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Trending - Pharma mergers are like taxis

Last updated: 11:55 11 Jan 2016 EST, First published: 06:55 11 Jan 2016 EST

MotoWorld

It's all happening in the pharmaceutical sector, with mergers aplenty, and for once the primary motivation is not potential tax benefits.

Last week, Affymetrix (NASDAQ:AFFX) agreed to be acquired by Thermo Scientific for US$1.3bn, and today that was comfortably topped by Dublin-based Shire (LON:SHP) securing approval of its takeover of Baxalta (LON:BXLT) from the latter's board by lifting its offer.

Baxalta shareholders will receive US$18 in cash and 0.1482 Shire American depositary shares (ADS) per Baxalta share, valuing Baxalta at about US$32bn, which is a couple of bill more than Shire offered last year.

Investors are already playing the “who's next?” game, but it is not an easy game to play, as there are so many candidates.

Nonetheless, it seems consolidation in the sector is well and truly underway, and rather like taxis – except on a wet day, obviously – there will probably be another takeover along any time now.

Talking of taxis, cab-booking app developer Uber is looking to become the most valuable private start-up in corporate history.

The controversial taxi firm is raising new capital from Morgan Stanley's high-net worth clients, according to reports.

Investors will have to inject a minimum of US$250,000 into the company, and the terms imply a value for Uber in excess of US$55bn, which is the current record for a private start-up, held by the reborn General Motors.

Moving from modern technology to dark ages technology, Arch Coal (NYSE:ACI) has filed for Chapter 11 bankruptcy protection.

The company said its mines would remain open and its employees should not be affected by the bankruptcy process. Well, not yet, anyway, but the future for coal mining globally is not looking very bright, as power companies switch to other forms of fuel, including renewable energy.

RISERS

Acorn International (NYSE:ATV), up 119%.

The Chinese marketing and branding company has announced a US$2mln share repurchase program.

Affymetrix (NASDAQ:AFFX), up 49.3%.

Northstar Asset Management (NYSE:NSAM), up 14.4%.

The company has engaged Goldman Sachs to advise on seeking strategic alternative to maximize shareholder value, effectively putting up the 'for sale' sign above the company.

FALLERS

Genvec (NASDAQ:GNVC), down 64.2%.

Novartis notified the Gaithersburg, Maryland-based company that it was pausing enrollment in the clinical trial of CGF166 to conduct a safety review of patient data, based on the recommendation of the trial’s data safety monitoring board, Genvec said.

American Electric Technologies (NASDAQ:AETI), down 18.2%.

Investors took fright at the company's US$8.5mln credit facility, announced last week.

Fitbit (NYSE:FIT), down 12.6%.

Legal firms are lining up to investigate claims of possible securities fraud against the company.

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