Pharma news

planteria

news with both GlaxoSmithKline and AstraZeneca

Glaxo buy/sell/merge divisions with Novartis

http://www.bbc.co.uk/news/business-27107416

and AstraZeneca up 8% this morning on rumours that Pfizer preparing to bid for the company.

i'm holding GSK and was about to buy AZ too:):(

planteria

after an hour of trade they are up 4.5% and 7.1%

Doshwaster

There haven't been any mega-mergers in the Pharma world for a few years now so this could kickstart a new phase.

However, history has shown that bigger isn't always better in drug development and sales. The big boys may have the resources but the smaller companies can be more agile and innovative.

So, there may be some short-term investor gain but I'm not sure what it means long term for the sector.

Old_Slaphead

Glaxos merger with SKB didn't add much value. Initially the shares traded at over £20 only to fall by half before recovering, with the market, to £16 over the next decade.

planteria

all fair. it's a sector i intend to remain invested in, but will be watching with interest.

Old_Slaphead

GSK have fallen back around 8% before this morning's jump. Lots of issues with bribes etc. I was looking for sub £15 before adding a few - looks like that one's blown out of water unless we get the much awaited market correction.

Doshwaster

planteria wrote: »

all fair. it's a sector i intend to remain invested in, but will be watching with interest.

I'll certainly be watching with interest as I have worked in the sector for 20 years. All of this M&A talk can be very exciting but it does lead to a lot of uncertainty whether it is internally, with customers and suppliers or across the whole industry. If there's one thing which is bad for business it is uncertainty.

Here's an example of the possible knock-on effect:
http://www.cambridge-news.co.uk/Business/Business-News/Doubts-cast-over-AstraZenecas-plans-to-move-HQ-and-research-to-Cambridge-after-rumours-of-60bn-Pfizer-bid-20140421160345.htm

yatinsardana

I was soooooooo close to buying GSK. For those who know me know that I'm at the very beginning of building a portfolio so it takes me a while to collect enough funds to buy a share - slowly but surely I'm building a portfolio.

GSK (and possibly morrisons) was next on my list and next thing you know shares have jumped up. Not happy.

As far as AstraZeneca are concerned, obviously good for those who hold the share. I thought the talks have fizzled out though (http://www.bloomberg.com/news/2014-04-22/pfizer-astrazeneca-are-ripe-for-pharma-deal-real-m-a.html)

Nevertheless market is clearly expecting some big action from them.
They have to wait for me as before I even think of getting AstraZeneca, I need to get GSK and then some other ones in other sectors.

Doshwaster

yatinsardana wrote: »

Nevertheless market is clearly expecting some big action from them.
They have to wait for me as before I even think of getting AstraZeneca, I need to get GSK and then some other ones in other sectors.

I think that's right. AZ probably do need to merge but Pfizer isn't the best fit for them. Their recent history of acquisitions (Wyeth, Pharmacia, Warner Lambert) isn't that great and usually involves closing down facilities.

Scarpacci

GSK is a core holding for me. I have bought in over the last two years and primarily chose GSK over AZN because GSK was in better position with the "patent cliff". GSK has already seen some of its top drugs fall off the patent cliff, while its pipeline was strong.

AZN had the cliff in front of it and a fairly weak pipeline. AZN's share price picked up a lot in the last seven months or so, but I don't know whether they're quite as strong as the share price suggests. A bid for AZN before they're fully out of the woods makes sense, though I too question the value in these mega mergers.

planteria

Doshwaster wrote: »

I think that's right. AZ probably do need to merge but Pfizer isn't the best fit for them. Their recent history of acquisitions (Wyeth, Pharmacia, Warner Lambert) isn't that great and usually involves closing down facilities.

you mean bad for employees? therefore potentially bad for the UK economy? such closures could be good for the profitability/dividend/shareprice..