8 Potential Biotech Acquisition Candidates

Here are 8 promising biotechs priced for a buyout if their products can deliver: BioMarin Pharmaceutical Inc. (BMRN): It’s not the most profitable company, but BioMarin Pharmaceuticals certainly has some promising products in its portfolio. The company first achieved profitability in 2008, and its two largest revenue drivers in 2010 were Naglazyme (14% growth to $193 million) and Kuvan (20% growth to $99 million). A 15% increase in operating expenses last year, the result of increased sales efforts and clinical trials, has recently hurt BioMarin’s bottom line, and analysts expect a $-.10 EPS next quarter as a result. Analysts at Deutsche Bank downgraded BioMarin to a ”hold” on February 18th, and Wells Fargo set a $28.00 price target on the stock in December. Despite weakness in some of its technicals such as a high Price/Sales ratio and low operating margin percentage, BioMarin’s solid array of products in its pipeline make it a good prospect for acquisition. A 14.6 PE Ratio compared to the industry average of 44.8 indicates it is a good value as well. Shares currently trade at $25.36. We think Novartis (NVS) would be an interested buyer, given that BioMarin has an ongoing relationship with the Swiss giant.  To continue…