AstraZeneca has obtained production capacity to manufacture 2 billion doses of a potential vaccine, while the experimental drug redesivir gilead has been approved by the U.S. government to treat patients hospitalized with severe covid-19.
Shares in Astrazeneca (Azn) fell by more than 2% in London, FTSE 100 (UKX) the index rose after Bloomberg reported the UK-based company made a preliminary approach last month to the U.S. firm Gilead (Brown). The two companies have a combined market value of nearly $140 billion.
Bloomberg warned that AstraZeneca had not specified financial terms for a deal. Its report also indicates that Gilead discussed the idea with advisors, but that the companies were not in formal discussions.
Both companies have performed well over the past year. AstraZeneca’s shares have risen about a third since June 2019, while Gilead’s shares have risen more than 15% over the same period. Gilead shares were up more than 3 percent in U.S. pre-market trading Monday.
Uncertainty caused by the coronavirus pandemic has dampened enthusiasm for mega-mergers. But some analysts see an argument for an increase in transactions in the coming months.
“Central banks now that financing costs are in a hurry, but the economic outlook [mergers and acquisitions] growth path will be tempting for many large companies,” said Jasper Lawler, head of research at London Capital Group.
