For Immediate Release
Chicago, IL – January 10, 2012 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Bristol-Myers Squibb Company ( (BMY - Analyst Report), Sanofi ( (SNY - Analyst Report), Inhibitex, Inc. ( , Gilead Sciences, Inc. ( (GILD - Analyst Report) and Pharmasset, Inc. ( .
Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513
Here are highlights from Monday’s Analyst Blog:
BMY Kicks Off 2012 Pharma Deals
The spate of acquisitions in the pharma industry continues in 2012 with Bristol-Myers Squibb Company ( (BMY - Analyst Report) announcing the first major deal of the new year. Major merger and acquisition (M&A) deals have taken place in the pharma sector over the last couple of years.
With most of the big pharma players already facing or likely to face generic threats to their key products, the companies are resorting to M&As and in-licensing deals to counter the loss of revenues that will arise following the genericization of its key drugs. Pharma major Bristol-Myers is no exception as the generic threat looms over many of its key drugs, including the blockbuster blood-thinner Plavix, co-developed with Sanofi ( (SNY - Analyst Report).
Bristol-Myers is looking to combat the generic threat through partnering deals and acquisitions, and is introducing new products to augment its product portfolio. The announcement of the $2.5 billion deal to acquire biopharmaceutical company Inhibitex, Inc. ( is a step in that direction. Over the weekend, Bristol-Myers and Inhibitex entered into a definitive merger agreement whereby the former decided to acquire the latter at $26.00 per share.
Offer Price Represents Huge Premium
The offer price represents a premium of 163% on Inhibitex’s closing price as of January 6, 2012. The Boards of both companies have approved the deal, which is expected to hurt Bristol-Myers’ earnings until 2016. The company expects the deal to negatively impact its 2012 and 2013 earnings per share by approximately $0.04 and $0.05, respectively. The pharma major intends to finance the deal through its available cash balance.
Deal Targets Lucrative HCV Market
By inking this deal, Bristol-Myers has made it clear that it wants a piece of the hepatitis C virus (HCV) market pie. The deal will bolster Bristol-Myers’ pipeline significantly with the major attraction being HCV candidate INX-189 (phase II). We note that this is the second deal in successive months inked by Bristol-Myers targeting the HCV market.
In December 2011, Bristol-Myers and Tibotec Pharmaceuticals announced their decision to join forces for the development of Bristol-Myers’ daclatasvir (BMS-790052) in combination with Tibotec’s TMC435, for the treatment of chronic HCV. What the partners are aiming to do is create an oral once-daily interferon-free cocktail treatment for HCV patients.
We note that other major companies are also targeting the HCV market. In November 2011,Gilead Sciences, Inc. ( (GILD - Analyst Report) announced an $11 billion deal to buy Pharmasset, Inc. ( , a company focused on developing HCV treatments. Gilead intends to further strengthen its HCV pipeline through this deal.
Why Is the HCV Market So Attractive?
The market is characterized by a significant unmet need. It is estimated that approximately 170 million people suffer from HCV infection across the world. However, the treated population is much lower. This leaves the field open for new treatments.
Secondly, the current standard of care comes with several side effects which make it difficult for patients to remain on treatment. A 48-week course of both peg-interferon (peg-INF - weekly injections) and ribavirin (RBV - oral drug), are the standard treatment for genotype 1 HCV infection.
We believe that the announcement of the deal with Inhibitex offers twin advantages to Bristol-Myers. The deal, on completion, will not only provide Bristol-Myers the opportunity to be a lead player in the lucrative HCV market but also allow it to combat the significant loss of revenues due to the impending genericization of key drugs particularly Plavix.
We believe that Bristol-Myers will continue signing deals and making acquisitions throughout 2012 to strengthen its portfolio thereby minimizing the impact of genericization.
We prefer to remain on the sidelines with a long-term Neutral view on the stock. The stock carries a Zacks #3 Rank (Hold rating) in the short run.
Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leon Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.
Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
Zacks Investment Research
800-767-3771 ext. 9339