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The Zacks Analyst Blog Highlights: Gilead, JNJ, Sanofi, BMY and MyoKardia
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For Immediate Release
Chicago, IL – October 7, 2020 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Gilead Sciences (GILD - Free Report) , Johnson & Johnson (JNJ - Free Report) , Sanofi (SNY - Free Report) , Bristol Myers Squibb (BMY - Free Report) and MyoKardia .
Here are highlights from Tuesday’s Analyst Blog:
Pharma M&As Pick Up with Bristol Myers' Offer to Buy MyoKardia
The drug/pharma sector is characterized by aggressive M&A activity. Given that it takes several years and millions of dollars to develop new therapeutics from scratch, large pharmaceutical companies, sitting on huge piles of cash, regularly buy innovative small/mid-cap biotech companies to build out their pipelines.
Also, sloppy sales of mature drugs, dwindling in-house pipelines, government scrutiny of drug prices and emergence of big tech firms like Apple and Google in the healthcare industry whet the M&A appetite of large drugmakers. Fast growing and lucrative markets such as oncology and gene therapy have mainly been the focus areas for M&A activities.
However, after a flurry of deals in 2019, M&A activity significantly slowed down in 2020, mainly due to the impact of the coronavirus pandemic. There were hardly any M&A announcements in the first half of 2020.
However, it seems that M&A activity is picking up in the second half. Last month, Gilead Sciences announced that it will acquire oncology company Immunomedics for $88 per share in cash or approximately $21 billion. In August, Johnson & Johnson announced a definitive agreement to acquire Momenta Pharmaceuticals for approximately $6.5 billion in an all-cash deal. The deal closed this month. In August, Sanofi also announced a definitive agreement to buy San Francisco-based late-stage biotech, Principia Biopharma for an aggregate equity value of approximately $3.68 billion. The Sanofi/Principia merger closed last month. In April, Gilead bought Forty-Seven for $4.9 billion. The Gilead/Forty-Seven deal was announced in March.
Some of these buyouts came at significantly high premiums. Continuing the trend, on Monday, Bristol Myers Squibb announced a definitive deal to acquire MyoKardia for $13.1 billion. The offer price of $225.00 per share in cash represents a premium of 61.2% on MyoKardia’s Friday’s closing price of $139.60 per share. The deal has been approved by boards of both companies. The transaction is expected to close in the fourth quarter of 2020.
The acquisition will add MyoKardia’s lead product mavacamten, an experimental drug that treats obstructive hypertrophic cardiomyopathy (HCM), a chronic heart disease, to Bristol-Myers’ portfolio, thereby strengthening its leading cardiovascular franchise. Bristol-Myers’ cardiovascular franchise currently includes Eliquis, a blood thinner. A new drug application seeking approval of mavacamten for symptomatic obstructive HCM is expected to be filed in the first quarter of 2021. The addition of mavacamten will give Bristol-Myers the necessary diversification from its oncology drugs.
Shares of MyoKardia soared almost 58% on Monday. Shares of Bristol Myers have declined 7.8% while MyoKardia has risen 202.3% this year so far. The industry has gone down by 3%.
Though all these deals are relatively smaller than the 2019 mega-mergers of Bristol-Myers and AbbVie-Allergan, they nonetheless offer hope that after a dried up first half, M&A activity in the pharma sector is something for investors in biotech/drug stocks to look out for.
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Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights: Gilead, JNJ, Sanofi, BMY and MyoKardia
For Immediate Release
Chicago, IL – October 7, 2020 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Gilead Sciences (GILD - Free Report) , Johnson & Johnson (JNJ - Free Report) , Sanofi (SNY - Free Report) , Bristol Myers Squibb (BMY - Free Report) and MyoKardia .
Here are highlights from Tuesday’s Analyst Blog:
Pharma M&As Pick Up with Bristol Myers' Offer to Buy MyoKardia
The drug/pharma sector is characterized by aggressive M&A activity. Given that it takes several years and millions of dollars to develop new therapeutics from scratch, large pharmaceutical companies, sitting on huge piles of cash, regularly buy innovative small/mid-cap biotech companies to build out their pipelines.
Also, sloppy sales of mature drugs, dwindling in-house pipelines, government scrutiny of drug prices and emergence of big tech firms like Apple and Google in the healthcare industry whet the M&A appetite of large drugmakers. Fast growing and lucrative markets such as oncology and gene therapy have mainly been the focus areas for M&A activities.
However, after a flurry of deals in 2019, M&A activity significantly slowed down in 2020, mainly due to the impact of the coronavirus pandemic. There were hardly any M&A announcements in the first half of 2020.
However, it seems that M&A activity is picking up in the second half. Last month, Gilead Sciences announced that it will acquire oncology company Immunomedics for $88 per share in cash or approximately $21 billion. In August, Johnson & Johnson announced a definitive agreement to acquire Momenta Pharmaceuticals for approximately $6.5 billion in an all-cash deal. The deal closed this month. In August, Sanofi also announced a definitive agreement to buy San Francisco-based late-stage biotech, Principia Biopharma for an aggregate equity value of approximately $3.68 billion. The Sanofi/Principia merger closed last month. In April, Gilead bought Forty-Seven for $4.9 billion. The Gilead/Forty-Seven deal was announced in March.
Some of these buyouts came at significantly high premiums. Continuing the trend, on Monday, Bristol Myers Squibb announced a definitive deal to acquire MyoKardia for $13.1 billion. The offer price of $225.00 per share in cash represents a premium of 61.2% on MyoKardia’s Friday’s closing price of $139.60 per share. The deal has been approved by boards of both companies. The transaction is expected to close in the fourth quarter of 2020.
The acquisition will add MyoKardia’s lead product mavacamten, an experimental drug that treats obstructive hypertrophic cardiomyopathy (HCM), a chronic heart disease, to Bristol-Myers’ portfolio, thereby strengthening its leading cardiovascular franchise. Bristol-Myers’ cardiovascular franchise currently includes Eliquis, a blood thinner. A new drug application seeking approval of mavacamten for symptomatic obstructive HCM is expected to be filed in the first quarter of 2021. The addition of mavacamten will give Bristol-Myers the necessary diversification from its oncology drugs.
Shares of MyoKardia soared almost 58% on Monday. Shares of Bristol Myers have declined 7.8% while MyoKardia has risen 202.3% this year so far. The industry has gone down by 3%.
Though all these deals are relatively smaller than the 2019 mega-mergers of Bristol-Myers and AbbVie-Allergan, they nonetheless offer hope that after a dried up first half, M&A activity in the pharma sector is something for investors in biotech/drug stocks to look out for.
Both Bristol-Myers and MyoKardia have a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>
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Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.