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How Much Could Medivation Sell For? Wall Street Speculates

Shares of drugmaker Medivation ( MDVN ) soared more than 20% Thursday to a nearly three-month high on rumors that the company is fending off suitors, leading Wall Street to speculate on how much the company might go for. Late Wednesday, Bloomberg — citing anonymous sources — reported that Medivation hired bankers to defend against takeover interest. Reuters, also citing anonymous sources, said that Medivation had been working with JPMorgan ( JPM ). Medivation stock was up 23% in afternoon trading on the stock market today , near 46. Bloomberg mentioned Sanofi ( SNY ) as a possible buyer. Credit Suisse analyst Vamil Divan wrote in a research note that Sanofi made sense as a buyer, since Medivation’s prostate-cancer treatment Xtandi and its pipeline of other cancer treatments would fit Sanofi’s existing cancer franchise. “We model Medivation worth $55 (per share) to Sanofi ($65 with Sanofi’s 23% tax rate),” Divan wrote. “We see Sanofi’s Taxotere sales force potentially increasing Medivation sales 2% and assume a 20% reduction in Medivation’s R&D and 40% reduction in Medivation’s SG&A (sales, general & administrative expenses). We note a 12% tax-rate benefit over Medivation (23% vs 35%).” Divan added that the greatest synergies would actually come with  AstraZeneca ( AZN ), given its market-leading sales force for its prostate-cancer drug Casodex. He estimated that Medivation would be worth $59 a share to AstraZeneca, or $75 with its 16% tax rate.  Roche ( RHHBY ), which has a cancer franchise but not in prostate, would do well to pay $54 to $60 a share. Jefferies analyst Biren Amin made a similar calculation and came up with a $51-a-share price for Sanofi, and the same for a hypothetical buyout by Bayer ( BAYRY ). He also considered big biotech Amgen ( AMGN ) as a possible buyer, calculating a $54-a-share value to that company. However, Amin also wrote that if the companies adopt a “rose-colored glasses” view of Medivation’s potential, with U.S. Xtandi sales peaking at $5.5 billion, it could be worth $71 a share to Sanofi and Bayer, and $75 to Amgen. Shares of Amgen and Bayer were up a fraction Thursday afternoon, while Sanofi stock was down 1%.

Facebook’s Oculus Rift Unveiled: Texas Instruments, Cypress Inside

Wall Street largely yawned Thursday after an iFixit teardown showed that Facebook ( FB )-owned Oculus Rift totes chips from STMicroelectronics ( STM ), Texas Instruments ( TXN ) and Cypress Semiconductor ( CY ). In afternoon trading on the stock market today , STMicroelectronics stock was up 1%, but shares of Texas Instruments and Cypress were down 1%. Shares of graphics chipmakers Nvidia ( NVDA ) and Advanced Micro Devices ( AMD ) were both down a fraction. Their GPUs (graphics processing units) are recommended for installation in PCs running the Rift headset. Oculus’ virtual reality headset has been in development for four years, according to iFixit, which also dismantled two earlier developmental versions. Facebook acquired Oculus in July 2014 for $2 billion. The Rift was finally unveiled March 28. On Wednesday, iFixit’s teardown sent shares of Cypress and Texas Instruments up as much as 5.8% and 2.4%, with both ending the day up about 1.6%. Cypress supplies a hub controller, which allows multiple USB-connected devices to be plugged in at once. Texas Instruments’ input comes in the form of an LED driver, which controls for image brightness and grayscale. STMicroelectronics supplied the Rift with an ARM-based microcontroller. But STMicroelectronics stock fell 1.1% Wednesday. Shares of Advanced Micro Devices and Nvidia flew as much as 4.2% and 2.4% Wednesday, before closing flat and up 1.1%, respectively. Image provided by Shutterstock .

Salesforce.com Gets A Nod From IBM, Investors Like Fed Deal More

Nothing quite like a BPA — blanket purchase agreement — from the federal government to pick up your Wednesday. So on Thursday morning, investors in enterprise software developer  Salesforce.com ( CRM ) didn’t seem overly impressed with IBM ‘s ( IBM ) vote of confidence in Salesforce by buying a loyal Salesforce business partner. After riding Salesforce stock up 2.8% to 74.30 on the BPA announcement Wednesday, sellers let the stock ease back a fraction, as of early afternoon in the stock market today , to near 74 — still only 11% off a record high of 82.90 set Nov. 19. “While neither announcement is necessarily ‘needle moving’ on its own, we believe the combination helps to support our long-term view that CRM is becoming an increasingly strategic partner to its customers, driving ‘stickier’ relationships and larger deal sizes,” Evercore ISI analyst Kirk Materne said in a Thursday research note. IBM confirmed Thursday it will buy New York City-based Bluewolf, Salesforce’s first consulting service partner in 2001, now with 500 employees and 12 global offices. It’s still one of Salesforce’s top cloud implementation services. Terms were not disclosed. The leader in customer relationship management software, Salesforce is one of the highest-rated enterprise software companies. IBM stock was up 2.5%, near 152.50, in afternoon trading Thursday. “I’m so proud of Eric, who built Bluewolf from a startup,” said Salesforce CEO Marc Benioff in IBM’s announcement, referring to Eric Berridge, CEO of Bluewolf. Bluewolf will join IBM Global Business Services’ Interactive Experience (iX) practice “to form a deeper consulting capability for clients adopting the innovative Salesforce solutions,” IBM said. Salesforce Notches Big Federal Contract Salesforce on Wednesday said the federal Health and Human Services Department’s BPA was worth $100 million. “HHS operating staff and divisions can purchase Salesforce through a central purchasing vehicle to help digitally transform and connect with their citizens in new ways,” Salesforce said in its announcement. The $100 million pact is equivalent to about 1.5% of Salesforce’s $6.67 billion in annual sales. In December, Salesforce announced it had landed a $503 million BPA from the federal General Services Administration. Evercore ISI maintains a buy rating on Salesforce.com, with a 95 price target. “We believe the continued roll-up of systems integrators specializing in Salesforce deployments is a positive sign in terms of the demand for the company’s solutions among larger enterprises, while the government contracts highlight the continued success of CRM’s vertically focused go-to-market strategy,” Evercore ISI’s Materne said. “All in all, we continue to believe that the long-term narrative based on (about) 20% top line growth, 100-200 (basis points) of annual operating margin expansion, and mid-20% (operating cash flow) growth remains intact and continue to see a compelling risk/reward when looking out over the next 12 months.”