Another look at the news in week to April 29

Following the abandoned $160 billion acquisition of Allergan by Pfizer, industry watchers started thinking that the record M&A activity of last year might slow down. However, the last few days of April proved this may not be the case, with three “billion-dollar” deals announced valued at a total of $45 billion, namely Abbott’s $30 billion buy of medical devices firm St Jude, AbbVie’s $5.8 billion deal with Stemcentrx and Sanofi’s snubbed $9.3 billion unsolicited proposal to Medivation.

According to Edison Investment Research, the full gamut of the types of deals we usually see in the sector - large companies merging in order to eke out synergies, an acquisition of a fast growing oncology product, and a desperate attempt by AbbVie to diversify away from Humira.

Edison analyst Max Jacobs commented: “The Abbott/St Jude deal is simply one of two large companies merging in order to eke out synergies, while the Sanofi/Medivation bid is one where a large oncology player is seeking to gain a faster growing oncology product. The AbbVie/Stemcentrx deal is a desperate attempt by AbbVie to diversify away from Humira, which represents the majority of their profits and is going off-patent this year, by throwing money at an early-stage company with large potential but also very large risks ahead of it. As both large pharma and large biotech companies are all having major growth challenges, we’d expect more of these three kinds of deals to occur in the future.”

After many months of waiting, Sarepta Therapeutics finally got its day in front of a US Food and Drug Administration Advisory Committee, wrote Alexander Maxwell on the Seeking Alpha blog. Sarepta is trying to convince the FDA to approve its drug eteplirsen for the treatment of the symptoms associated with Duchenne muscular dystrophy. The results for the panel were mixed for Sarepta, and now investors will have to wait to see what the FDA ultimately decides.