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Biotech / Medical : Munch-a-Biotech Today
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To: LLCF who wrote (109)1/27/1999 9:39:00 PM
From: Biomaven  Read Replies (1) of 3158
 
Here's an extract from a Jesse Eisinger article on TheStreet. He also points out that there wasn't much premium, perhaps because the AGPH price already reflected takeover rumors.

The takeout is easily the most significant in the history of the young
biotech industry and could signal the start of a wave of consolidation.

"This Agouron deal is tremendous. It is a watershed event in biotech," says
Mitch Silber, a partner at biotech consultant Carson Group. "A Big Pharma
has not bought out a biotech completely since Glaxo bought out Affymax in
1995. It's been so long that investors basically had given up on this
possibility. Now it's real and I bet any companies with late-stage products
that are not partnered will fly on the open."

Glaxo (GLX:NYSE ADR) bought drug-discovery company Affymax for over $500
million in early 1995.

The deal ratifies the impressive move that investors have made into the big-
and medium-capitalization biotech stocks since September, when the bear
market in the sector reached its nadir: The Amex Biotech Index is up 68%
from its Sept. 1 recent low. The agreement also signals that Big Pharma, for
the first time, may be interested in buying whole biotech companies, instead
of just taking stakes in them or cherry-picking the best drugs in the
smaller companies' pipelines.

Indeed, on other occasions, drug companies have simply taken large stakes in
biotechs, such as when Ciba-Geigy in 1994 acquired a 49.9% stake in Chiron
(CHIR:Nasdaq) for $2.1 billion. American Home Products (AHP:NYSE) took a
majority stake in Genetics Institute before buying the rest in late 1996.
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