Payday Redux: Deals, Deals, and more Deals 
Posted by Carlos on Jun 05, 2013



Need Deals to win this game.

It’s been difficult to keep up with all the deals this month!

We won’t review them all here, as that’s best done by others. But here are a few recent ones which caught our eye:


  • Elan is making all the headlines lately, with deals with Theravance, AOP Orphan, Newbridge (a very good idea), and Sperenza (and a Buyback plan on top of all that). Some analysts speculate that this is being done to fend off a hostile bid from Royalty Pharma
  • Valeant rolls on with their eye-catching $8.7 billion acquisition of Bausch & Lomb. Will Valeant stop dealmaking anytime soon? We wouldn’t bet on it. 
  • Aragidm licensed their inhaled ciprofloxacin to Grifols, which is great news. We need more inhaled antibiotics on the market. Hopefully this is one that will make it.

Other companies that have been active recently include Actavis, Forest, and AstraZeneca.

So is dealmaking back?

Well, we don’t think it ever really left. As long as there are pipelines to be filled, assets will be transactable, so long as the price, fit, structure, and timing make sense for both parties.

The more interesting issue is whether or not revenue-generating assets will become increasingly scarce. If so, then what? Could a company like Valeant, with no interest in R&D, make a gradual shift towards acquiring  product development opportunities (cf., Forest)? Certainly their shareholders wouldn’t like that extra risk.

Or, will we see more International transactions? Will a Valeant or an Elan find growth in India? Eastern Asia? China even?

This is always the challenge with the growth via acquisition model. At some point, the price/fit/structure/timing  variables have to be adjusted to expand the pool of opportunities.

Can shareholders accept that?

Can management teams execute?

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