The drug giants Merck and Sanofi each said they would acquire a smaller drug maker for more than $2 billion Monday — in each case, more than double the smaller company’s market capitalization — cheering investors about large companies’ appetite to execute buyouts in the biotechnology sector.
Merck, of Kenilworth, N.J., is purchasing ArQule of Burlington, Mass., a developer of pills aimed at treating multiple cancers, for $2.7 billion, or $20 per share, a 107% premium to the stock’s closing price Friday. Sanofi, based in Paris, will buy Synthorx, a San Diego firm using a synthetic DNA base pair to create new drugs for cancer and autoimmune disease, for $2.5 billion, or $68 per share, a 172% premium to Synthorx’s stock price Friday.
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Giving away the store is OK with these companies but is someone keeping track of how the monies are being spent. Is “RETURN on INVESTMENT ?” ever in company’s thought process. If the companies are paying for knowledge base that suggests that companies have wrong focus.
No matter what transpires one thing is sure that drugs are going to unaffordable even to the folks who have piles of monies. Overall healthcare cost is going to go up and “C” suit is going to get ugly fat and rich. Sorry “C” suit! this is based on your track record.