Yesterday's sudden flurry of speculation about Sanofi's ($SNY) decision to boost its stake in Regeneron ($REGN) underscored just how much the M&A community would love to see another big buyout come its way. Now that the mega-mergers are completed, with a notoriously mixed record of success, and $1 billion to $3 billion bolt-ons have become all the rage at Big Pharma, things have grown rather quiet on the biopharma front. But some analysts are clearly expecting AstraZeneca ($AZN) to step up with a major league deal.
"In order to buy time, they need to do a large acquisition," Kepler's Fabian Wenner tells Bloomberg.
Bloomberg, which loves a good speculative piece on M&A as much as anyone, also supplies two potential targets: Shire and Forest Laboratories. Shire's much admired growth trajectory over the last 10 years under Angus Russell has made it the kind of company any pharma would love, combining existing revenue from a big product and a growing pipeline in three diverse categories, including rare diseases. Forest is often cited as a takeover target because of its financial woes and the dogged attention of Carl Icahn, who loves nothing as much as getting some company to pay a premium for the companies he invests in.
AstraZeneca, on the other hand, has been voted most desperate to succeed among its rivals. Hit with a steady drumbeat of bad news from the pipeline, the company has to do some wheeling and dealing to get the numbers pointed north again. And analysts hate the sight of a declining top line.
"The pipeline hasn't delivered," Cenkos Securities' Navid Malik offers to Bloomberg. "Once they get through the patent cliff, they're not going to have quality revenue growth."
New CEO Pascal Soriot, meanwhile, has kept the rumor mill running with his decision to suspend share buybacks. And he doesn't have much time to repair the company's badly damaged rep. Bolt-ons may help AstraZeneca in the long run, but winning back the analysts will require something far more dramatic in 2013.
- here's the article from Bloomberg
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