Incyte Pharmaceutical: Top Idea For 2H14 With 2 Free Call Options Driving M&A Valuation To $93, Gilead Most Likely Suitor
- GILD is quickly being pushed to make a bid for a major acquisition to demonstrate to shareholders and the competition that it will aggressively defend its markets.
- ABBV’s buying spree in our view may force GILD to get a little more aggressive and seek later stage assets with broad synergistic potential with its own Oncology/Inflammation pipeline.
- Prior to their $11B Pharmasset acquisition in 2011, management expressed they would be primarily focused on ‘bolt on” deals, then in the coming weeks spent $11B.
- When examining the possible take over targets through these filters (size, synergies with internal pipeline, and pace of accretion), only one target really emerges, Incyte Pharmaceutical’s (INCY).
- Our Sum-of-the-Parts (SOTP) M&A Valuation only values 3 of 6 INCY Assets (Jakafi, IDO-1, Baricitinib), using conservative assumptions, fully risk-adjusted, & discounted 15% gives us our $93 PT, 82% upside.