By Bhanvi Satija and Maggie Fick
LONDON, Oct 10 (Reuters) - Wall Street is looking to
U.S. drugmaker Eli Lilly ( LLY ) and Anglo-Swedish rival
AstraZeneca ( AZN ) as the potential next in line after Pfizer ( PFE )
struck a deal with Donald Trump's administration to
lower drug prices last week.
Reuters spoke to seven healthcare analysts and investors.
Four said Lilly could be next to make a deal, while three
pointed to AstraZeneca ( AZN ). Others mentioned Merck ( MRK ), AbbVie ( ABBV )
, Regeneron and Bristol-Myers Squibb ( BMY ).
Reuters could not independently confirm any such deals were
in the offing, but drugmakers have been jostling to get a deal
after Pfizer's ( PFE ) September 29 agreement that pledged lower prices
via Medicaid for relief on tariffs on imported medicines.
Lucy Coutts, a UK-based investment director at wealth
manager JM Finn, predicted that AstraZeneca ( AZN ) could be next after
it broke ground on a $4.5 billion plant in Virginia this week
and is planning a U.S. listing of its shares.
"I'd like to think it will be AstraZeneca ( AZN ) given revenues
from U.S., its investment in manufacturing and R&D in the US and
implementing a dual listing on NYSE," she said.
Lilly said it did not have specific details to share about
its discussions with the administration at this time.
AstraZeneca ( AZN ) did not immediately respond to a Reuters' request
for comment.
READING THE PHARMA SECTOR TEA LEAVES
Reading the tea leaves with President Trump, however, is not
for the faint-hearted. The Pfizer ( PFE ) deal caught many in the
industry unaware, though most firms have been looking to get
into his good books amid threats of tariffs.
The Pfizer ( PFE ) deal boosted pharma sector shares, with Eli Lilly ( LLY )
the biggest gainer since then and AstraZeneca ( AZN ) second. Denmark's
Novo Nordisk, Pfizer ( PFE ) itself and Novartis
lag.
Reuters reported last week that the U.S. government is
pursuing deals across as many as 30 industries - including
pharmaceuticals. According to two sources, pharma executives are
receiving near-daily calls from senior government officials.
Gareth Powell, head of healthcare at London-based investment
fund Polar Capital, said that an announcement from Lilly could
be in the works, followed by AstraZeneca ( AZN ).
Eli Lilly ( LLY ) said last month it will invest $5 billion to build
a manufacturing facility in Virginia, part of a $27 billion U.S.
expansion over the next five years.
Several other pharmaceutical giants - including AstraZeneca ( AZN ),
Pfizer ( PFE ), Novartis, and Johnson & Johnson ( JNJ ) - have announced
U.S. investments this year.
Lilly and AstraZeneca ( AZN ) were among the 17 leading drug
companies who received a letter from Trump in July telling them
to slash prices to match those paid overseas.
Powell said Trump was close to the chief executive officers
of Lilly, Pfizer ( PFE ) and Regeneron, all U.S. firms.
"If you notice those 17 letters that he sent to pharma, he
crossed out the typed up names for Lilly, Pfizer ( PFE ) and Regeneron,
and wrote it in pen their names in a sort of more friendly
manner," he said.