M&A

Buyout Buzz: Sanofi, Gilead rumors keep the fire burning under a boiling Tesaro buyout story

At this stage, there may be a few people left in biopharma who haven’t heard that Tesaro $TSRO has reportedly set itself up on the auction block in search of a nice, fat buyout offer. For those who like to keep tabs on M&A, we offer the latest word from StreetInsider that Sanofi $SNY is kicking the tires and talking price — which may start around $10 billion, or $185 a share.

But the plot thickens with word that Gilead — another deep pocket player with big ambitions — may also be looking to jump into the game.

Sanofi, of course, is a logical bidder. The French pharma giant was left behind at the altar after Pfizer $PFE swept in with an even bigger checkbook and bought out Medivation, pursuing a desire to bag Xtandi as well as an experimental PARP for its cancer drug portfolio.

Pfizer, which paid a whopping $14 billion for Medivation, was quickly rewarded with a shrinking revenue stream while Tesaro has yet to really get things started with its newly approved PARP Zejula. So Sanofi would be left pondering another bidding war after it also got spanked by J&J on the $30 billion Actelion buyout, underscoring its top execs’ worry that biotech assets are valued far too high.

All this fresh talk about M&A usually triggers a spike in the share price, but Tesaro’s been the focus of so many rumors for so long that yesterday the price barely budged, inching up only 2.8%.

Investors appear to be saying that they want more to go on before they bid higher. It’s not hard to see why.


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