Buyout buzz: Biopharma players staying focused on bolt-on deals
The buyout buzz in San Francisco this week has focused consistently on Big Pharma's hefty appetite for the kind of bolt-on deals that can boost product lines and pipelines. But there's hardly a hint of any interest in the kind of mega-mergers that redefined the industry's landscape a few years ago. And the newly spun-off AbbVie ($ABBV) wasn't about to change the careful pace at J.P. Morgan.
"We are not really in a situation where we need to go and do a big deal," CFO Bill Chase told Reuters. "It doesn't seem to us to be a prudent way to use our cash."
What does seem sensible, he added to the wire service, were some more licensing pacts and what he termed "tuck-in acquisitions," which can be loosely translated as a bolt-on buy. Any deals AbbVie may do will have to sync with the pipeline. Newly spun off after its split with Abbott ($ABT), the pharma company says it has 10 late-stage drugs and a similar number in mid-stage development.
AbbVie's big product is Humira, which loses patent protection in 2016. Now it's looking to a promising hepatitis C drug along with other experimental products to take its place as the $10 billion therapy takes on less expensive biosimilars in a few years. There's no sign that AbbVie's newly independent executive crew is anywhere close to hitting the panic button.
Vertex ($VRTX), one of AbbVie's rivals in the race to develop a next-gen hep C drug, was just as eager to put a damper on any speculation that it was hunting for a big buyout.
"Our priority is to develop our medicines," CEO Jeffrey Leiden told Bloomberg. "If we see appropriately priced deals, we'd consider them; those usually end in 'millions,' not 'billions.'"
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