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Pharma Stock Roundup: Allergan Acquisitions in Focus, J&J to Buy Abbott's AMO
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Once again, acquisitions and deals were in focus in the pharma sector with Allergan announcing a couple of back-to-back deals including one worth up to $1.695 billion. Meanwhile, industry bellwether Johnson & Johnson (JNJ - Free Report) signed an agreement to acquire Abbott’s (ABT - Free Report) eye care segment.
Recap of the Week’s Most Important Stories
Allergan Announces Two NASH Focused Acquisition Deals: Less than a week after announcing its intention to acquire clinical-stage biotech company, Vitae, for approximately $639 million, Allergan announced a couple of acquisition deals targeting the nonalcoholic steatohepatitis or NASH market. Allergan intends to acquire clinical-stage biopharma company, Tobira, for up to $1.695 billion and privately-held biopharma company Akarna for an up-front payment of $50 million plus additional payments on the achievement of certain milestones (Read more: Allergan Buys NASH Therapy Maker Tobira at Huge Premium).
J&J to Strengthen Eye Care Presence with AMO Buy: Johnson & Johnson is planning to acquire Abbott’s Abbott Medical Optics (AMO) for $4.325 billion in cash. With this acquisition, slated to close in the first quarter of 2017, J&J is looking to strengthen its eye care segment -- AMO, which reported $1.1 billion of sales last year, has a presence in cataract surgery, laser refractive surgery and consumer eye health. The AMO deal will give J&J the opportunity to enter cataract surgery (Read more: J&J to Buy Abbott's Vision Care Unit for $4.3 Billion). Abbott is a Zacks Rank #2 (Buy) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Meanwhile, J&J gained FDA approval for its type II diabetes drug, Invokamet XR, a once-daily, fixed-dose combination of Invokana and metformin XR.
Sanofi Files Patent Infringement Lawsuit for Diabetes Drug: French drugmaker Sanofi (SNY - Free Report) has filed a patent infringement lawsuit against Merck which is seeking FDA approval for an insulin glargine drug product. According to Sanofi, Merck’s product infringes ten patents covering Lantus and Lantus SoloStar.
Sanofi’s diabetes segment is under immense pressure with Lantus facing increasing competitive pressure at the payor level and the presence of biosimilar competition in several European markets. Moreover, Lilly and Boehringer Ingelheim are expected to launch their insulin glargine product, Basaglar, in mid-December. Additionally, UnitedHealth announced that Basaglar will be covered on Tier 1 while Lantus, which was on Tier 3, will be excluded from formulary coverage in 2017. Another health care company, CVS Health, had announced in August that follow-on product Basaglar (approved in Europe as a biosimilar) will replace Lantus for the treatment of diabetes in its formulary list for 2017.
Pfizer, Lilly & Novo Nordisk Drugs Get CHMP Backing: Lilly (LLY - Free Report) , Novo Nordisk and Pfizer got positive opinions for their respective drugs from the European Medicine Agency's (EMA) Committee for Medicinal Products for Human Use (CHMP). The CHMP issued a positive opinion for the conditional approval of Lilly’s olaratumab – the company is seeking EU approval for the use of olaratumab plus doxorubicin for the treatment of adults with advanced soft tissue sarcoma (STS) not amenable to curative treatment with radiotherapy or surgery and who have not been previously treated with doxorubicin. Olaratumab has orphan drug status in the EU for STS, a rare and difficult to treat disease. Lilly is seeking FDA approval as well (Read more: Eli Lilly Gets Favorable CHMP Opinion for Olaratumab).
Meanwhile, Pfizer got a positive opinion for Ibrance for the treatment of women with HR+/HER2- locally advanced or metastatic breast cancer. Pfizer also announced positive top-line results on its biosimilar version of Remicade (Read more: Pfizer Breast Cancer Drug Ibrance Wins CHMP Backing).
Novo Nordisk got a positive CHMP opinion to extend the use of NovoRapid in diabetic children as young as one year old.
AstraZeneca Decides to Withdraw Cediranib EU Application: AstraZeneca (AZN - Free Report) announced the withdrawal of its regulatory application in the EU for its experimental ovarian cancer treatment, cediranib. The company decided to withdraw the application due to health authority questions that remained outstanding at a late stage of the review process (Read more: AstraZeneca Withdraws Cediranib Marketing Application in EU).
Meanwhile, the company presented positive results from a late-stage study evaluating a combination of Bydureon (GLP-1 receptor agonist) and Forxiga (SGLT-2 inhibitor) in type II diabetes patients. Results showed that the combination significantly reduced blood sugar, weight and systolic blood pressure compared to either medicine alone (Read more: AstraZeneca Diabetes Drug Combination Positive in Phase III).
