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The Zacks Analyst Blog Highlights: BioMarin Pharmaceutical, uniQure, REGENXBIO and Deciphera Pharmaceuticals
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For Immediate Release
Chicago, IL – December 18, 2020 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: BioMarin Pharmaceutical Inc. (BMRN - Free Report) , uniQure N.V. (QURE - Free Report) , REGENXBIO Inc. (RGNX - Free Report) and Deciphera Pharmaceuticals, Inc. (DCPH - Free Report) .
Here are highlights from Thursday’s Analyst Blog:
4 Biotechs That Could Be Potential Acquisition Targets Next Year
Merger and acquisitions (M&A) have been tepid so far in 2020 following a blockbuster 2019, which witnessed two mega-merger deals. There have been several small ticket acquisitions in 2020 including some billion-dollar offers. The COVID-19 pandemic resulted in a shift in focus to development of vaccine and treatments for the deadly disease, which has taken 1.65 million lives so far.
However, recently AstraZeneca announced the biggest deal of the year, offering to buy biotech major, Alexion Pharmaceuticals for almost $39 billion. Another pharma giant, Eli Lilly, followed in with a billion-dollar offer to buy gene therapy biotech, Prevail Therapeutics.
Both AstraZeneca and Lilly, and other pharma companies that announced M&A deals earlier this year are particularly looking to diversify their pipeline into newer avenues of drug discovery and development. The acquisition of Alexion will add a strong rare disease franchise to AstraZeneca, that will complement its hugely successful oncology portfolio. With the acquisition of Alexion, AstraZeneca is likely to gain 10 promising candidates which will likely be launched by 2023. Meanwhile, the acquisition of Prevail Therapeutics will add pre-clinical and clinical-stage gene therapy programs to Lilly’s pipeline, a new and attractive avenue.
Given that it takes several years and millions of dollars to develop new therapeutics from scratch, large pharmaceutical companies, sitting on huge piles of cash, prefer to buy innovative small/mid cap biotech companies to build out their pipelines. We expect other pharma companies to follow suit to boost their pipeline amid rising competition and dwindling sales of legacy drugs. The focus will primarily be on companies with either rare disease candidate or gene therapies in their pipeline.
Companies with pipeline candidates that target rare disease are likely to demand higher price due to lower competition. Meanwhile, gene therapies are in focus with several companies targeting to develop a one-time gene therapy-based treatment for diseases. This newer avenue of treatment also has potential to earn high revenues as very few companies have been successful in developing an effective gene therapy. Cost synergies in research and development (R&D) plus sales and marketing are also added benefits.
Moreover, several companies in the biotech sector have taken a beating in 2020 due to the COVID-19 pandemic that has disrupted clinical studies and hurt sales of many drugs. Below we discuss companies that have a gene therapy or rare disease / rare cancer pipeline candidate in their pipeline. Moreover, stocks of these companies have not fully recovered the stock-market crash in March 2020, suggesting attractive valuations.
BioMarin Pharmaceutical
Companies that have a product portfolio/pipeline of rare disease drugs are in great demand as it is a less competitive space and the expensive treatments can bring in huge profits. BioMarin is one such drug developer. Its market cap is $15.4 billion.
BioMarin has six commercially approved rare disease drugs with some more in the pipeline. The company also has gene therapies in its pipeline. Although the company’s lead gene therapy candidate, roctavian, for treating hemophilia A received a complete response letter (“CRL”) in May 2020, the company believes that the candidate will receive an approval following availability of required data. The CRL asked for two-year follow-up data from the phase III study evaluating it which will be available late next year. Progress toward its potential approval may attract acquisition offers.
This company is a promising player in the gene therapy space. It is engaged in creating a pipeline of innovative gene therapies that have been developed both internally and through its collaboration, focused on cardiovascular diseases, with Bristol Myers-Squibb. The company’s lead candidate AMT-061, an experimental AAV5-based gene therapy incorporating the FIX-Padua variant, is being evaluated in the phase III HOPE-B pivotal study for the treatment of patients with severe and moderately severe hemophilia B.
Uniqure has a market cap of $2.1 billion. Stock of this Zacks Rank #3 company is down 33.6% year to date.
REGENXBIO
The company is a clinical-stage biotechnology company that focuses on the development, commercialization and licensing of recombinant adeno-associated virus gene therapy. The company’s most advanced candidate, RGX-314, is being evaluated in a phase I/IIa for treating wet age-related macular degeneration (“AMD”). Apart from RGX-314, the company is also developing three other gene therapy candidates for treating certain rare neurological symptoms.
REGENXBIO’s market cap is $1.6 billion. Currently, the company carries a Zacks Rank #3. So far this year, shares have gained 5.9%.
Deciphera Pharmaceuticals
The company’s lead pipeline candidate, Qinlock received FDA approval in May 2020 for the treatment of advanced gastrointestinal stromal tumor (“GIST”), a rare form of cancer. The company is also developing the drug in a late-stage study for treating GIST in a different treatment setting. It also has several pipeline candidates targeting oncology indications.
