Roche Investors Should Breathe Easier After InterMune Acquisition
NEW YORK (TheStreet) -- On Sunday, Swiss drugmaker Roche Holding
Roche finally responded by announcing it had picked off InterMune
Roche stock closed Friday at $36.32, down 0.33%. Shares have gained 6% on the year to date, almost half of the health care sector's 11% gain, according to Morningstar.
Roche's stock has grossly underperformed rivals like AstraZeneca
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For Roche, whose shares have traded sideways since February, investors have wondered if there was any value left. Despite the relative underperformance in the shares, the stock was still expensive at a price-to-earnings ratio of 20.
Making matters worse, until Sunday, management had done little to differentiate the company from the likes of, say, GlaxoSmithKline
This deal for InterMune, however, changes the landscape.
In InterMune, Roche saw an opportunity it couldn't pass up, even at a 38% premium to InterMune's most recent closing price. It's not a cheap deal. What I think is more important to consider, though, is the value InterMune will bring -- whether on its own strengths or as a value-add to Roche's reparatory assets in Xolair (used to treat asthma) and Pulmozyme (used to treat cystic fibrosis).