Ireland-based biopharma companies are all the rage these days. Blessed by advantageous tax laws, Elan ($ELN) and Warner Chilcott fell to takeover bids. And now that Jazz Pharmaceuticals ($JAZZ) has been bolstered by the addition of Gentium's rare-disease drug portfolio, it's back on the hit list of most likely takeover targets.
Timothy Chiang, an analyst at CRT Capital Group, told Bloomberg some months ago that Jazz's Irish residency had created a "feeding frenzy" around the notion that someone would come along and buy the company. Now R.F. Lafferty analyst Difei Yang is whipping up the frenzy a bit more by noting to the business news service that the Gentium ($GENT) buyout makes Jazz "a more attractive target."
What's the big deal about Ireland? When then Allegan, MI-based Perrigo ($PRGO) bought Elan last year, it said the Irish domicile would save the company $150 million, much of that from a reduced tax bill.
The same kind of tax advantages played a big role in Alkermes' ($ALKS) decision to buy Elan's drug tech arm--which had been on the auction block for years. And with Allergan ($AGN), Forest ($FRX) and Mylan ($MYL) left at the bidding table after Perrigo won out on Elan, it's certain that some big players have been running the numbers on Irish taxes as well.
Jazz wouldn't go cheap, though. It has a market cap of $7.2 billion, and a premium necessary to win over investors would put it at the very high end of what most pharma companies have been willing to pay these days. On the other hand, Amgen ($AMGN) got a lot of kudos for its $11 billion Onyx ($ONXX) acquisition, which could inspire a big player to gamble on Jazz.
- here's the story from Bloomberg