Glaxo May Buy Theravance to Gain New Drugs, Piper Analysts Say
By Makiko Kitamura - Mar 4, 2013
GlaxoSmithKline Plc (GSK), the U.K.’s largest drugmaker, may consider acquiring Theravance Inc. (THRX) to fully control respiratory drugs the companies developed together, analysts said.
The Food and Drug Administration’s Pulmonary-Allergy Drugs Advisory Committee will review the two companies’ Breo drug on March 7. Glaxo currently owns 27 percent of Theravance and may pay $51 a share for the remainder, Piper Jaffray analysts said in a note to investors. That’s more than double the closing price on March 1 and would value the remaining stake at about $3.6 billion
Now what: Don't say I haven't already climbed this tree -- because I have. My exact words on Jan. 25 with regard to which biotech was the next buyout candidate were, "Personally, I'd call a hookup between Theravance and GlaxoSmithKline a no-brainer. Theravance and Glaxo have been like peanut butter and jelly when it comes to developing revolutionary new COPD treatments." I really don't see anything on the safety side of things that would preclude Breo Ellipta from an approval later this week, so I'd agree that Piper Jaffray is probably wise to be speculating on a buyout in the near future.
Sentiment: Strong Buy