BMS takeover speculation mounts, again
earlier this week as speculation mounted - not for the first time -
that the firm could soon become the target of a major
pharmaceutical acquisition.
The New York behemoth witnessed an upsurge in the number of shares changing hands on 1 October, though the price did not shift exorbitantly, closing at $29.03 (€20.47) up from $28.82 on 28 September (the previous day's trading). There was a frenzy of activity as the New York Stock Exchange opened for business on 2 October - and in the wake of a Wall Street Journal report the previous night alluding to this possible takeover - but this rapid-fire share dealing soon tailed off, finishing the day at $29.04. However, rather than the share price per se, it was activity in the firm's options that those in the know were keeping a careful eye on. Indeed, the WSJ report noted that almost 26,700 call options changed hands at the beginning of the week, with the main activity being in November options that give the right to pay $30 per share in the forthcoming weeks. Suggestions are that a suitable buyout price for BMS is around the $37.50 mark. Crunch time for new breast cancer drug Other observers are remaining wary, with some analysts cautioning about taking the speculation too seriously - "there's been talk of it every year since 2002," said one. Most recently, the firm's stock spiked in July on suggestions Sanofi-Aventis would be the one to walk it up the aisle. Things are looking rosier for BMS since the doldrums of 2002, with its share price propped up of late by a more positive earnings outlook, takeover speculation and new medicines on the horizon. One of these is the breast cancer agent ixabepilone, which faces a crunch time mid-month when the US Food and Drug Administration (FDA) is expected to make a decision on whether or not to approve this first in class drug. Investors were also pleased to see it make a foray into biological drugs with the $430m acquisition of Adnexus Therapeutics in September. And it has benefited from a deal with the US government over alleged previous pricing and marketing practices that will see it shell out more than $515 million in financial penalties, but avoid any criminal charges. Time will tell whether it will go it alone or join forces with another.
