Medivation Inc (MDVN), Seattle Genetics, Inc. (SGEN) – Biotech Buyouts: Who’s Next?

Page 1 of 2

There’s been plenty of buzz lately about the continuing saga of the possible buyout of Onyx Pharmaceuticals, Inc. (NASDAQ:ONXX) by Amgen, Inc. (NASDAQ:AMGN). After initially rebuffing Amgen, Inc. (NASDAQ:AMGN), Onyx Pharmaceuticals, Inc. (NASDAQ:ONXX) warmed up to the possibility — for a higher price, of course — although its hesitancy to share ongoing trial data for blood cancer drug Kyprolis temporarily muddied the waters yet again.

All of the drama has prompted me to think about the inevitable question: Who’s next? Biotech buyouts sometimes beget other buyouts. Even when they don’t, they get people thinking about acquisitions. Here are three companies (from lowest to highest market cap) that I think could be possible pick-ups for the right buyer.

1. Medivation Inc (NASDAQ:MDVN)

Several big drugmakers could be kicking themselves for not buying Medivation Inc (NASDAQ:MDVN) already. The biotech landed the top spot on a recent ranking of the best-performing biotech stocks of the last decade. How good was Medivation Inc (NASDAQ:MDVN)’s performance? Only an 11,000% gain over 10 years!

Medivation Inc (NASDAQ:MDVN)’s success has been powered by prostate cancer drug Xtandi. Approved by the Food and Drug Administration a year ago, Xtandi racked up sales of nearly $158 million in the first half of 2013. Medivation Inc (NASDAQ:MDVN) splits the revenue, though, with partner Astellas Pharma.

Analysts peg Xtandi’s peak annual sales potential between $1 billion and $2 billion. Medivation Inc (NASDAQ:MDVN)’s market cap is currently a little more than $4 billion — just two-to-four times those peak sales estimates. That valuation isn’t bad for a big pharmaceutical company looking to buy growth potential.

2. Seattle Genetics, Inc. (NASDAQ:SGEN)

Another biotech that I suspect could be on the radar screen for potential acquisition is Seattle Genetics, Inc. (NASDAQ:SGEN). The stock has been on a tear so far in 2013, with shares soaring 78%.

Seattle Genetics, Inc. (NASDAQ:SGEN)

The crown jewel for Seattle Genetics, Inc. (NASDAQ:SGEN) is Adcetris, which treats Hodgkin lymphoma and anaplastic large cell lymphoma, or ALCL. Adcetris generated nearly $70 million in sales for the biotech during the first half of 2013. Seattle Genetics, Inc. (NASDAQ:SGEN) markets the drug in the U.S. and Canada, while its partner Takeda/Millenium owns the rights to market Adcetris in the rest of the world.

With a current market cap of $5 billion, Seattle Genetics, Inc. (NASDAQ:SGEN) wouldn’t be too much of a stretch for a buyout by several large players. One thing I could see getting in the way of any deal, though, is concern that the stock is priced too highly right now.

Page 1 of 2

Dividend Stock Alert - Billionaire Robbins' Top Dividend Idea With 70% Upside Potential

Get Paid 3.5% Per Year While Waiting For The Stock Appreciate 70%

Larry Robbins' Glenview Capital Opportunity Fund returned 101.7% in 2013 and Robbins personally made $750 million. The same fund returned 25.3% in 2014. In this FREE REPORT we will share Robbins' top dividend idea that yields 3.5% and has been increasing its dividends for 39 consecutive years. Robbins thinks the stock has the potential to appreciate 70%.

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Click here to Read Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 74 percentage points in 2.5 years. Our beta is only 1.2 (download a FREE newsletter and see the details inside)

Lists

Best Selling Magazines in the World

Shortest People in History

The Most Celebrated Holidays in the World

Most Expensive Handbag Brands in the World

Top Selling Comic Book Issues of this Century

The Most Powerful Women in Politics

Best Paid DJs

Most Rebellious Female Artists

Best Paid TV Actresses of 2014

Best Paid Actors of 2014

Most Expensive Horses in the World

Tallest People Ever

Most Encouraging Feminist Celebrities

Best Paid Supermodels of 2014

Top 10 Suburbs for Retirement in 2015

10 Wealthiest Cities in America

Top 10 TED Talks for Entrepreneurs

Best TED Talks on Education

25 Most Dangerous Places to Live in America

Top 10 Ski Resorts in the United States – 2014 List

Top 10 Most Remote Places in the World

Most Visited Museums in the United States

Wealthiest Photographers in the World

Most Famous Gay Athletes

The World’s Most Famous Circuses

Best Hair Stylists

Most Popular NASCAR Drivers

The Best Romance Movies of all Time

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!