Who's The Next Big Pharma Acquisition?

In a new report, Jefferies analyst David Steinberg looked at the frenzy of M&A activity that has been happening in the specialty pharmaceuticals space in recebt years. According to the report, 2014 was a blockbuster year for buyouts, and 2015 is on pace to be a record year.

Perfect M&A Environment

In the report, analysts explain that the current M&A cycle in pharmaceuticals has been driven by three key environmental factors: cheap debt, tax inversions and the creation of “cash” earnings reporting, which has allowed buyers to report immediate earnings accretion following a transaction.

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Analysts describe the current M&A cycle, which began in 2005, as “robust,” and the current stage of the cycle particularly strong.

The Numbers

Last year saw 45 pharmaceutical M&A transactions worth $141 billion dollars. While 2014 was the strongest year so far for the current cycle, the 16 deals so far in 2015 totaling $99 billion puts this year well ahead of last year’s pace.

Despite the major momentum, analysts caution that as little as one bad deal could bring the current M&A boom to a screeching halt.

Top Prospects

Jefferies names the following companies as the current top potential pharmaceutical buyout targets.

• Valeant Pharmaceuticals International Inc VRX
• Shire PLC SHPG
• Perrigo Company Public Limited Co PRGO
• Zoetis Inc ZTS
• MaLlinckrodt Public Limited Co MNK
• Jazz PharMaceuticals Public Limited Co JAZZ
• United Therapeutics Corp UTHR
• Pacira Pharmaceuticals Inc PCRX
• Insys Therapeutics Inc INSY
• The Medicines Co MDCO
• DepoMed Inc DEPO
• Spectrum Pharmaceuticals Inc SPPI
• Kythera Biopharmaceuticals Inc KYTH
• Revance Therapeutics Inc RVNC
• Xenoport Inc XNPT
• Mylan NV MYL
• Akorn Inc AKRX
• Impax Laboratories Inc IPXL
• Amphastar Pharmaceuticals Inc AMPH
• Anacor Pharmaceuticals Inc ANAC