Stockwatch: Fireworks Or Ballistic Missiles In Biotechnology?

The week started positively enough with the major headline that Pfizer Inc. is to buy specialty pharmaceutical company Anacor Pharmaceuticals Inc. for $5.2bn. (Also see "Pfizer Buys Anacor With Blockbuster Ambitions For Crisaborole" - Scrip, 16 May, 2016.) The contamination of the NBI by specialty pharmaceutical companies like Anacor, Endo International PLC and Mylan NV is likely to lead to a separate debate on whether the NBI is still a real biotechnology index and therefore whether last week's strength was really due to biotechnology companies. Setting aside the debate over whether Pfizer acquired a specialty pharmaceutical or a biotechnology company, the analysts were split on what Pfizer wanted from Anacor. The least likely explanation was that it wanted to deny Allergan PLC the acquisition after Pfizer's failed acquisition attempt of Allergan. Much more plausible was the suggestion by the analysts from Jefferies of the attractions of Anacor's innovative side with the acquisition of crisaborole – under review by the FDA for mild-to-moderate atopic dermatitis. They argued that little value had been ascribed to fungal nail infection treatment Kerydin (tavaborole) or Anacor's animal health program partnered with Eli Lilly & Co.

On the other hand the analysts from Citigroup were firmly in the specialty dermatology side in a note that spilt...