Pharmas Among Biggest Cash Hoarders, Moody’s Finds
This article was originally published in The Pink Sheet Daily
A Moody’s report lists seven pharmas among the 50 non-financial companies sitting on the largest piles of cash. These very big war chests hold the preferred currency, particularly for ex-U.S.pharma deal-making.
You may also be interested in...
Do high biotech share prices portend stock-heavy deal-making in lieu of all-cash transactions? Also, Biogen shares the risk with Eisai in an Alzheimer’s deal, while newly public Genocea and cell therapy specialist NeoStem both teamed with Harvard researchers.
An analysis of alliance deals in 2013 shows pharmas’ continued reliance on heavily structured deals, a strategy that has often frustrated biotechs looking to partner. But the appetite for new IPO listings may be giving them more options, provoking competitive deal terms from licensors.
In an analysis of non-financial sector U.S.-based companies, Moody’s ranks pharma a remote second to the tech sector in terms of aggregate cash held as of mid-2013. While capital expenditures lead the aggregate group’s spending priorities, dividends and share buybacks top pharma’s list. Companies keep most of their cash overseas, a continuing trend.