Spec pharma is built to be acquired -- hostilely or otherwise.
Yesterday Valeant Pharmaceuticals
Or at least, Cephalon isn't interested in rushing into anything. It's undertaking its own strategy of bulking up. Since the beginning of the year, it's announced acquisitions of Gemin X Pharmaceuticals and ChemGenex Pharmaceuticals, and an option to purchase a drug from Alba Therapeutics. The hunter has become the hunted, as it were.
Cephalon's share skyrocketed on the news. In fact, they're trading a couple of bucks above the $73 offer. Investors are either expecting Valeant to raise its offer or for another company to start a bidding war. Both are possible, but neither seems extremely likely at this point.
Valeant's CEO Michael Pearson made it very clear that he wouldn't overpay. "While we are willing to consider a higher price if due diligence supports this, we will remain very disciplined on price," he said on the conference call. Of course, sanofi-aventis
As to a white knight coming over the top, Valeant's offer is 29% higher than Cephalon has traded over the last 30 days. Someone will need to see a lot of value in the company.
Big pharma has expressed interest in purchasing spec pharma -- Pfizer
While mergers and acquisitions aren't all that surprising in the spec pharma space, I'm a little surprised that Valeant's shares are up 10% today. Since the company hasn't actually bought anything, is knowing that you've got a management team looking for good deals really mean the company is worth 10% more?
Keep up with the Valeant and Cephalon drama -- I'm sure it's far from over -- by clicking here to add the companies to your watchlist.