Grinding Them Out at the Biotech Rumor Mill

Let's talk mergers -- biotech style.

This week's hookup between Idec Pharmaceuticals (IDPH - commentary - Cramer's Take) and Biogen (BGEN - commentary - Cramer's Take) has biotech mavens talking up another round of sector consolidation. Wall Street's biotech traders, fund managers and analysts love to gossip, and with most people using some form of instant messaging these days, it doesn't take long for some idle speculation to snowball into a major market rumor.

Wednesday, the takeover chatter du jour had Amgen (AMGN - commentary - Cramer's Take) buying Millennium Pharmaceuticals (MLNM - commentary - Cramer's Take), which is actually an old, but stubborn, bit of gossip that won't go away. (I'll dive into this one later -- it could be true!)

Rampant speculation over who's buying and who's selling is a time-honored Wall Street pastime, and one that brings out the crassest self-interest in just about everyone. Have you ever seen an investment banker quoted in a mergers-and-acquisition trend story who doesn't think there are more deals in the works? C'mon, these guys feast on the fees! Fund managers aren't much better because spreading merger rumors -- even talking about the possibilities in a dispassionate way -- is simply an easy way to talk up your book.

But who am I to get in the way of some fun? I made some phone calls, asking sources to give me their best merger ideas. Here's what they came up with. I guarantee that not all of these deals will happen, but some might.

Amgen will buy Millennium Pharmaceuticals: I might as well start with the mother of all merger rumors. Amgen has reportedly expressed interest in a marketing partnership with Millennium for its new multiple myeloma cancer drug, Velcade. So, the chatter goes, these partnership talks have now grown to encompass an all-out acquisition.

Does it make sense? It does, if you believe, as some people do, that Amgen wants to build a long-term cancer-drug franchise. As it stands now, Amgen has become the No. 1 biotech firm in the world by selling supportive care drugs for cancer patients -- stuff that fights off anemia, boosts white blood cell counts, etc. These drugs are great, but they're not cancer drugs. They don't kill tumors.

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Adam Feuerstein writes regularly for RealMoney.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. He invites you to send your feedback.