson & Johnson
Check out these players in the pharmaceutical field.
Cash and short-term investments (billions) |
|
---|---|
Pfizer |
$26.0 |
Wyeth |
$14.2 |
Johnson & Johnson |
$14.8 |
GlaxoSmithKline |
$9.9 |
Novartis |
$8.1 |
Source: Capital IQ, a division of Standard & Poor's. As of the quarter ending September 2008.
That's a lot of cash that could be deployed. To put it in perspective, the companies above could pay double the current market caps for Amylin Pharmaceuticals, Elan, Onyx Pharmaceuticals, Genzyme, Seattle Genetics, and PDL Biopharma, and still have plenty left over as a cushion.
In Warren Buffett-like fashion, pharmaceutical companies have been hoarding cash -- patiently waiting for good prices. And it looks like that time has arrived. There are a lot of drug developers that have been knocked down even though the prospects of their pipelines haven't changed very much.
Enjoy your holiday shopping, pharma.