Monday, September 14, 2009

Buyout Rumors: Bayer Buying Spectrum Pharmaceuticals?

Also from that same article we have this other rumor:

And Bayer hearts Spectrum Pharmaceuticals.

This one looks like a pretty interesting deal because Spectrum Pharma (SPPI) is actually marketing two drugs already. In other words they aren't just a development stage company and have revenues coming in already. They are Zevalin and Fusilev.

-Zevalin is for Non-Hodgkin's Lymphoma and has been recently approved for first line use in first-line consolidated therapy for NHL.

Spectrum said the Zevalin approval would expand the treatable population to about 43,000 patients annually.

I'm not sure of the revenue bump of that many new patients but it will be helping even more people and that cannot be bad. -Fusilev is for Osteosarcoma and is in FDA trials to deal with Colorectal Cancer as well.

On looking at Bayer's products we come up with a few Oncology drugs namely Viadur and Nexavar. Viadur- Is used to treat advanced Prostate Cancer. While Nexavar is used to treat Hepatocellular Carcinoma which is a kind of liver cancer. So a purchase of Spectrum will quickly add two new FDA approved oncology drugs to Bayers bench.

You have to add to this the fact that Bayer is currently marketing Zevalin in Europe. It would not be much of a stretch for Bayer to buy Spectrum and the American rights to Zevalin and add the revenue from Fusilev directly to their bottom line. Plus, Spectrum has a Phase 2 Prostate Cancer drug called Ozarelix that might be able to dovetail with Bayer's marketing of Viadur as well.

Also Spectrum has a market cap of only $314 million which is a very easy buy judging by the $1.8 billion that Bayer has in Cash as of the 2nd quarter of 2009. I can see this deal happening if Bayer actually pulls the trigger and decides to move further into the oncology field then they already are.

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