AstraZeneca (AZ) is considering a takeover bid for Forest Laboratories of the US, according to a Financial Times report which cites people close to two companies.
The rumour comes shortly after recently appointed Forest chief executive Brenton Saunders announced a major shake-up of the company’s operations, including a cost-cutting programme aimed at trimming $500m off its cost base and a $400m share buyback.
The FT suggests AZ financial advisers recently met the senior management at Forest to discuss a cash offer for the company, which is valued at around $15bn, but that the negotiations are still in very preliminary stages.
At that valuation, any bid for Forest could rival the $15.6bn AZ paid for Medimmune five years ago to boost its biologics pipeline, a deal which some have suggested was priced too high.
One of the draws for AZ is that Forest’s product pipeline is pretty closely aligned with its own R&D priorities, with a particular focus on treatments for central nervous system (CNS) disorders as well as cardiovascular and respiratory medicine and infectious diseases.
After several pipeline setbacks, AZ has signed a string of acquisition and licensing deals under CEO Pascal Soriot, who took over the reins of the pharma giant last year with a pledge to streamline and reform the business.
Last month the company agreed to pay $440m to buy antibody-drug conjugate (ADC) specialist Spirogen, while in August it bought cancer company Amplimmune in a deal valued at up to $500m. Earlier this year it bought respiratory company Pearl Therapeutics in a $1.15bn deal as well as US biotechs AlphaCore Pharma and Omthera Pharmaceuticals.
Analysts suggested that the timing of Forest’s restructuring drive – in particular with share buyback – may be a defensive measure to make sure it secures a premium price in any buy-out of the business.