Language in Debt Offering Suggests Gilead's (GILD) M&A Team is Ready to Pounce - Jefferies
- Wall Street dips on Trump protectionism, Qualcomm drag
- Yahoo! (YHOO) Tops Q4 EPS by 4c; Sees Verizon Deal Closing in Q2, Not Q1
- Aetna's (AET) Humana (HUM) Takeover Blocked by Judge as Anticompetative
- Trump signs order withdrawing U.S. from Trans-Pacific trade deal
- After-Hours Stock Movers 1/23: (REXX) (MRCY) (SYNC) Higher; (FSM) (OCUL) (CASC) Lower (more...)
Get instant alerts when news breaks on your stocks. Claim your 2-week free trial to StreetInsider Premium here.
Language being used in the prospectus of Gilead Sciences' (NASDAQ: GILD) $5 billion debt offering last night suggests deals are more imminent, Jefferies analyst Brian Abrahams said in a note to clients Friday.
While smaller than last year's $10 billion and 2014's $8 billion offerings, instead of the typical "boiler plate" language used in those last two prospectuses the new one says proceeds may be used for "future acquisitions."
"To us, this signals that GILD is likely getting closer to a deal or series of deals, which we believe would help ease concerns about their perceived BD stagnation in recent years," Abrahams said.
The debt deal would give GILD approximately $29.5 billion in cash, the firm notes.
While it will be hard to move the need on GILD's ~$30B revenue base, they continue to believe that there could be assets
that help offset HCV declines, improve EPS, and increase potential DCF-based valuation.
"We continue to expect several small to medium-sized deals focused on oncology, liver disease, fibrosis, and rheumatology, though we would not rule out GILD moving into a new field such as orphan diseases," the analyst said.
Today's note didn't highlighted any specific takeover target, although they linked to prior reports which discussed specific potential deals. Companies mentioned as potential targets in those reports were:
- Incyte (NASDAQ: INCY),
- Vertex (NASDAQ: VRTX)
- Intercept (NASDAQ: ICPT)
- Alnylam Pharma (NASDAQ: ALNY)
- Alexion (NASDAQ: ALXN)
- Medivation (NASDAQ: MDNV) (since acquired by PFE)
- Medicines (NASDAQ: MDCO)
- BioMarin (NASDAQ: BMRN)
- Kite (NASDAQ: KITE)
- Celgene (NASDAQ: CELG)
One company not noted in the past reports, but seen as a clear potential target by the market is TESARO (NASDAQ: TSRO).
Shares of Gilead Sciences closed at $78.84 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Perrigo Co. (PRGO): Cutting Estimates After Management Meeting - Jefferies
- TransDigm Group (TDG): The Shorts Have It Wrong - Jefferies
- Ixia (XXIA) Said to Get Buyout Interest from Thoma Bravo, Silver Lake, Vista - Bloomberg
Create E-mail Alert Related CategoriesAnalyst Comments, Hot Comments, Mergers and Acquisitions, Rumors, Trader Talk
Related EntitiesJefferies & Co
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!