Forest Laboratories ($FRX)
Market cap: $9.07 billion
The scoop: Any time Carl Icahn sets his sights on a biotech company, takeover rumors tend to swarm like flies on a dead animal. So it was last year when Icahn, the scourge of many biotech executives who have felt the lash of his tongue, bought into the company and then had nothing at all good to say about aging Forest CEO Howard Solomon.
Potential buyers? Eli Lilly ($LLY) could use some added product revenue to guard against some savage generic competition and a string of late-stage failures, concluded Credit Suisse analyst Catherine Arnold more than a year ago. Merck ($MRK) was active in the same kind of cardiovascular, respiratory and anti-infective space that Forest enjoys. Even Amgen ($AMGN) could get into the game.
A few months ago AstraZeneca ($AZN) emerged as a new favorite for the role of acquirer, and for the same reasons stated in several of these profiles. AstraZeneca needs to do deals, several of them. And they need to do it now, not in a year or two. So don't expect AstraZeneca to steer clear of any bargaining tables until it satisfies analysts that it is fully sated.
Forest has had some development success to boast about. The long-acting COPD drug Tudorza won approval in the last quarter, along with Linzess (Ironwood's linaclotide) for irritable bowel syndrome and chronic constipation. Levomilnacipran has been filed for depression and the schizophrenia drug cariprazine (partnered with Gedeon Richter) is set to take a path to regulators shortly. But generic Lexapro has been killing its big antidepressant franchise, weakening the company and making it weaker in the eyes of any Big Pharma predator.
You can be sure that Icahn, who finally won one of the Forest board seats he was looking for, hasn't missed the rumblings about Forest. Neither have any potential bidders.
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