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Teva Acquisition Machine Gears Up: Who Is the Next Target?

Trey Thoelcke

Teva Pharmaceutical Industries Ltd. (TEVA) shares recently hit a 52-week high after the chief financial officer of the maker of generic medicines said at a conference the company intends to resume a deal-making strategy that made it one of the most acquisitive drug companies of the past decade.

Then the company announced Tuesday that it will acquire NuPathe Inc. (PATH) for $144 million upfront, or $3.65 in cash for each NuPathe share, and possibly $124 million more if NuPathe achieves certain sales goals. The deal ends NuPathe's plan to merge with Endo Health Solutions Inc. (ENDP), and Teva adds Zecuity, the only FDA-approved prescription migraine patch for adults, to its portfolio of treatments of central nervous system problems. Teva also gets access to the patch treatment technology. Its shares rose more than 2% to another 52-week high on Tuesday.

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So what could be next on Teva's radar? UBS recently identified some biotech buyout and merger candidates. Among them were the following.

Idenix Pharmaceuticals Inc. (IDIX) has a market capitalization near $1 billion, and its primary focus is on drugs for the treatment of patients with hepatitis C virus. It has collaboration agreements with Novartis, GlaxoSmithKline and others. The Thomson/First Call estimate is posted at $5.27, but Idenix closed Tuesday at $8.01.

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Insmed Inc. (INSM) focuses on developing and commercializing targeted inhalation therapies for patients battling serious lung diseases. Its lead candidate is Arikace, a treatment for certain serious lung infections. Insmed has a market cap of about $840 million. The consensus price target is $26.43. Shares closed Tuesday at $21.54.

InterMune Inc. (ITMN) has a market cap near $1.5 billion. Its Pirfenidone, an orally active small molecule drug for the treatment of adults with idiopathic pulmonary fibrosis, is available in Europe and Japan, and it is in phase III trials for use in the United States. The consensus target is set at $17.43, but InterMune ended Tuesday at $18.02.

Puma Biotechnology Inc.'s (PBYI) drug candidates include neratinib, as an oral for the treatment of advanced breast cancer patients and non-small cell lung cancer patients, and intravenous for the treatment of advanced cancer patients. But Puma is a bit pricier, with its market cap of about $4 billion, and Tuesday closing share price of $139.92. The consensus price target is only $136.67.

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