Regeneron Pharmaceuticals Inc (REGN), Sanofi SA (SNY), Arena Pharmaceuticals, Inc. (ARNA) & Three Companies Ripe for a Takeover

Half of it, at least
Last week’s announcement that Theravance Inc (NASDAQ:THRX) was splitting the company into two biotech companies makes the royalty holding company part of the split an easy target for an acquisition by GlaxoSmithKline plc (NYSE:GSK) , Thervance’s partner on lung drugs Breo and Anoro.

By putting the assets that Glaxo might not want into a separate company, Glaxo is free to buy the royalty holding company to gain full control of Breo and Anoro, avoiding paying out a royalty. Obviously, the price still has to be right, but it’s a much cleaner transaction than buying Theravance as a complete package.

It’s still just a bonus
Buying biotech companies just because you think they’ll get acquired is usually a bad idea. Onyx Pharmaceuticals, Inc. (NASDAQ:ONXX) for instance, has been rumored for years to be an acquisition target of its partner Bayer, but the biotech company has yet to be taken out.

Instead, look for solid biotech companies that you’d like to own forever. If you’re right about their potential, a partner will see it, too.

Of the three here, I like Regeneron Pharmaceuticals Inc (NASDAQ:REGN)’s prospects the best, although the quality doesn’t come cheap.

The article 3 Biotech Companies Ripe for a Takeover originally appeared on Fool.com.

Fool contributor Brian Orelli and The Motley Fool have no position in any of the stocks mentioned.

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