Pharmaceutical firm Shire (SHP) has made a ‘smart move’ by acquiring competitor Dyax Corp.
Berenberg analyst Klara Fernandes reiterated her ‘buy’ recommendation and target price of £63.00 after Shire bought Dyax for $5.9 billion in cash. There is also up to $646 million in contingent value rights to be paid based on Dyax’s pipeline antibody inhibitor DX-2930.
Shares in Shire edged 9p higher to £44.95 yesterday.
‘If successful, DX-2930 will have a substantial disruptive impact on (competitor inhibitor drugs) Cinryse and Firazyr sales, resulting in erosion of Shire’s hereditary angioedema (HAE) franchise,’ she said. ‘In our view, Shire has made a smart move by acquiring its competitor, allowing it to take advantage of the changing HAE landscape. With DX-2930, Shire is positioned to have 60% of the prophylactic market by 2020 and 70% by 2025.’
Possibly, but now that most cash is gone on expansion , shp will need to do some financial angeniring. Should they continue " expanding " -chasing growth in few years time some clever analyst will make comparison to Glen , qpp, gbo,....not to mention pump and dump cycles -"out of favour sector", biotech - pharma reregulations ( prices of products, excessive reported profits real or not....), drying out pipe line, legal actions .... Even a sornch advocats of "free market economic " are raising questions how much should medi-drugs cost. Fun and games go on and on ....
The analysts rate the share as a strong buy. I would expect SHP to beat the market if news stays as it is but a rise in commodities would see it rise a bit slower than the market. At a guess 5000p by Christmas.
My average short just above £53. Had couple of longs this week but closed same day. Had no play here today. Left long order for £42ish till the end of year. Still think bod will be gelable and continue shopping -overpaying for enlargement hence nocking down sp.
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