AstraZeneca scores Gilead for possible unprecedented merger for the pharmaceutical industry.

AstraZeneca Plc ha comenzado un acercamiento a su rival Gilead Sciences para explorar una posible fusión, según adelanta Bloomberg citing sources familiar with such conversations. The British pharmacist raised this possibility last month while the American studied with its advisers an offer for which no details have been revealed.. However, if it reaches a good port, it could become the largest operation in history within the sector.

The capitalization of AstraZeneca, the largest English pharmacist, reaches the 140.000 million dollars and has a wide portfolio of treatments for multiple diseases, ranging from cancer to cardiovascular diseases.

For his part, Gilead had a stock market value of 96.000 million dollars and it's the company behind Remdesivir, the drug that has achieved emergency approval by the US Food and Drug Administration (FDA, for its acronym in English) for the treatment of critically ill patients hospitalized with Covid-19. This medication continues to rank as the most effective among patients who are too ill to recover on their own but not so severe as to require assisted ventilation..

Besides, “las patentes en medicamentos contra el VIH y el dominio continuo de Gilead en el mercado de la hepatitis C serán suficientes para garantizar fuertes beneficios durante las próximas dos décadas”, indica Karen Andersen, Morningstar analyst. “Su experiencia en enfermedades infecciosas y tratamientos concentrados en una sola píldora es parte de su estrategia de investigación y desarrollo, que vemos como uno de los activos intangibles más fuertes que respaldan a la empresa”, Add.

It is because of that, according to sources cited by Bloomberg, the American is not interested in selling or merging with another large pharmaceutical company, but instead prefers to focus its deal strategy on smaller partnerships and acquisitions. In fact, according to Andersen, Gilead will need more acquisitions to see strong growth beyond its HIV and hepatitis C medications. At the same time, un portavoz de AstraZeneca dijo que la compañía no hace comentarios sobrerumores o especulaciones”.

Even so, This approach highlights how the pharmaceutical industry could change at a time when larger or smaller pharmaceutical companies are competing to find effective treatments for the coronavirus..

AstraZeneca indicó a finales de la semana pasada que había firmado nuevos acuerdos destinados a ampliar la distribución global de una Covid-19 vaccine developed by researchers at the University of Oxford, after the company agreed on a supply that reserved initial doses for the UK and the US.

AstraZeneca's securities accumulate a return of one 41% in the last 12 months, which makes this pharmaceutical company the best value in the Bloomberg Intelligence index of the main western pharmaceutical companies. Gilead stock has risen around the 19% during said period.

AstraZeneca has strengthened its leadership in the pharmaceutical and biotechnology industry thanks to patent protected drugs and a wide range of drugs in development. In fact, success with new treatments is offsetting recent Nexium patent losses, used against gastrointestinal reflux, and Crestor, cholesterol lowering, that have weighed on the growth potential of the company.

Right now, AstraZeneca's product portfolio ranks as one of the strongest, especially when it comes to cancer treatments, with his medications Tagrisso and Imfinzi. “Estos medicamentos también ofrecen el potencial de fijar los precios, lo que impulsaría la expansión de los márgenes de la compañía”, Damien Conover qualifies, also Morningstar expert.

Last year, the pharmaceutical industry announced or completed some of the major merger and purchase operations. Among them stand out, for example, the acquisition of Celgene by Bristol-Myers Squibb, valued in 74.000 millions of dollars.

Marriages between AbbVie and Allergan were also consummated (63.000 millions of dollars); Takeda y Shire (58.600 millions of dollars); Mylan and Upjohn (12.000 millions of dollars), Pfizer y Array Biopharma (11.400 millions of dollars); Novartis and The Medicines Company (9.700 millions of dollars); Eli Lilly y Loxo Oncology (8.000 millions of dollars); GlaxoSmithKline and Tesaro (5.100 millions of dollars).

Source: the Economist.- 08/06/20.