For Immediate Release
Chicago, IL – March 30, 2012 – Zacks.com announces the list of
stocks featured in the Analyst Blog. Every day the Zacks Equity
Research analysts discuss the latest news and events impacting
stocks and the financial markets. Stocks recently featured in the
blog include Amylin
Pharmaceutical ( AMLN), Bristol-Myers
Squibb ( BMY), Eli Lilly ( LLY),
Express Scripts Inc. ( ESRX) and Medco
Health Solutions, Inc. ( MHS).
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Here are highlights from Thursday’s Analyst
Blog:
Amylin Shoots Up on Takeover
Rumors
Amylin Pharmaceutical ( AMLN) shares shot up
54.45% on rumors regarding a take-over bid by Bristol-Myers
Squibb ( BMY). According to Bloomberg, which cited unnamed
sources, Bristol-Myers had made an offer of $22 per share ($3.5
billion). However, the offer was rejected by Amylin’s board of
directors last month.
Why Amylin?
Following the termination of Amylin’s exenatide agreement with
Eli Lilly ( LLY) in November 2011, Amylin has been
considered to be a potential takeover candidate for companies with
a focus on diabetes. Amylin’s exenatide franchise consists of
Byetta and Bydureon (once-weekly exenatide). While Byetta sales
have been lagging expectations, Bydureon, which was launched
earlier this year in the US, could very well be a
blockbuster.
Amylin is currently looking for ex-US partners for the exenatide
franchise, which should help maximize the value of the product.
Meanwhile, Bristol-Myers has been pretty active on the
acquisition front over the past few quarters. Earlier this year,
the company acquired Inhibitex. Other acquisitions in the recent
past include Medarex, Inc., ZymoGenetics, Inc., and Amira
Pharmaceuticals, Inc.
With Bristol-Myers already having a presence in the diabetes
market (Onglyza and Kombiglyze), the Amylin acquisition would make
sense. Bristol-Myers is facing a major patent cliff with its
lead product, Plavix, slated to lose US exclusivity in May
2012.
Our Take
Amylin could be an attractive takeover target for companies with
a focus on the diabetes market. Chances remain that other companies
could express an interest in acquiring Amylin and a deal could be
sealed in the late 20s.
We currently have a Neutral recommendation on Amylin, which
carries a Zacks #3 Rank (short-term “Hold” rating).
Express Scripts, Medco to Merge Next
Week
The wait for investors is finally over as Express
Scripts Inc. ( ESRX) recently announced that its merger
with Medco Health Solutions, Inc. ( MHS) might
close in the week starting April 2, 2012. The merger is subject to
satisfaction or waiver of the remaining closing conditions.
In mid-March, Express Scripts and Medco Health had agreed to
extend their merger-closing date. According to the
Hart-Scott-Rodino Act, the waiting period for the merger expired on
March 12, 2012. However, the companies decided to work with the US
Federal Trade Commission (FTC) and planned to close the merger by
early second quarter 2012.
Express Scripts had agreed to acquire Medco Health in July last
year, for $29.1 billion ($71.36 per share) in cash and stock. At
the time of announcing the deal, Express Scripts said that Medco
Health shareholders will receive $28.80 in cash and 0.81 shares of
Express Scripts for each share of Medco Health that they own.
Following the closure of the acquisition, Express Scripts’
shareholders will own approximately 59% of the merged entity, with
Medco Health’s shareholders holding the remaining.
Express Scripts expects to generate $4 billion annually in cash
from operations, following the integration of the two
companies.
Our View
Currently, we have a Neutral recommendation on Express Scripts.
The stock carries a Zacks #3 Rank (Hold rating) in the short-run.
We note the acquisition of Medco Health will generate more
synergies for the two Pharmacy Benefit Management (PBM) companies,
in the form of lower cost of prescription drugs and improved
quality of healthcare.
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AMYLIN PHARMA (AMLN): Free Stock Analysis Report
BRISTOL-MYERS (BMY): Free Stock Analysis Report
EXPRESS SCRIPTS (ESRX): Free Stock Analysis Report
LILLY ELI & CO (LLY): Free Stock Analysis Report
MEDCO HLTH SOL (MHS): Free Stock Analysis Report
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