This Zacks Rank #3 company has a market cap of $3.2 billion. The stock is down 10.5% so far this year.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights: BioMarin Pharmaceutical, uniQure, REGENXBIO and Deciphera Pharmaceuticals
For Immediate Release
Chicago, IL – December 18, 2020 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: BioMarin Pharmaceutical Inc. (BMRN - Free Report) , uniQure N.V. (QURE - Free Report) , REGENXBIO Inc. (RGNX - Free Report) and Deciphera Pharmaceuticals, Inc. (DCPH - Free Report) .
Here are highlights from Thursday’s Analyst Blog:
4 Biotechs That Could Be Potential Acquisition Targets Next Year
Merger and acquisitions (M&A) have been tepid so far in 2020 following a blockbuster 2019, which witnessed two mega-merger deals. There have been several small ticket acquisitions in 2020 including some billion-dollar offers. The COVID-19 pandemic resulted in a shift in focus to development of vaccine and treatments for the deadly disease, which has taken 1.65 million lives so far.
However, recently AstraZeneca announced the biggest deal of the year, offering to buy biotech major, Alexion Pharmaceuticals for almost $39 billion. Another pharma giant, Eli Lilly, followed in with a billion-dollar offer to buy gene therapy biotech, Prevail Therapeutics.
Both AstraZeneca and Lilly, and other pharma companies that announced M&A deals earlier this year are particularly looking to diversify their pipeline into newer avenues of drug discovery and development. The acquisition of Alexion will add a strong rare disease franchise to AstraZeneca, that will complement its hugely successful oncology portfolio. With the acquisition of Alexion, AstraZeneca is likely to gain 10 promising candidates which will likely be launched by 2023. Meanwhile, the acquisition of Prevail Therapeutics will add pre-clinical and clinical-stage gene therapy programs to Lilly’s pipeline, a new and attractive avenue.
Given that it takes several years and millions of dollars to develop new therapeutics from scratch, large pharmaceutical companies, sitting on huge piles of cash, prefer to buy innovative small/mid cap biotech companies to build out their pipelines. We expect other pharma companies to follow suit to boost their pipeline amid rising competition and dwindling sales of legacy drugs. The focus will primarily be on companies with either rare disease candidate or gene therapies in their pipeline.
Companies with pipeline candidates that target rare disease are likely to demand higher price due to lower competition. Meanwhile, gene therapies are in focus with several companies targeting to develop a one-time gene therapy-based treatment for diseases. This newer avenue of treatment also has potential to earn high revenues as very few companies have been successful in developing an effective gene therapy. Cost synergies in research and development (R&D) plus sales and marketing are also added benefits.
Moreover, several companies in the biotech sector have taken a beating in 2020 due to the COVID-19 pandemic that has disrupted clinical studies and hurt sales of many drugs. Below we discuss companies that have a gene therapy or rare disease / rare cancer pipeline candidate in their pipeline. Moreover, stocks of these companies have not fully recovered the stock-market crash in March 2020, suggesting attractive valuations.
BioMarin Pharmaceutical
Companies that have a product portfolio/pipeline of rare disease drugs are in great demand as it is a less competitive space and the expensive treatments can bring in huge profits. BioMarin is one such drug developer. Its market cap is $15.4 billion.
BioMarin has six commercially approved rare disease drugs with some more in the pipeline. The company also has gene therapies in its pipeline. Although the company’s lead gene therapy candidate, roctavian, for treating hemophilia A received a complete response letter (“CRL”) in May 2020, the company believes that the candidate will receive an approval following availability of required data. The CRL asked for two-year follow-up data from the phase III study evaluating it which will be available late next year. Progress toward its potential approval may attract acquisition offers.
The company’s stock is up 5.6% so far in 2020. BioMarin has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
uniQure
This company is a promising player in the gene therapy space. It is engaged in creating a pipeline of innovative gene therapies that have been developed both internally and through its collaboration, focused on cardiovascular diseases, with Bristol Myers-Squibb. The company’s lead candidate AMT-061, an experimental AAV5-based gene therapy incorporating the FIX-Padua variant, is being evaluated in the phase III HOPE-B pivotal study for the treatment of patients with severe and moderately severe hemophilia B.
Uniqure has a market cap of $2.1 billion. Stock of this Zacks Rank #3 company is down 33.6% year to date.
REGENXBIO
The company is a clinical-stage biotechnology company that focuses on the development, commercialization and licensing of recombinant adeno-associated virus gene therapy. The company’s most advanced candidate, RGX-314, is being evaluated in a phase I/IIa for treating wet age-related macular degeneration (“AMD”). Apart from RGX-314, the company is also developing three other gene therapy candidates for treating certain rare neurological symptoms.
REGENXBIO’s market cap is $1.6 billion. Currently, the company carries a Zacks Rank #3. So far this year, shares have gained 5.9%.
Deciphera Pharmaceuticals
The company’s lead pipeline candidate, Qinlock received FDA approval in May 2020 for the treatment of advanced gastrointestinal stromal tumor (“GIST”), a rare form of cancer. The company is also developing the drug in a late-stage study for treating GIST in a different treatment setting. It also has several pipeline candidates targeting oncology indications.
This Zacks Rank #3 company has a market cap of $3.2 billion. The stock is down 10.5% so far this year.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.