| Bernstein: It's Time For Gilead To Pull The Trigger On This Acquisition | |
| | |
|
Bernstein analyst Geoffrey Porges said it's time for Gilead Sciences, Inc. (NASDAQ: GILD) to continue the biotech M&A with a bid for Vertex Pharmaceuticals Incorporated (NASDAQ: VRTX). Porges noted that many investors "remain heavily exposed to mid and large cap biotech stocks" expecting further consolidation in the industry.
That should come from a Gilead acquisition of Vertex. Porges pegged the transaction at $45 billion, roughly a 50 percent premium to Vertex's $30.4 billion market capitalization at Monday's close ($125.55). At that price, a deal would be accretive after 2017 assuming a 27 percent cost savings. In 2015, the deal would be 7 or 8 percent dilutive to Gilead stock.
Related Link: Oppenheimer Is Excited About These 3 Biotech Stocks
The deal would also fill Gilead's need for $5 to $7 billion in "incremental revenue by 2020," according to Porges. Very few companies fit that bill, and Porges said that Vertex has "by far the best profile" and would complement Gilead's existing portfolio.
Porges estimated that a deal would move Gilead's stock to $130-140, up 30 to 40 percent from Monday's $100.65 closing price.
In pre-market activity, Vertex last traded at $128.95, up 2.7 percent. Gilead gained 0.7 percent to $101.39.
Image credit: Jeffrey Beall, Wikimedia
Latest Ratings for GILD
Date | Firm | Action | From | To |
---|
Feb 2015 | Credit Suisse | Downgrades | Outperform | Neutral | Feb 2015 | Citigroup | Maintains | | Buy | Feb 2015 | UBS | Maintains | | Buy |
View More Analyst Ratings for GILD
View the Latest Analyst Ratings
See more from Benzinga © 2015 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
|
|
| |
ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
Vertex Pharma is based in United states of america. Vertex Pharma is listed in United States of America. Its market capitalisation is US$ 100.2 billions as of today (€ 93.4 billions). Its stock quote reached its lowest recent point on March 12, 2004 at US$ 10.00, and its highest recent level on May 01, 2024 at US$ 402.14. Vertex Pharma has 249 070 000 shares outstanding. |