Following the recently-announced Teva Pharmaceutical TEVA 2.55% buyout of Allergan Plc AGN 2.7%, RBC Capital Markets analyst Michael Yee released a report discussing the potential for large-cap biotech companies to become buyout targets for specialty pharmaceutical companies. According to Yee, no such deal would even be feasible until “well into 2016.”

Amgen Speculation

Yee notes that Amgen Inc AMGN 0.13%‘s stock surged 4.4 percent on Monday, outperforming its large-cap peers. Conversations with investors seem to indicate that there is a belief in the market that the Allergan deal is a sign that large-cap biotech companies like Amgen could become buyout targets as well.

According to Yee, an Amgen buyout it theoretically possible on paper, but many fund managers he has spoken to see a potential deal as highly unlikely.

Fundamental Case

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