Follow the Leader
When Pfizerannounced its deeper cost cuts last week, including a total of about 10,000 layoffs, analysts said other big drug companies that had not already started restructuring would use the industry giant as the model. Sure enough, today AstraZenecasaid it will get rid of 3,000 employees (5% of its workforce) over the next few years. It's the same old song: increased competition from generic drugs. AstraZeneca recently did a billion-dollar-plus partnership deal with Bristol-Myers Squibb on developmental diabetes drugs, and so it's one of the companies that is getting mentioned as a possible buyer of Bristol-Myers Squibb . The Financial Times reported yesterday that Bristol has hired investment banks to possibly get a bidding war going, on the heels of the French report earlier this week that Sanofi-Aventis was moving in for the kill. Bristol shares are up about nine bucks since last August, and rallied this week on the rumors and speculation.
And speaking of rallies, Gilead Sciences is at an all-time high today on very heavy volume. The biotech beat the Street on earnings after the closing bell yesterday, and gave much stronger-than-expected guidance. Many analysts are raising their ratings and/or their price targets on the stock.