Stockwatch: Gilead, BMS Expose High Cost Of M&A
Financial Results Take The Shine Off Acquisitions
Expensive acquisitions are in the spotlight during earnings season. The purchases of Kite and Celgene by Gilead and Bristol-Myers Squibb are not turning out to be what was written on the tin.
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The company will depend on Keytruda for growth after spinning out some franchises, but executives argued during its Q4 earnings call that there will be much more to Merck than the cancer blockbuster.
Gilead's Kite acquisition may finally have appeased investors' thirst for a major deal with a transaction that will diversify revenue and expand its oncology portfolio.
The planned purchase price of $11 billion, or $137 a share, an 89% premium over Pharmasset’s closing price on Nov. 18, is by far the highest ever paid for a clinical-stage biotech.