Speculation that Novartis may acquire Cubist for $26 per share, or a total of $1.6 billion, drove Cubist’s shares up as much as 19 percent. According to market rumours, a deal could be announced on April 6.

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The companies already have a partnership for Cubist’s antibiotic Cubicin, which is marketed by Novartis in Europe and other regions outside the US. However, ThinkEquity analyst Brian Skorney suspects the purchase may not be ideal for Novartis. He suggested the drugmaker has not made Cubicin a priority, which may explain the product’s weak sales in Europe. In addition, Gregory Wade, an analyst at Wedbush Morgan, noted that the Swiss drugmaker recently purchased Protez Pharmaceuticals, which has a product that could be considered a rival to Cubicin.

By contrast, Jefferies & Co. analyst Eun Yang said revenue for Cubicin gained 45 percent last year to $414.7 million in the US, and “if [Novartis wants] to get their hands on US sales, why not?” Neither drugmaker commented on the speculation.

Source: FirstWord

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