For this week’s surprising start in the biopharma world we owe a huge credit to Pfizer who made the shock announcement that it would be making an acquisition of Array Biopharma for $11.4 Billion USD. In the markets whenever there is an acquisition of this scale the question on everyone’s mind is always who is next? There are currently two big players we believe could follow in the same suit as Pfizer and they are Amgen and Gilead Sciences.
Firstly let’s take a look at Biotech giant Amgen, who in recent weeks has seen a struggle with their top blockbusters losing steam. Their immunology drug Enbrel, is currently facing struggles while competing in an overcrowded market with new competition rising as more powerful products are launched. Amgen’s other big products that are currently generating the most for the company are Neulasta, Aranesp, Sensipar, and Epogen, however it’s almost the same story for these products as well as they already are facing biosimilar or generic rivals. The five products mentioned were responsible for generating over 60% of Amgen’s revenue for the last financial year.

The Biotech giant’s current product line, have multiple rising stars which include osteoporosis drugs Xgeva and Prolia alongside their leukemia drug Blincyto. Although the company has these in the wings, these products alone will not be enough to assist the company in generating strong growth, as their top five sales are declining. With this potentially promising pipeline available to them, the downside is that the majority of these products are still in the early stage of clinical trials, and could potentially take months if not years to generate revenue.
Currently Amgen has an increasing and lucrative cash stockpile, the company recently reported that their cash, cash equivalents and marketable securities totaled $26.3 Billion in a report dated march 31st of this year. With a large cash position and a continued influx of capital, Amgen should have no problem making an acquisition in the near future.
Gilead Sciences
Gilead Sciences are also facing their own problems with the big biotech’s lead franchise that deals with Hepatitis C known as HCV, effectively stopping the company from generating any earnings or revenue over the past few years. However in the first quarter of this year Gilead did show growth which although fantastic news, may be extremely short lived. The company saw good sales numbers for their HCV which boosted the revenue mainly due to timing more than anything. In the wings the company has a HIV drug named Biktarvy which always has and certainly will continue to be one of Gilead’s most promising products.
However the biggest challenge that Gilead is facing at the moment is with their pipeline of products, unfortunately for the company they faced two clinical failures this year, one of those failures came from a very promising anti-inflammatory drug named Filgotinib. However the FDA have required that the company conducts in depth safety studies that will delay a filing with the U.S regulatory body. New CEO of the company Daniel O’day has said that his top priority when it comes to Gilead is to effectively ramp up the potential pipeline. This may include leading the company to make relatively small acquisitions that will tie in nicely with the way the company is heading. Gilead has ample cash and cash equivalents available to them with recent reports stating the company had in excess of $30 Billion USD liquidity at the end of March.

James McDonald – IEC International