EXCLUSIVE: Biotech's Bull Run Perfect for M&A, Onxeo CEO Tells BioSpace
May 29, 2015
By Riley McDermid, BioSpace.com Breaking News Sr. Editor
The biotech sector’s bull run has created a climate that is ideal for companies looking to grow via mergers and acquisition activity, the chief executive of French biotech Onxeo told BioSpace Friday, as executives continue to weigh in on a market increasingly viewed as frothy.
Still, in an interview with BioSpace, Judith Greciet, director and chief executive officer of Onxeo, said that the fundamentals underlying that success are solid.
“There are obviously some more attractive technologies or class of compounds than others – which can drive some values to high rock level, sometimes on promises more than data really,” said Greciet. “But in general, its structuration, the growing track record as well as its competitiveness in terms of investment likely support the current market dynamism.”
Greciet also stressed that although the European market is a different ecosystem, it too has benefited from a renewed worldwide interest in biotech as a staple investment.
“The biotech sector is indeed highly dynamic since the past months,” she said. “In Europe which is our primary market, France biotech sector has been highly dynamic and successful, likely showing that our key biotechs are growing in maturity, expanding their activities and their capital to the U.S., therefore evolving to true global companies.”
All that dynamism has created the perfect conditions for M&A activity that will change the biotech landscape for years to come, she said, and one which Onxeo has certainly enjoyed itself.
“M&A is definitely a highly efficient way to drive company growth, as we showed last year, merging mid 2014 Bioalliance Pharma (French) with Topotarget Danish company to create Onxeo, aiming to become a global player in the orphan oncology field,” Greciet told BioSpace. “This merger has allowed Onxeo to become truly pan-European, with an enlarged pipeline of three Phase III/ ready to enter Phase III programs and three programs registered and licensed to international commercial partners.”
Will PfizerKline Become the Next Pharma Player?
The speculation surrounding a possible bid from Pfizer Inc. for struggling GlaxoSmithKline is heating up, after one closely-watched biotech analyst said in a note last week that Pfizer buying the company would “unlock access to its balance sheet and improve its tax situation.”
Gregg Gilbert, a biotech analyst at Deutsche Bank, wrote in a note to investors “Introducing PfizerKline” that he thinks a deal would be “materially accretive” for both companies. Gilbert estimated that a bid priced at $29.86 a share, via half stock and half cash, which would push up Pfizer’s earnings per share by 10 percent to 16 percent beginning in 2016.
“We believe that the company has a sense of urgency to create value by leveraging the power of its balance sheet to do needle-moving deals,” Gilbert wrote. “Since media reports in the past have pointed to the potential for a Pfizer/GSK combination, we are revisiting that theme.”
We want to know, dear readers, if you agree? Should Glaxo continue going it alone, or might Pfizer buy it and create one of the world’s largest pharma players in history?