M&A activity for small and mid-cap biotechs could pick up in 2010, JP Morgan analyst says

Earlier this year, J.P. Morgan’s senior biotech analyst, Geoff Meacham gave his macro view of the biotech industry. “M&A activity for small and mid-cap biotech may pick up, driven by Pharma but also driven by large cap biotechs,” he said. “In this report, we’ve stressed pipelines and sustainability of growth, but as growth in the large cap group matures, increased cash flow generation may fuel increased M&A activity.”

A few notable names with “high strategic values” included: Acorda Therapeutics, Inc. (Nasdaq: ACOR), AMAG Pharmaceuticals, Inc. (Nasdaq: AMAG), OSI Pharmaceuticals, Inc. (Nasdaq: OSIP), Medivation, Inc. (Nasdaq: MDVN), United Therapeutics Corp. (Nasdaq: UTHR), Vertex Pharmaceuticals, Inc. (Nasdaq: VRTX), Human Genome Sciences, Inc. (Nasdaq: HGSI), Seattle Genetics, Inc. (Nasdaq: SGEN) and Savient Pharmaceuticals, Inc. (Nasdaq: SVNT).”

Lehman bullish on small, mid-caps, too:

“Opportunities for the U.S. biotechnology group are selective and we tend to prefer small-mid cap stocks over large-cap stocks overall in 1H10,” said Lehman Brothers analyst, Jim Birchenough. “Within the large cap group our rank order of preference is Amgen, Genzyme and Celgene as top picks with Gilead and Biogen Idec viewed less favorably. Top mid-cap picks include Amylin Pharmaceuticals (Nasdaq: AMLN), Cephalon (Nasdaq: CEPH), Human Genome Sciences (Nasdaq: HGSI), Onyx Pharmaceuticals (Nasdaq: ONXX) and Regeneron Pharmaceuticals(Nasdaq: REGN) while we are less positive on Theravance (Nasdaq: THRX), OSI Pharmaceuticals (Nasdaq: OSIP) and Zymogenetics(Nasdaq: ZGEN).

Biotech Buzz Stocks for 2010:

Here are a few of our favorite small and mid cap biotech Buzz Stocks for 2010:  Akorn, Inc. (Nasdaq: AKRX), Neurocrine Biosciences, Inc. (Nasdaq: NBIX), Metabolix, Inc. (Nasdaq: MBLX), and Raptor Pharmaceuticals Corp.

Let us know your top biotech picks!

Tags: acorda therapeutics, amag pharmaceuticals, amlyn pharmaceuticals, biotech, cephalon, human genome sciences, inc, industry outlook, jp morgan, lehman brothers, medication, onyx pharmaceuticals, osi pharmaceuticals, regeneron pharmaceuticals, savient pharmaceuticals, seattle genetics, united therapeutics corp, vertex

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