AstraZeneca PLC Rumored to be Stalking Massachusetts's Ariad Pharmaceuticals, Inc.
January 28, 2015
By Riley McDermid, BioSpace.com Breaking News Sr. Editor
Shares of drug giant AstraZeneca PLC are up Wednesday on continued speculation that the company is considering a bid for oncology specialist Ariad Pharmaceuticals, Inc. , a strategic move that its chief executive has said in the past would be a solid addition to its cancer pipeline in a competitive market.
Wall Street has been buzzing since December that AstraZeneca was looking for a bolt-on acquisition sometime in the next few quarters, with Ariad and Hikma Pharmaceuticals named as the front runners. New rumors Wednesday that Ariad will receive a bid soon have revived that buzz, pushing AstraZeneca up in mid-morning trading before equalizing them at noon New York time.
CEO Pascal Soriot has been open about the possibility that AstraZeneca will be looking to make some acquisitions, with size not a major consideration for the company.
"What we have done in the past is a good guide to what we would do in the future," he told the Wall Street Journal last year. "If something came along that was bigger and would really be transformational and we think we can execute on it, we will definitely consider it.”
Shire is also rumored to be courting Ariad, whose flagship treatment for leukemia, Ponatinib received a stamp of approval from the U.S. Food and Drug Administration (FDA) last year.
“Ariad would be a perfect purchase for any major drugs group wanting to enhance its position in the crucial cancer treatment field,” wrote blogger Geoff Foster at The Daily Mail. “Analysts reckon the take-out price would probably be north of $20 a share.”
Soriot himself has been leaving a bread crumb trail of clues about what AstraZeneca may do to beef up its oncology resources, saying in the same Journal interview that finding a new partner—or whole new company—to help it create and market its cancer drugs would be a major consideration.
"We will be able to market these products ourselves, but for sure if we could find a partnership that would create value we would do that," he said. "It would have to be either a strong commercial player or it would have to be a smaller company with a commercial presence and a pipeline."
An acquisition may be more likely than a partnership, however, because Soriot said he finds partnering a difficult thing to do on tricky, complex portfolios. "It's not easy because this is the core of our business, and that's not something we will partner too easily," he said.
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