Were I a member of the tinfoil hat brigade, I might suspect that Pfizer (NYSE:PFE) had been reading my mind. Thursday morning, the company swiped an item from the very top of my to-do list: buying promising biotech company VicuronPharmaceuticals (NASDAQ:MICU).
Of course, Pfizer has slightly deeper pockets than I, so it bought the whole kit 'n' caboodle. At $29.10 a share in cash, or $1.9 billion total, Vicuron shareholders get a nice payday -- a nearly 84% premium to yesterday's close and a 21% premium to its all-time high.
Vicuron focuses largely on anti-infectives, with two applications for new drugs under review at the Food and Drug Administration. One, anidulafungin, is intended to treat fungal infections and recently showed superiority to fluconazole in a phase 3 study. The other compound, dalbavancin, is an antibiotic targeted toward gram-positive infections. The present NDA for dalbavancin covers skin and soft-tissue infections.
The deal makes sense for Pfizer despite its high sticker price. Each of Vicuron's current NDA drugs look capable of achieving more than $100 million in annual revenue, and Vicuron has an intriguing early-stage pipeline as well. Vicuron should be a powerful addition for its new owner, especially given Pfizer's demonstrated R&D and marketing prowess with anti-fungal and antibiotic medications such as Diflucan, Vfend, and Zithromax.
I'm sure analysts will fall over themselves predicting "the next wave" of big pharma-biotech buyouts. But I don't buy that thesis. There really haven't been many "waves" of biotech M&A, and I don't expect that to change. I would expect pipeline-challenged companies like Merck (NYSE:MRK) and AstraZeneca (NYSE:AZN) to at least consider buyouts of biotechs with imminent products, but I'd expect more partnerships and collaborations than outright purchases.
Since I had Vicuron shares at the top of my wish list, this is a bit melancholy for me -- it would have been nice if Pfizer had held off long enough for me to book a nice 84% gain, too. On the plus side, my biotech valuation model had Vicuron's value pegged at about $28 a share, so at least I can pat myself on the back for accuracy.
Let's not forget one of the more important lessons here -- patience is good, but if you snooze, you lose. However good my model was, I still made exactly zilch on this one.
We've prescribed more biotech Foolishness:
- Patented Drugs Fair Game in R&D
- Chiron's Credit Conundrum
- Finding Biotech's 50-Baggers
- Vertex's Cautious Optimism
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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares), but he really, really wishes he had.
