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Biotech / Medical : Biotech Valuation

CRSP 53.80

+2.7%

3:59 PM EST

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To: Jibacoa who wrote (3761)	5/11/2001 3:41:57 PM
From: Biomaven	Read Replies (2) of 52153

I don't see most of the genomics companies as good munch companies. The issue is always why buy the company rather than just partner if they have some technology you want. In the case of VRTX/ABSC, the story was that when VRTX looked at all the places they could use the ABSC technology, it was cheaper to just buy the company. MRK has not been seen as in the forefront of genomics, and so partly this was just catch up on their part. I believe that what RSTA was doing will have wide application to many programs at MRK. However I'm not sure I can see the same breadth for most other genomics companies. My guess is that to the extent companies like GLGC (which I own) and SQNM (which I don't) have technologies useful to a potential acquirer, a simple license would be the likely outcome. Other genomics companies are so widely partnered (think INCY) that an acquisition by one company just doesn't make sense. This merger does reinforce the notion that the genomics companies are not all dot.com fluff, and that some have real value as measured by a hard-nosed pharma with a pronounced "not-invented-here" bias. This merger is definitely good news for the sector in the short- and middle-run. Peter

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