Look back at pharma news to August 5

Although Biogen shares were halted on a report of takeover interest from Merck & Co and Allergan, it may be wise to be skeptical, says Edison Investment analyst Max Jacobs. While a takeout could happen for strategic reasons, Biogen offers neither company growth nor synergies and in the case of Allergan an acquisition would practically be a merger of equals when taking into account a takeover premium.”

Also looking at the chatter around a possible buy of Biogen, Jonathan Weber writing on Seeking Alpha notes that, with a current market capitalization of $72 billion, $6 billion in debt and $4 billion in cash, the company's enterprise value is $74 billion, whereas Merck sports an enterprise value of $174 billion and Allergan has an enterprise value of $139 billion.

Allergan has a lot of cash since the company has sold its generics business to Teva in a deal valued at slightly more than $40 billion: Allergan has received $34 billion in cash, the rest of the cost for an acquisition could easily be funded by debt in today's low interest rate environment. The planned spin-off of Biogen's hemophilia business could also be changed: Selling the unit to another company would bring in a couple of billion dollars that could be used to immediately repay some of the debt Allergan would have to take on to finance the Biogen acquisition, Mr Weber notes.