Stocks of Alnylam Pharmaceuticals escalated to 12.5 % last Thursday, when the news of acquisition activity in the biotech sector has step into another level. The stock also rose to 12% last Wednesday. The high stock performance happened when Sanofi SA, a French pharmaceutical giant, become aggressive in pursuing Medivation Inc., a maker of cancer drugs.
Six other giant biotech and pharmaceutical companies are competing to buy out Medivation. This clearly shows that biotech companies are insistent in acquiring biotech industry to strengthen their portfolio and to generate more sales.
The Roller Coaster Drama in Merger Acquisition
Sanofis interest in acquiring Medivation, emerged in the news last month. In the last week of April, Sanofi is very vocal about their bid offer of $9.3 billion to buy Medivation. However, Medivation immediately rejected the offer because the bid is undervalued considering their stock valuations.
Sanofi issued a press release statement, saying that they will take not take a “no” for an answer and they encourage their shareholders to help them strike the deal. CEO of Sanofi, Oliver Brandicourt announced that the company has turned hostile in its takeover pursuit. The company has submitted preliminary documents in the Security and Exchange Commission or SEC to completely replace its board of directors.
Brandicourt proposed eight other independent nominees that would be replacing their directors.
Sanofis has tried several attempts to win over Medivation. The fact that they go on public means they are really serious to acquire the company. In a press release statement, Brandicourt, said that despite all their efforts, Medivation has continuously decline to their offer. Thus, they are left in no choice but to change their board of directors, in the hope that this new directors will be more supportive in the acquisition. The company also hopes that this new directors will be aiming for the best interest of Medivation and its shareholders.
Other Aggressive Bidders Passionately Pursuing Medivation
Aside from Sanofi, there are also other bidders eyeing for Medivation, these include AstraZeneca Plc, Amgen Inc, Celgene Corp., Gilead Sciences Inc, Novartis AG and Pfizer Inc. These companies have expressed their interest to buy out Medivation.
The numbers of bigger companies that are interested to acquire smaller companies are on for a heated competition. Thus, smaller biotech companies are prompted to develop new and promising drugs that will make them attractive target for bigger companies.
What Makes Alnylam Another New Potential Target for Acquisition?
The public attention is more focus on Medivation because a lot of companies are trying to win them over. As how things going, it may seem that the buy-out drama becomes more interesting because the Medivation Inc. continues to stand firm and reject any offers.
This makes Alnylam a more susceptible prey for these big and established companies who are hungry to acquire new biotech companies. Alnylam, is a $6 billion company that boosts its breakthrough in RNAi platform. They proved that they have the potential in developing medicines to target several diseases.
Alnylam has focus on developing medicines for rare disease. It is expected that in two years the company will earn $127 billion. More so, drugs for rare diseases are protected by drug pricing pressures that plague drug makers and the healthcare industry over the past few years.
The company has 20 programs and they are working on RNAi technology with three treatment spheres. These include the various Hepatic Infectious Diseases that address major health challenges in infectious Hepatic conditions like Hepatitis B and Hepatitis D. They also worked on Cardio-Metabolic Diseases targeting rare illness like hypercholesterolemia and hypertriglyceridemia. They also target genetic medicines that are hoping to cure rare diseases.
Marko Kozul, Leerink Partner Analyst, mentioned that Anylam will easily generate its target revenues by 2020 because Anylam targets many rare diseases and this proves to be a billion dollar business.
David Alexandre Gros, Chief Business Officer of Anylam, has been encouraging Sanofi to take a stake in Anylam since 2014. He joined Anylam, last year and he was responsible for taking the company on the higher scale. He was the former Head of Strategy of Sanofi.
Amgen Inc may now be eyeing for Anylam because of the enormous potential of their drug portfolio. This year, Anylam stock rose to 32% making it a very good target for acquisition.
Eyeing for Smaller Cap Biotech Companies
The pharmaceutical industry is one of the most profitable yet expensive businesses. Larger and stable companies are becoming more assertive in acquiring smaller biotech companies to get a more profitable pipeline. Although, smaller companies are attractive preys, they are not giving up easily. Just like Medivation, they continue to fight for the appropriate valuation and buying amount that they deserve.
Other smaller companies are pressured to work on more innovative drugs to make them a good target for acquisition.