00:00You've got the pharma world covered underneath your fingertips looking at a
00:03deal today of Merck buying turns what is turns do and why are they interested in
00:08them so turns is developing a drug for a type of blood cancer and it makes a lot
00:12of sense that Merck is buying this because their best-selling drug which
00:15is also the world the world's best-selling drug Keytruda is coming
00:18off patent in a few years Keytruda contributed like 31 billion dollars or
00:22half about half of Merck's revenue last year so they've been aggressively doing
00:26M&A to try to replenish their pipeline and the thing about turns is it's
00:29drug is not yet approved but analysts say if it does get approved they expect
00:33that it will reach peak sales of several billion dollars by the end of this
00:37decade so it could dovetail nicely with Keytruda coming off patent and so that
00:41the thought is Merck is doing this you know as a way to make sure it has all
00:44its eggs and in different baskets it's something that you've been discussing on
00:47the show a lot this idea that we're reaching a patent cliff and big pharma
00:50companies need to do something about it and M&A is a useful route for that so the
00:54deal size six point seven billion dollars are valuations looking pretty rich as a
00:59deal environment really starts to whip up and more pharma companies are looking
01:02for replacements you know it's interesting because the premium on this
01:06deal compared to where it was trading yesterday was actually one or two
01:10percent but if you look at where it was compared to earlier in the year you know
01:13it was something like 50 percent and that's because there is some of this M&A
01:17speculation already built into a lot of biotech stocks and so it'll be
01:20interesting to see you know how many other buyers follow suit here we did hear
01:26that it was a competitive process you know early on but at the end it seemed
01:29like it really was just Merck unless they're speculating or wondering if
01:33someone else will jump in that's always the the big question I don't know if I
01:36would bet on that
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