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Fly News Breaks for August 4, 2015
BXLT, SHPG
Aug 4, 2015 | 12:03 EDT
JPMorgan analyst James Gordon says he's surprised Shire (SHPG) chose to go after Baxalta (BXLT) rather than a biotech asset that could warrant a higher valuation multiple or a synergistic asset that would drive earnings accretion. Baxalta's focus on Haemophilia would increase Shire's rare disease exposure, but also its exposure to the "highly competitive" Haemophilia market, Gordon argues in a research note after Shire announced a hostile takeover offer for the recent Baxter (BAX) spinoff. Such a deal would bring mid teens earnings per share accretion, however, the analyst writes. He views Baxalta as not a "great strategic fit” for Shire. Gordon has an Overweight rating on the name. Shares of Shire are down $18.81 to $249.27 in midday trading.
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