Saturday 19 July 2014

Another day, another multibillion pharma deal - part 2

Now that the £32 billion AbbVie/Shire deal looks to be "done" (or at least for the time being), it's time to look at another potential deal brewing in the sector.

I hear GlaxoSmithKline is in the early stages of examining a multi-billion dollar takeover bid for US-based biopharmaceutical company InterMune.

Good sources tell me the FTSE 100 giant has spent the last month looking at whether to make an offer for InterMune, which specialises in making a drug to treat idiopathic pulmonary fibrosis.

Bankers from Lazard are understood to have been working with GlaxoSmithKline on the potential deal, according to my sources.

However, it's not clear whether GlaxoSmithKline is anywhere near close to making a formal offer for InterMune and may decide to pursue other deals in the sector, so readers shouldn't get too excited that an imminent deal announcement will be made shortly.

Indeed, speculation has been rife in recent weeks that GlaxoSmithKline has been looking at US-based company Raptor - another biopharmaceutical company that specialises in developing therapies to treat debilitating diseases - however the talk is understood to be wide of the mark.

GlaxoSmithKline is not the only European company to have shown an interest in buying InterMune, which on Thursday was granted Breakthrough Therapy Designation from the US Food and Drug Administration for Pirfenidone.

Earlier this year, Switzerland-based Actelion lined up financing for a potential bid for InterMune but may have given up its pursuit for the US company after its share price rose significantly.

Back in April, Actelion was thought to be willing to offer around $46 for InterMune. InterMune, though, has seen its shares rise and yesterday closed at $41, valuing the company at just over $4 billion. Here is a link to a piece I wrote on the topic a few months ago:

France's Sanofi was also interested in InterMune but is believed to have been put off by the high prices being paid for pharmaceutical companies at the moment. Christopher Viehbacher, Sanofi's chief executive, said earlier this year that he was only interested in bolt-on deals.

Mr Viehbacher told Reuters in April: "If we can continue to bolt onto our growth platforms we'll continue to do so. That supposes we can find acquisitions at a price that delivers value to Sanofi shareholders. Quite honestly, when I look at the prices paid that's not always possible to do."

A spokesperson for GlaxoSmithKline declined to comment.

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