Shire is among the day’s risers in a downbeat market after a broker upgrade, and despite suggestions it could be planning another big deal.
The pharmaceuticals group paid $5.2bn for US rare disease specialist NPS Pharma earlier this year, and there was a report it could now be eyeing up BioMarin, a specialist in rare genetic diseases worth around $18bn.
Citigroup said in a morning comment that a deal “strategically makes sense but [is] unlikely.”
Meanwhile UBS raised its target price on Shire from £54 to £60, dismissing suggestions the company had paid too much for NPS. UBS analyst Guillaume van Renterghem said:
The price Shire paid to acquire NPS ($5.2bn) led a few investors to wonder whether Shire had not overpaid for it. To answer this question we conducted two proprietary surveys on Natpara and Gattex in the US and reached the conclusion that these compound combined could be worth $9bn on an net present value basis. Indeed, both drugs target high medical need with a high portion of patients needing alternative therapies. Pricing and patient-specific efficacy remains an issue to physicians but the overall response remains positive for both drugs.
Shire shares are currently 55p higher at £53.65.
