Actelion says it doesn't need big buyouts as billion-dollar rumors simmer

Actelion CFO André Muller

Fast-growing biotech Actelion said it's not desperate for a big deal but hasn't ruled out its reported $2.5 billion effort to snatch up the smaller ZS Pharma ($ZSPH).

"We don't need M&A," Actelion Chief Financial Officer André Muller said in an interview with Reuters, adding that buyouts are "not a fundamental aspect of our strategy." That said, the company has regular discussions with 7 or 8 potential targets, he added, plus it's sitting on more than $730 million in cash and has a steady stream of income thanks to the expectations-exceeding performance of the pulmonary arterial hypertension (PAH) treatment Opsumit.

Muller's words echo the long-held party line at Actelion, which has for years been the subject of takeout rumors going both directions. Analysts have penciled in the company as a potential target for larger entities including Shire ($SHPG), all while talking up the Swiss drugmaker's opportunities to expand its pipeline with buyouts of its own.

Last month, Actelion confirmed its interest in ZS Pharma, conceding "it has initiated preliminary discussions ... without any commitment on either party" and saying little else. Earlier Bloomberg reports, citing unnamed sources, said Actelion CEO Jean-Paul Clozel extended a $2.5 billion offer to the company in August. The big get with ZS is a late-stage treatment for hyperkalemia with blockbuster potential. The drug, ZS-9, has successfully reduced dangerously high blood potassium concentrations in Phase III trials, and the FDA has promised to hand down a final decision on it by May 26.

Buying ZS--or any other company--would help Actelion expand beyond its home territory of treatments for PAH, and increasing its market value through acquisition could help make it less attainable to larger drugmakers potentially angling to scoop it up.

Meanwhile, thanks to Opsumit's continued success on the market, Actelion has again raised its annual earnings projections. The company is expecting U.S. and European approval for the next-generation PAH treatment selexipag by year's end, and its pipeline also includes cadazolid, a treatment for Clostridium difficile-associated diarrhea, and ponesimod, in Phase III development for multiple sclerosis.

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