Buyout chatter pushed shares of Shire plc (FTSE:SHP) up nearly 2% in London yesterday and added 1.4% on Wall Street.
Rumors of a £16 billion (~$25.1 billion) or £30-per-share (~$47.10) cash offer from Bayer AG (PINK:BAYRY) and Pfizer (NYSE:PFE) spurred the high-volume trading, driven by the additive value of Shire’s May 2011 buyout of Advanced BioHealing.
Shire, based in Dublin and Lexington, Mass., shelled out $750 million for the company and its DermaGraft skin substitute for diabetic foot ulcers, which boasts an 80% profit margin and a potential $3 billion market, according to the ThisIsMoney website.
That’s because the deal made Shire one of the first large biopharms to get into the regenerative medicine game.
But the much-ballyhooed transformative value of the Advanced BioHealing buyout took a hit when Shire abandoned its pursuit of a leg ulcer indication for DermaGraft shortly after closing the acquisition. That decision was prompted by the failure of a Phase III clinical trial examining Dermagraft in treating venous leg ulcers failed to meet its primary endpoint of complete healing after 16 weeks.
In London, SHP shares began yesterday at £22.05 apiece before the buyout buzz drove them up 2.4% to an intra-day high of £22.58 ahead of a £22.48 close, for a 2.0% gain on the day. Shares opened today at £22.59 and hit a high of £22.62 before closing at £22.33, down 0.7%.
On The Street, SHPGY shares began yesterday at $105.02, pushing to a high of $106.10 (up 1.0%) before closing at $105.43, for a daily gain of 0.4%. Shares were trading at $104.40 today as of about 1:45 p.m., down 1.0% on the day.
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Analysts’ ups and downs
- CardioNet (NSDQ:BEAT): Leerink Swann raises 2012 sales estimate from $108.8 million to $116.9 million.
- Cerner (NSDQ:CERN): Piper Jaffray raises price target from $70 to $84, maintains "overweight" rating.
- Cynosure (NSDQ:CYNO): Leerink Swann maintains “outperform”
- Hologic (NSDQ:HOLX): Leerink Swann maintains "outperform"
- Mako Surgical (NSDQ:MAKO): Leerink Swann maintains "market perform"
- Medtronic (NYSE:MDT): Brean Murray Carret raises price target from $42 to $47.
- NuVasive (NSDQ:NUVA): Leerink Swann maintains "outperform," $21 price target; Canaccord Genuity reiterates "buy" rating; Craig Hallum downgrades from "buy" to "hold," sets $16 price target; Robert W. Baird downgrades from "outperform" to "neutral," lowers price target to $18 from $28; Mizuho raises price target from $20 to $25, sets "buy" rating; ThinkEquity reiterates $21 target and "buy" rating; Jefferies maintains "buy" rating, cuts prices target from $30 to $20.
- Palomar Medical (NSDQ:PMTI): Leerink Swann maintains “market perform”
- Solta Medical (NSDQ:SLTM): Leerink Swann maintains “outperform”
- Stryker (NYSE:SYK): Leerink Swann maintains “outperform” rating
- Syneron (NSDQ:ELOS): Leerink Swann maintains “outperform”
- Volcano (NSDQ:VOLC): Feltl & Co. downgrades from "strong buy" to "buy," reiterates $33.50 price target; Jefferies maintains "hold" rating, raises price target from $27 to $28, lowers FY12 EPS estimate from $0.38 to $0.23, raises FY13 estimate from $0.61 to $0.65; Leerink Swann maintains "outperform" rating, $33 price target; Piper Jaffray raises price target from $30 to $33, reiterates "overweight" rating.
