- Bernstein analyst Geoffrey Porges says that Gilead should "pull the trigger" and purchase Vertex in order to offset what he calls the "inevitable decline" of Gilead's HIV and hepatitis C franchises.
- Porges says that Gilead will need to pay between $38 billion and $45 billion to buy a company with $7 billion in revenue potential, according to the WSJ.
- Bernstein analysts have forecast revenue losses of 30% to 40% for Gilead between 2017 and 2021.
According to Porges, one factor working in Gilead's favor is surplus cash. He sees Vertex as an ideal acquisition target for Gilead, because of its size and its focus on cystic fibrosis, an area in which Gilead has already established a product and commercial infrastructure.
Moreover, Porges feels that investors would be open to a buy-out offer because of their concerns that Vertex is not sufficiently diversified.
As BioPharma Dive noted in an in-depth piece exploring four big potential biopharma deals we might see this year, it's important for Gilead to pursue some pipeline diversification, especially to beef up the company's relatively meager cancer portfolio. Another acquisition target might be hematological cancers specialist Seattle Genetics.