This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Celgene Deal Chief Calls Big Pharma Gutless For Lack of Biotech M&A

SAN FRANCISCO -- I'm attending the Allicense 2014 healthcare deal-making conference organized by Thomson Reuters. The weather here today is incredible. The conference is pretty good, too! Here are some highlights from this morning's panel sessions:

Given the dearth of biotech M&A in what is a record-setting year for healthcare M&A, I asked Bristol-Myers Squibb (BMY - Get Report) Vice President of Business Development Graham Brazier why Big Pharma doesn't gobble up big-cap biotech companies like Celgene (CELG - Get Report) or Gilead Sciences (GILD)

Brazier's response: The current market caps of big-cap biotech companies plus the necessary takeover premiums make them too expensive to buy. 

Not an unexpected answer, although it does seem a bit short-sighted, as was pointed out on Twitter:

And this:

Celgene deal maker George Golumbeski also participated on the panel with Brazier. Golumbeski agreed that price is a factor in Big Pharma's reluctance to acquire Big Biotech, but so too is Big Pharma's "aversion to risk". I'm sort of putting words in Golumbeski's mouth here, but he said Big Pharma is too scared (and too stupid?) to figure out buying Big Biotech would help them out a lot. 

I'm not putting words in Golumbeski's mouth when it comes to the way he threw massive shade on Pfizer's (PFE - Get Report) quest to buy AstraZeneca (AZN - Get Report) -- a deal he said was driven completely by financial engineering and not innovation.  

"If Pfizer really values immuno-oncology, they should be buying Bristol-Myers," said Golumbeski. Pfizer's insistence that buying AstraZeneca is about bolstering its pipeline of innovative drugs is an "outrageous statement," he said. 


On the same panel, Mallinckrodt (MNK - Get Report) Chief Strategy Officer Gary Phillps -- fresh off acquiring Cadence Pharma and Questcor Pharma QCOR - said, "We're not done yet." Generally, he said to expect more deal-making activity from specialty pharma acquirers due to cheap debt and the cost-saving benefits of tax inversions. 

Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.


Chart of I:DJI
DOW 17,660.71 +9.45 0.05%
S&P 500 2,050.63 -0.49 -0.02%
NASDAQ 4,717.0940 -8.5450 -0.18%

Adam's Tweets

Select the service that is right for you!

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
Real Money Pro

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.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Trifecta Stocks

Trifecta Stocks analyzes over 4,000 equities weekly to find the elite 1% of stocks that pass rigorous quantitative, fundamental and technical tests.

Product Features:
  • Model portfolio
  • Trade alerts
  • Recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Growth Seeker

Chris Versace, using sophisticated stock screening and fundamental research, identifies potentially explosive small and mid-cap stocks.

Product Features:
  • Model portfolio
  • Small-cap and mid-cap focus
  • Intraday trade alerts
  • Weekly roundups
Daily Swing Trade

Master swing trader Alan Farley uses his sophisticated software screens to review thousands of stocks each day for you, to find just the handful that meet his demanding criteria.

Product Features:
  • Daily commentary and coaching on swing trading
  • Technical charts and analysis
Top Rated Stocks Top Rated Funds Top Rated ETFs