[NEW YORK] Wall Street is holding its breath for the rekindling of mergers and acquisitions (M&A) across the biotechnology and pharmaceutical sector after 2017 led to a pause in deal-making. Tax reform, particularly a lower levy on US companies’ overseas cash, may be the key to driving the return of M&A in 2018. “Choppy waters will likely continue, unless M&A saves the day,” RBC analysts led by Brian Abrahams wrote in their look ahead to next year.Goldman analysts led by Jami Rubin see a lower tax rate on repatriated cash, yielding about US$160 billion across the healthcare sector. That extra cash may be used for “aggressive capital allocation”; in addition to M&A, that cash could also be spent on buybacks and dividends, or a combination of the three Goldman predicted. Pfizer Inc, instead of announcing a new mega-deal, is ending the year by starting a US$10 billion share buyback programme and an increased dividend. Still, some analysts are hopeful after Roche’s US$1.7 billion bid earlier on Dec 26 for Ignyta. JPMorgan’s January healthcare conference in San Francisco is often a platform for partnerships and deals to be announced. Concern also abound that Democratic wins in mid-term elections may once again… Read full this story
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