European biotech hurting but lucky few to win big
By Ben Hirschler, European Pharmaceuticals Correspondent - Analysis
LONDON (Reuters) - It promises to be a lousy year for many of Europe's cash-strapped biotechnology companies, but a lucky few stand to hit the jackpot in deals with 'Big Pharma'.
Wyeth's WYE.N plan to scoop up Crucell (CRCL.AS: Quote, Profile, Research) -- followed by unconfirmed reports of a possible counterbid by France's Sanofi-Aventis (SASY.PA: Quote, Profile, Research) -- sent shares in the Dutch vaccine specialist soaring more than 40 percent on Thursday.
Shares in rival vaccine makers Intercell (ICEL.VI: Quote, Profile, Research) and Bavarian Nordic (BAVA.CO: Quote, Profile, Research) also rose.
Analysts and fund managers predict more such acquisitions in 2009, as large drugmakers look to biotech to refill product pipelines at a time when sales of old blockbusters are falling to generic competition.
In contrast to many other sectors, large drugmakers enjoy relatively stable revenue and remain flush with cash despite the downturn. Companies like Pfizer (PFE.N: Quote, Profile, Research), Glaxo (GSK.L: Quote, Profile, Research) and Merck & Co (MRK.N: Quote, Profile, Research) have all said they are shopping for assets at the lower prices now on offer.
"Pharma-to-biotech deals are clearly a central and natural part of the healthcare industry and are likely to increase given the current structural issues within the industry," Credit Suisse analyst Ravi Mehrotra said.
Perennial takeover targets include Danish antibody specialist Genmab (GEN.CO: Quote, Profile, Research) and Switzerland's Actelion (ATLN.VX: Quote, Profile, Research), both of which have major drug licensing deals with Glaxo.
Olav Zilian of Helvea also tips Basilea (BSLN.S: Quote, Profile, Research) as a potential candidate to be acquired, possibly in the second half of 2009. Continued...
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