This week's tweet of the week on Biotech Banter comes from LifeSciGuy, who says:
Party like it's 2011. HCV still the dominant M&A driver for sector? Not sure if that's a good thing. Need torch passed to something else.
He's of course talking about Merck's (NYSE:MRK) recent acquisition of Idenix Pharmaceuticals (UNKNOWN:IDIX.DL), which follows a couple of large acquisitions in 2011 by Gilead (NASDAQ:GILD) and Bristol-Myers Squibb (NYSE:BMY).
While an acquisition frenzy is certainly a good thing for investors as it drives up valuations, hepatitis C is a bit of a unique situation because Gilead, Bristol-Myers Squibb, and Merck needed to add drugs to their pipelines to make more potent cocktails.
As senior biotech specialist Brian Orelli and health-care analyst David Williamson discuss in the following video, hot areas such as nonalcoholic steatohepatitis and cancer immunotherapy might be acquisition targets, but we may not see the frenzy we've witnessed with hepatitis C, where the acquired drug increases the value of the drugs already in the pipeline. Just because your competitor has a nonalcoholic steatohepatitis or cancer immunotherapy drug doesn't necessarily mean you need one of your own.