|
Drug makers seen eyeing Bristol
2006-09-13
Several of the world's top drugmakers may weigh acquiring Bristol-Myers Squibb Co. (NYSE:BMY) after it fired its chief executive, although suitors seem unlikely to bid before next summer, analysts said. While Sanofi-Aventis SA (SASY.PA) of France, its long-time partner on the blockbuster drug Plavix and the world's No. 3 pharmaceuticals manufacturer, is seen as the most likely buyer, others are also expected to be interested. "I think a lot of people will feel they have to look at it," said Paul Diggle, an industry analyst at Nomura Code Securities in London. Bristol-Myers on Tuesday forced out CEO Peter Dolan, under pressure from a federal overseer who called for Dolan's ouster after looking into a failed deal to delay Plavix competition. The New York-based company, which by policy does not comment on market speculation, replaced him on an interim basis with board member James Cornelius -- an appointment that intrigued analysts because the former Guidant chairman helped engineer the medical device maker's sale to Boston Scientific Corp. (NYSE:BSX) Merrill Lynch analyst David Risinger counts Sanofi, Pfizer (NYSE:PFE), Merck & Co. (NYSE:MRK) and GlaxoSmithKline Plc (GSK.L) as potential contenders. Shaojing Tong of Mehta Partners named Glaxo, Europe's biggest drugmaker, the "ideal candidate." Acquiring Bristol-Myers would jump-start Glaxo's cardiovascular offerings by adding Plavix, which treats blood clots, and Avapro, a blood-pressure drug, while also boosting its cancer-treatment franchise, Tong said. Such a deal would also provide huge cost-cutting opportunities for the British company as it faces generic competition over the next few years, Tong said. "The size of Bristol -- you can squeeze out a lot of costs," Tong said. Glaxo has looked at Bristol-Myers in the past but rejected the idea of a bid, according to other industry analysts. Risinger said in a research note that Switzerland's Novartis AG (NOVN.VX) is unlikely to be in the running because of the clash between Novartis' leukemia drug Gleevec and Bristol-Myers' Sprycel, which would lead to antitrust problems. Novartis itself has said it has no plans for big deals. Its head of pharmaceuticals told a broker conference on Tuesday that a big acquisition would not be advisable, since it has seven potential drug launches pending in the next two years. For Sanofi's chairman Jean-Francois Dehecq, a veteran deal-maker, the chance may be too good to miss, said Julien Dormois, an analyst at independent European boutique investment firm Bryan Garnier. "In our view, Sanofi-Aventis is the most likely suitor, but such a transaction is not realistic before 2007," he said. "The first reason for Sanofi-Aventis to acquire BMS would be to leapfrog Pfizer to become the world's largest drugmaker." In the short-term, analysts deemed a takeover unlikely because of continued uncertainty over Plavix, which has comprised about 30 percent of Bristol-Myers' profits. Bristol-Myers will begin a patent infringement trial against Canadian drugmaker Apotex Corp. in January, with a ruling not expected until perhaps at least next summer. The outcome could determine whether Bristol-Myers will retain exclusive U.S. rights to the drug until 2012 -- or face immediate generic rivals that would cripple sales. "The problem with Plavix is the drug is still at risk from a patent perspective," Natexis Bleichroeder analyst Jon LeCroy said. "No one really is going to want to pay for the company while that is being processed through the courts." Bristol-Myers also is operating under a deferred prosecution agreement, under which the U.S. government is monitoring the company's conduct, following a probe of an inventory scandal. The agreement, which also could turn off buyers, is expected to end in June 2007. John Farrall, a health care analyst with National City Private Client Group, which holds about $100 million in Bristol-Myers shares, said any possible takeover would not happen for at least six to nine months. In his view, such a wait would be a good thing. "As a shareholder, I would like to see them get their house in order, so if a bidder does emerge it's based on their strengths rather than the recent scandals," Farrall said.
|  | | | Profile |
News76 | Gallery | Links | |
| |
|
|
| 
