There were rumors late last week that Novartis (NYSE:NVS) was thinking of buying Bayer-Schering. Wherever these came from, they're apparently back, sending the company's stock on some rather uncharacteristic one-day rides.
But this deal makes little or no sense. Bayer and Schering AG are still in the throes of merging their organizations, so things are presumably still a mess. No one has a good picture of how effective the new company is going to be. One of their most promising clinical candidates (a Factor Xa inhibitor against blood clotting) is already tied up with Johnson & Johnson (NYSE:JNJ) here in the US. And the company's stock was a lot cheaper earlier this year, anyway: why would anyone wait until now to start eyeing them?
This also doesn't sound like a Novartis-y thing to do. They've swallowed up some companies in the past, certainly, but nothing on this scale. And they don't seem like a company that needs a lot more Euro-pharma exposure. (Roche, their fellow Swiss behemoth, has long been a rumored (and out of reach) target of theirs, but at least they have a much larger US and worldwide research footprint). It's also not like they're in any sort of desperate need to merge with someone.
So I'll be very surprised indeed if this rumor has anything behind it. Surprised and disappointed in Novartis, a company that I've mostly thought better of. . .