What Are the Odds That Vertex Strikes a Big Acquisition Deal?
Vertex Pharmaceuticals (NASDAQ:VRTX) certainly has the cash to acquire smaller biotechs. However, there's also a possibility that the company could be an acquisition target itself. In this Motley Fool Live video recorded on June 23, Motley Fool contributors Keith Speights and Brian Orelli discuss what the odds are that Vertex is involved in a big acquisition within the next few years. Keith Speights: Brian, you're in San Diego, not Las Vegas. But I'm going to ask you to be an oddsmaker for a second here. Speights: Let's say the next five years. Orelli: Five years. I'd say maybe 1 in 4, 1 in 5 something in that range. I think it's probably a pretty good chance, maybe even 1 in 3 in the next year. If you've given me five years, I think that's probably a reasonable guess. I think they can certainly grow on their own. They could certainly become a has-been on their own, but I think at some point maybe it just depends on the valuation, whether big pharma wants to go out and buy the revenue as a form of income and what the valuation is of the company relative to the income that it's bringing in. Speights: Yeah. I guess they could start giving out a dividend or start buying back a ton of shares, but I feel they can probably do better by going out and licensing or acquiring a lot of drugs. Maybe it's a little bit lower because they might use the money for licensing instead of for acquisitions, but if we're talking about, just are they going to add to the pipeline, from outside of Vertex's drug discovery unit, I think that's a 100% guarantee.