The biotech giant Biogen’s stock has been halted after surging on reports that the drug companies Merck and Allergan are interested in doing a deal…
Whether there is a deal or not, the interest in Biogen shows the hunger big pharmaceutical companies have for new sources of growth.
After years in which their pipelines were depleted, new-drug approvals are up. But the companies have become so large that adding a new blockbuster drug in many cases isn’t enough to increase growth substantially — especially given the pricing pressures that they face. Merck had a market value of $162 billion; Allergan’s was $101 billion.
Biogen had sales of $10.8 billion last year, up 11%. The company, based in Cambridge, Mass., dominates the lucrative market for multiple-sclerosis drugs, now worth nearly $20 billion a year. Its Tecfidera treatment for the condition had one of the best new-drug launches after its 2013 approval, and Biogen stock has roughly doubled since the beginning of that year, even after a sharp recent drop.
Following The Wall Street Journal report Tuesday, Biogen shares climbed 8.8% to $328.40 after a brief trading halt for volatility.
Biogen shares have dropped from a high of nearly $500 they touched early last year, amid worries about its growth prospects. Tecfidera sales have slowed as competitors like Roche Holding AG develop rival treatments.
The decline in Biogen stock may be seen as an opening for prospective suitors who also may view the company as vulnerable to a takeover because it is in flux.