Big pharma's appetite for biotech deals, already fueled by a need to supplement weak pipelines and replace products coming off patent, is expected to surge this year as a handful of big drug companies seek to reinvest nearly $100 billion in repatriated profits.
The $100 billion was created by the American Jobs Creation Act of 2004, provides companies a one-time opportunity to repatriate foreign profits at a tax rate of 5.25 percent rather than the 35 percent rate they would otherwise have to pay.
To claim the credit, companies are required to reinvest the money in approved ways, including acquisitions or licensing deals.
Insiders view: It certainly seems like a good idea to invest in biotech now. Big Pharma will be doing the same in the near future.
Spotting which biotechs are the juciest fruit is the key and is the reason analysts are paid such big bonuses.
Source: MSNBC
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