M&A

When will Biogen finally pull the trigger on a blockbuster M&A deal?

Michel Vounatsos

Now that Gilead $GILD, Celgene $CELG and even Sanofi $SNY have pulled off some major league M&A deals, all eyes are on Biogen $BIIB to finally step up and do something…big.

What we got yesterday was a small preclinical deal of no great consequence, a mere appetizer compared to the binge deal analysts have been dreaming about. So you can imagine what the first question was about when the analysts got their shot during the Q4 call on Thursday.

CEO Michel Vounatsos started off a conversation that concentrated a lot on discipline and buybacks and…something big. He said:

We are contemplating early assets, which remains the sweet spot, the sweet spot where we can add tremendous value because of the capability that we have and the focus. We are contemplating larger assets as you can imagine….

Geoffrey Porges, Leerink

Imagining is about all that the analysts can do right now, as Biogen remains focused on the longterm development of a high profile program for aducanumab in Alzheimer’s — not the kind of play that inspires a tremendous amount of confidence in certain success.

So a blockbuster deal has to come fairly soon, the analysts are saying. Here’s what Geoffrey Porges had to say this morning:

We remain cautious about the outlook for Biogen’s stock, given a paucity of high probability, high impact late stage catalysts this year, and the attendant valuation risks from the company’s dependence on its development efforts in Alzheimer’s disease. We anticipate that Biogen is likely to join the M&A celebration in the relatively near future, and were intrigued to see that its areas of emerging interest now include ophthalmology and neuropsychiatry, which are two sub-sectors where its portfolio remains conspicuously lacking. Conversely, Biogen seems to have other options up its sleeve for further restructuring of its existing products (divesting biosimilars for example), which could offer even more financial flexibility should high impact late stage M&A opportunities present themselves.


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