Generally, multibillion-dollar biotech deals these days come with a considerable amount of light scolding from analysts fretting over the cost as valuations surge. But Celgene ($CELG) just did its third major deal in three months--and its biggest by far--in acquiring Receptos ($RCPT) for $7.2 billion and came out of it with a heightened share price (up a whopping 9% midmorning) as well as a rousing cheer from most of the analysts covering the industry. Downside remarks tend to caution against looking for a higher share price, and one analyst at least raises the prospect that the bidding war may not be over.
Here's a selection of notable comments this morning:
Bernstein's Geoffrey Porges: "We see this acquisition giving needed substance and breadth to Celgene's inflammation and immunology (I&I) franchise and offers a more secure bet than for example GED0301. Adding ozanimod means that Celgene could have at least two and possibly three or more active medicines for inflammatory diseases on the market by 2020."
Matthew Roden at UBS: "In our view, Celgene's acquisition of Buy-rated Receptos for $7.2bn ($232/share) is a positive, as it adds a high-quality long-term growth asset that is big enough to move the needle, in an area of Celgene's clinical and commercial expertise. We had considered Receptos as a prime acquisition candidate, as we saw unrecognized value in a go-it-alone strategy or acquisition for a differentiated asset that we've liked a lot. Hence our only worry for CELG is that another strategic comes over the top with a higher offer, given our organic $225 PT for RCPT shares and unsubstantiated media reports suggesting higher bids from GILD and TEVA."
Barclay's Geoff Meacham: "From a strategic perspective, we believe the deal makes sense given that it: 1) diversifies away from Revlimid; 2) addresses large commercial opportunities that leverage I&I infrastructure; and 3) provides meaningful value inflection milestones in 2017/18. Further, the deal price looks fair given the peak sales potential for ozanimod (guidance: $4-6B) and its stage of development."
Howard Liang at Leerink: "We see a strong strategic and operational fit that could significantly diversify CELG's revenue base, and we believe the acquisition provides investors with increased confidence in CELG's emerging second major franchise in inflammatory and autoimmune diseases."
-- John Carroll (email | Twitter)