Monday, November 21, 1994
Amgen Inc.'s decision finally to enter the acquisitions market with last week's announced deal for Synergen Inc. has released pent-up speculation about the other kinds of acquisitions that the cash-rich biotech giant might find attractive.
Analysts responded positively to Friday's announcement that AMGN will purchase SYGN for $9.25 a share (see BioCentury Extra, Nov. 18). The stock market took a little longer to come around, initially sending AMGN shares down $1.438, before ending the day off $0.188 at $56.875.
Gregory Brown of Vector Securities International immediately raised AMGN to "buy" from "neutral," saying the SYGN deal indicates that AMGN management has awakened from relative inactivity on the corporate development front. Analysts have long worried that AMGN's leading position in sales and market cap wasn't underpinned by a rich pipeline.
Even more important than the merits of the SYGN acquisition itself, Brown said, was the message that AMGN will agressively pursue outside technology and products that can enhance its revenue base and leverage its sales force, or bolster its technology platform. He expects the SYGN deal to be the first of several acquisitions.