CHICAGO, July 25, 2014 /PRNewswire/ --Today, Zacks Equity Research discusses the Pharma/Biotech, including Pfizer (NYSE:PFE-Free Report), AstraZeneca (NYSE:AZN-Free Report), AbbVie (NYSE:ABBV-Free Report), Shire (Nasdaq:SHPG-Free Report) and Mylan (Nasdaq:MYL-Free Report).
Industry: Pharma/Biotech
Link: http://www.zacks.com/commentary/33610/
Mergers and acquisitions (M&As) continue to play a major role in the pharma sector and are not showing any signs of slowing down. The last few months have brought tax inversion deals into focus considering the number of agreements signed with ex-U.S. companies.
Tax inversion focused deals involve the creation of a more efficient tax structure. These deals, which were earlier popular among mid-sized companies, are picking up even among large-cap companies, prime examples being Pfizer's (NYSE:PFE-Free Report) unsuccessful attempt to acquire UK-based AstraZeneca (NYSE:AZN-Free Report) and AbbVie's (NYSE:ABBV-Free Report) agreement to acquire Shire (Nasdaq:SHPG-Free Report). Through the Shire acquisition, AbbVie will not only boost its product portfolio, it is will also be able to cut its tax rate to 13% by 2016. Other such moves have been made by companies like Mylan (Nasdaq:MYL-Free Report), among others.
While efforts are on to bring in more stringent anti-inversion rules, such deals will continue in the near term. In fact, expectations are high that Pfizer will resume talks to acquire AstraZeneca later this year.
Meanwhile, we expect small bolt-on acquisitions to continue. In-licensing activities and collaborations for the development of pipeline candidates have also increased significantly. Several pharma companies are focusing on in-licensing mid-to-late stage pipeline candidates that look promising, instead of developing a product from scratch, which involves a lot of funds and time.
Small biotech companies are open to in-licensing activities and collaborations. Most of these companies find it challenging to raise cash, thereby making it difficult for them to survive and continue with the development of promising pipeline candidates. Therefore, it makes sense for them to seek deals with pharma companies that are sitting on huge piles of cash.
We recommend biotech stocks that have attractive pipeline candidates or technology that can be used for the development of novel therapeutics. Therapeutic areas which could see a lot of in-licensing activity include immuno-oncology, oncology, central nervous system disorders, diabetes and immunology/inflammation.
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Click here for your free subscription to Profit from the Pros.
Get the full Report on PFE - FREE
Get the full Report on AZN - FREE
Get the full Report on ABBV - FREE
Get the full Report on SHPG - FREE
Get the full Report on MYL - FREE
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
http://www.zacks.com
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumedthat any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein andis subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Logo- http://photos.prnewswire.com/prnh/20101027/ZIRLOGO
SOURCE Zacks Investment Research, Inc.
