Loxo takeover by Bayer not off the table, says Citi - InvestingChannel

Loxo takeover by Bayer not off the table, says Citi

Bayer’s (BAYRY) precedent for collaborations preceding acquisitions, as in the Algeta deal, implies an acquisition of Loxo Oncology (LOXO) is not off the table following yesterday’s collaboration announcement, Ciit analyst Yigal Nochomovitz tells investors in a research note. He notes that Bayer and Algeta entered into a collaboration in 2009 to commercialize the prostate cancer drug Xofigo, and in 2013 Bayer acquired Algeta for $2.9B. A similar situation is a possibility for Loxo in the future, the analyst contends. Nochomovitz says his Loxo valuation is largely intact following the Bayer deal. He keeps a Buy rating on the shares and trimmed his price target to $108 from $112. The stock closed yesterday down 4% to $79.84.