Forget about mergers and acquisitions (M & A). Think about partnerships and acquisitions or what Leerink Swann, which specializes in healthcare stock coverage, is calling "P & A."
In a research note to clients today, the LS team says there's a "perfect storm" for more P & A. "We see an unprecedented confluence of highly motivated buyers (large- and mid-cap biopharma companies with substantial portfolio gaps but a surplus of cash) and sellers (biotechnology companies holding valuable assets but desperate for cash). With the quantity and quality of deals poised to rise, there is the potential to create value for shareholders of both buyers and sellers," the analysts write.
Based on its models, Leerink Swann sees the most likely big buyers being Bristol-Myers Squibb and Forest Labs. The analysts think three companies, in particular, could be on BMY's shopping list: Vertex Pharmaceuticals, Alexion Pharmaceuticals and United Therapeutics. Remember, BMY recently tried to buy ImClone Systems, but lost out to Eli Lilly.