February 6, 2015
By Riley McDermid, BioSpace.com Breaking News Sr. Editor
Serial acquirer Valeant Pharmaceuticals International, Inc. has been forced to up its bit for cash-strapped Dendreon Corporation , after its floor bid of $296 million placed as a “stalking horse” bidder of the company was quickly met by competing, higher offers.
Now, the Canadian drugmaker is offering $400 million for Dendreon, or more specifically its promising prostate cancer vaccine, Provenge, after multiple rival suitors emerged this week.
The news comes amid reports that Valeant is once again going shopping, despite pressure from shareholders and Wall Street analysts to rein in its free-spending buying spree. Since 2008, Valeant has acquired more than 100 smaller companies, a pace Chief Financial Officer Howard Schiller told stakeholders earlier this year that will slow, but will still be active.
Schiller said shareholders should expect “small and medium sized transactions” in 2015, he told the audience of J.P. Morgan Healthcare Conference which began Monday in San Francisco and is the oldest and largest conference of its type. It includes 300 of the largest biotech, healthcare and biopharma companies presenting their top-line data and estimates to 4,000 of eager bankers, analysts, institutional investors, hedge funds and journalists.
Valeant has made 60 acquisitions in six years, including its most recent deal to buy eye care company Bausch & Lomb for $8.7 billion.
Valeant has previously said it aims to be one top five pharma companies by the end of 2016, which means it would need to have a market cap of $150 billion, a difficult task as its debt continues to balloon . Right now, Valeant has $17 billion in debt on its books from $4.9 billion in 2012, a huge leap from $2.6 billion in 2008, when CEO Michael Pearson joined the company.
The company told analysts during a fourth quarter call last year that they hope to keep the deal making up.
“We can’t predict the path that will get us to the $150 billion, per se. But we find it’s very helpful to set a structure of aspiration,” an executive said at the time. “It’s something that we’ve done every year, and it gives our investors a sense of where we’re trying to go. And unless you aim high, you don’t achieve high.”
In related news, Valeant was rumored last week to be mulling over a bid for Raleigh, N.C.-based Salix Pharmaceuticals, Ltd. , though many market watchers worry the Valeant will pay too much for Salix, which has a market value of around $9 billion. Shibani Malhotra, an analyst with Sterne Agee Group, has estimated that the shares could shoot up as high as $170 each after a takeover, a massive premium to the $141.91 where it is currently trading.
“We believe the resolution of the accounting-related overhang should ease investor concerns,” said Malhotra in his note. “as reliable financials will be available near-term for investors as well as potential acquirers.”
BioSpace Temperature Poll
Will Hiring Heat Up in 2015? With companies as large as Biogen Idec and as small as ICON upping their hiring across the board, where do you think the biotech job market will go in 2015? BioSpace wants your opinion!
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