But ThermoFisher (TMO $65.12) is Up 3.78% on Volume of 3.2M Shares
GenProbe (GPRO $84.10) down 2.9% sold off some of of the speculative gains from yesterday after ThermoFisherScientific (TMO) announced it was buying Phadia, a privately held Swedish diagnostic Company for $3.5B in cash. Phadia was sold by Pfizer in 2004 to private equity firms and eventually sold again to Cinven Ltd. in 2007 for $1.8B (side note: large cap drug companies are always in and out of the clinical diagnostics market and Pfizer was getting out).Phadia has been a long time leader in the allergy market and the ThermoFisher announcement clearly sees synergy from accretive earnings, a new growth market in Dx, under-served markets in the US and emerging markets and tax synergies. Phadia revenues were $525M which gives the deal a valuation of 6.7X Price/Sales. And like other M&A deals recently cheap money greases the skids as Barclays Capital is providing debt financing.So this means that Thermo will not buy GenProbe and makes Novartis (NVS) a more likely buyer although other names are still rumored. Novartis is already a big player in diagnostics.
Among the major integrated Dx/Rx large cap players are Abbott (ABT), Johnson and Johnson(JNJ), Novartis (NVS) and Roche (ROG.VX). GE though not in drugs is a major healthcare player.
Recent technological developments in genomics bring convergence on two fronts: companion diagnostics for targeting more effective therapies and application of genomics for clinical applications from leading tools companies such as Illumina (ILMN) and Life Technologies(LIFE)