Anything you can do, I can do better!
In recent months, Pfizer and Merck have snapped up smaller biotech players.
Now AstraZeneca appears to have outdone its fellow Big Pharmas with an even bigger deal.
It will pay $1.07 billion for monoclonal antibody developer Cambridge Antibody Technology (Nasdaq: CATG).
Unfortunately for AstraZeneca, bigger isn't always better.
AstraZeneca's offer works out to be about $24.98 per share, about a 67% premium to where Cambridge's shares were trading on Friday. Since AstraZeneca already owns 20% of its pending purchase, the deal suggests an overall value for Cambridge Antibody of $1.33 billion - a steep 14 times sales.
Cambridge Antibody has yet to report a profit, although its losses have shrunk the last two years.
Last year Cambridge Antibody terminated development on its most advanced candidate, a medicine designed to reduce scarring associated with glaucoma surgery, after it failed to show efficacy in two phase 3 trials.
The drug next in line, a candidate to treat certain types of leukemia, is currently in a small phase 2 trial.
It seems AstraZeneca didn't want to be left behind as its rivals bought up biotechs.
But in its haste, it may be paying a steep price for what it's getting.
It also makes Insider wonder......... why the rush? Have they some bad news coming just around the corner?
Source: The Motley Fool
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