Spectrum a Takeover Target for Bayer? Color Me Skeptical
Bayer owns European rights to Zevalin, a drug that treats non-Hodgkin's lymphoma (NHL) that has been a commercial failure for a variety of reasons. Spectrum owns U.S. rights to the drug and is currently seeking an expanded approval here that is supposed to widen the potential pool of NHL patients who can be treated with the drug -- and hopefully breathe new life into moribund sales.
The rumor mill is churning with this: If Spectrum wins the new Zevalin approval (the decision is expected Sept. 7), Bayer will want to buy the company so it can control worldwide rights to the drug.
Really? The problem with this rose-colored scenario is that Bayer shows very little interest in Zevalin today. The company barely markets the drug in Europe despite already having the expanded NHL approval there. (Bayer doesn't even break out Zevalin sales every quarter because the drug is barely a rounding error on its income statement.)Perhaps the Bayer-is-buying-Spectrum scenario would make more sense if Bayer gobbled up its other drug partners. But that isn't happening, either. Case in point: Onyx Pharmaceuticals (ONXX), which co-markets the very successful cancer drug Nexavar with Bayer. Nexavar sales will probably top $850 million this year. Reasons abound for why Bayer should have bought Onyx years ago, but still, no deal. Yet somehow, investors should be expecting Bayer to buy Spectrum?
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV