High-Premium Biotech M&A Continues (AMGN, CELG, MITI, IBB)

Health and Healthcare

Published: January 26, 2012 5:08 pm

Last Updated: April 27, 2020 10:56 pm

Thursday brought yet more merger and acquisition news in the ongoing buyout trends in the biotech sector. Amgen Inc. (NASDAQ: AMGN) announced that it is going to acquire Micromet, Inc. (NASDAQ: MITI), a cancer drug maker that is German and American. Celgene Corporation (NASDAQ: CELG) announced that it was going to acquire an outfit called Avila Therapeutics, a developer of cancer drugs.

The Micromet deal is valued at $11.00 per share. This was a 33% premium to the prior close and shares closed up 32% at $10.94. The prior 52-week range was $4.13 to $8.90. Unfortunately for M&A arbitrage players, this deal offers no real upside in an arb-spread and it seems unlikely that a higher bid is coming based upon its share price never having gone above $11.00 today. That buyout is on the heels of a deal signed last year where Amgen agreed to an upfront payment for a discovery and development deal. Amgen is indicated around $69 after turning in 3% sales growth after the close.

Avila Therapeutics is a developer of covalent drugs in cancer and this $925 million buyout from Celgene is a cash and stock deal with $350 million of the total coming in cash. This company has AVL-292 as a inhibitor now in Phase I studies. Celgene shares are around $72.65 and are also with striking distance of a 52-week high ($75.11).

It is interesting that with two deals already having been announced in the last 24-hours that the iShares Nasdaq Biotechnology (NASDAQ: IBB) ETF was down by almost 1% at $114.71 on a day when there were two deals on the heels of another large premium acquisition this week.

JON C. OGG

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