After a slower year of merger and acquisition activity than expected in 2018, 2019 started off with a bang when Bristol-Myers Squibb agreed to buy Celgene for $74 billion in cash and stock — one of the largest deals in pharmaceutical history.
As healthcare investors search for innovative stocks, some of the big pharma heavyweights have been under pressure from their stakeholders to find deals to ensure stability.
Here are four drugmakers that analysts and investors expect to make a splash in M&A this year, as cited by Bloomberg.
1. AbbVie. Analysts say the North Chicago, Ill.-based drugmaker will likely have to diversify its drug portfolio as copycats of the world's best-selling drug Humira, a hepatitis C treatment, become more of a threat. Investors are urging the drugmaker to broaden its drug pipeline, and speculation has surfaced that it may look to acquire rare disease drug developers like BioMarin Pharmaceutical or Alexion Pharmaceuticals.
2. Gilead. Analysts predict the Foster City, Calif.-based drugmaker may look to expand its cancer footprint, as other drugmakers make the shift to oncology, which will likely become a highly lucrative market. Cancer-focused drugmakers, including Incyte, Clovis Oncology, Neon Therapeutics may fit Gilead's needs.
3. Merck & Co. The pharma heavyweight based in Kenilworth, N.J., has a large portfolio of immune-oncology assets, and sales of its blockbuster immunotherapy medicine Keytruda are expected to top $15 billion by 2022. While this is a huge asset for Merck, investors may want to see a deal outside of oncology, analysts said. In addition, investors are urging the drugmaker to spin off its animal health business.
4. Amgen. Although the Thousand Oaks, Calif.-based biotech has a portfolio of more than five blockbusters and recently launched cholesterol and migraine drugs, analysts predict Amgen may acquire an oncology company. Doing so would "provide a potential leap for Amgen," according to Sam Fazeli, PhD, research director of Europe, Mideast and Africa at Bloomberg Intelligence.
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