4 Biotech Companies That Could Be Buyout Targets

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 |  Includes: AMGN, ATHX, BMRN, CELG, CEPH, VRX
by: Investment Underground

By Cameron Smith, Lead Editor

We took a look at biotechnology stocks with promising pipelines. With the recent announcement of Valeant Pharmaceuticals (NYSE:VRX) attempting a hostile takeover of Celphalon (NASDAQ:CEPH), we have looked at other value names in the biotech sector that could be lucrative targets in the near future. We viewed investments from a value angle, looking for those selling at a discount relative to their peers. Here is what we found:

Amgen (NASDAQ:AMGN): Amgen is an independent biotechnology medicines company. AMGN discovers, develops, manufactures and markets medicines for grievous illnesses. AMGN could be a good value play for investors looking for exposure to the biotech sector due to its comparatively low P/E ratio of 11.27 and high net profit margins of 30.74%. AMGN also trades at a sector low price to book ratio of 2.07.

Athersys, Inc. (NASDAQ:ATHX) Athersys is a biopharmaceutical company engaged in the discovery and development of therapeutic product candidates designed to extend and improve the quality of human life. The product development portfolio of ATHX includes MultiStem, a stem cell product, which is being developed as a treatment for multiple disease indications, and is being evaluated in two ongoing clinical trials. ATHX is currently rated buy or outperform by all of the five analysts rating the company, with price targets ranging from a low of $5.00 to a high of $9.00 and the median consensus representing a 160.4% increase from the April 4th close of $2.86. Another potentially bullish indicator for ATHX is that ATHX’s CEO Gil Van Bokkelen recently purchased 10,000 additional shares of ATHX on March 25.

Biomarin (NASDAQ:BMRN) Biomarin develops and commercializes pharmaceuticals for serious diseases and medical conditions. Currently BMRN has four approved products: Naglazyme (galsulfase), Kuvan (sapropterin dihydrochloride) tablets, Aldurazyme (laronidase) and Firdapse (amifampridine phosphate). BMRN has a profit margin of 54.7% and a relatively high current ratio of 6.01, along with a price to book ratio of 3.93. BMRN is trading at a forward P/E ratio of 1,278.50, and its topline is expected to grow 19.30% through the current year. BMRN was recently named one of Citi Investment Research's Top Mid Cap Buy Recommendations.

Celgene (NASDAQ:CELG) Celgene is an integrated biopharmaceutical company primarily engaged in the discovery, development and commercialization of therapies designed to treat cancer and immune-inflammatory related diseases. The drug and cell therapies that CELG develops are designed to treat life-threatening diseases or chronic debilitating conditions. CELG has EPS of 1.88, a high net profit margin of 24.28%, and a survey of 24 analysts reveals a median price target of $67.50, which represents a 19% increase from CELG’s previous close.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.