All major pharma stocks were up over the last five trading days with the NYSE ARCA Pharmaceutical Index gaining almost 1%. Lilly gained 3.1% during this period. Over the last six months, Bristol-Myers (BMY - Free Report) declined 10.2% while AstraZeneca was up 21.7% (See the last pharma stock roundup here: Acquisitions & Deals Pick Up Pace, Aerie Up on Positive Data).
What's Next in the Pharma World?
Watch out for the usual pipeline and regulatory updates as well as deals and collaborations.
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Pharma Stock Roundup: Allergan Acquisitions in Focus, J&J to Buy Abbott's AMO
Once again, acquisitions and deals were in focus in the pharma sector with Allergan announcing a couple of back-to-back deals including one worth up to $1.695 billion. Meanwhile, industry bellwether Johnson & Johnson (JNJ - Free Report) signed an agreement to acquire Abbott’s (ABT - Free Report) eye care segment.
Recap of the Week’s Most Important Stories
Allergan Announces Two NASH Focused Acquisition Deals: Less than a week after announcing its intention to acquire clinical-stage biotech company, Vitae, for approximately $639 million, Allergan announced a couple of acquisition deals targeting the nonalcoholic steatohepatitis or NASH market. Allergan intends to acquire clinical-stage biopharma company, Tobira, for up to $1.695 billion and privately-held biopharma company Akarna for an up-front payment of $50 million plus additional payments on the achievement of certain milestones (Read more: Allergan Buys NASH Therapy Maker Tobira at Huge Premium).
J&J to Strengthen Eye Care Presence with AMO Buy: Johnson & Johnson is planning to acquire Abbott’s Abbott Medical Optics (AMO) for $4.325 billion in cash. With this acquisition, slated to close in the first quarter of 2017, J&J is looking to strengthen its eye care segment -- AMO, which reported $1.1 billion of sales last year, has a presence in cataract surgery, laser refractive surgery and consumer eye health. The AMO deal will give J&J the opportunity to enter cataract surgery (Read more: J&J to Buy Abbott's Vision Care Unit for $4.3 Billion). Abbott is a Zacks Rank #2 (Buy) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Meanwhile, J&J gained FDA approval for its type II diabetes drug, Invokamet XR, a once-daily, fixed-dose combination of Invokana and metformin XR.
Sanofi Files Patent Infringement Lawsuit for Diabetes Drug: French drugmaker Sanofi (SNY - Free Report) has filed a patent infringement lawsuit against Merck which is seeking FDA approval for an insulin glargine drug product. According to Sanofi, Merck’s product infringes ten patents covering Lantus and Lantus SoloStar.
Sanofi’s diabetes segment is under immense pressure with Lantus facing increasing competitive pressure at the payor level and the presence of biosimilar competition in several European markets. Moreover, Lilly and Boehringer Ingelheim are expected to launch their insulin glargine product, Basaglar, in mid-December. Additionally, UnitedHealth announced that Basaglar will be covered on Tier 1 while Lantus, which was on Tier 3, will be excluded from formulary coverage in 2017. Another health care company, CVS Health, had announced in August that follow-on product Basaglar (approved in Europe as a biosimilar) will replace Lantus for the treatment of diabetes in its formulary list for 2017.
Pfizer, Lilly & Novo Nordisk Drugs Get CHMP Backing: Lilly (LLY - Free Report) , Novo Nordisk and Pfizer got positive opinions for their respective drugs from the European Medicine Agency's (EMA) Committee for Medicinal Products for Human Use (CHMP). The CHMP issued a positive opinion for the conditional approval of Lilly’s olaratumab – the company is seeking EU approval for the use of olaratumab plus doxorubicin for the treatment of adults with advanced soft tissue sarcoma (STS) not amenable to curative treatment with radiotherapy or surgery and who have not been previously treated with doxorubicin. Olaratumab has orphan drug status in the EU for STS, a rare and difficult to treat disease. Lilly is seeking FDA approval as well (Read more: Eli Lilly Gets Favorable CHMP Opinion for Olaratumab).
Meanwhile, Pfizer got a positive opinion for Ibrance for the treatment of women with HR+/HER2- locally advanced or metastatic breast cancer. Pfizer also announced positive top-line results on its biosimilar version of Remicade (Read more: Pfizer Breast Cancer Drug Ibrance Wins CHMP Backing).
Novo Nordisk got a positive CHMP opinion to extend the use of NovoRapid in diabetic children as young as one year old.
AstraZeneca Decides to Withdraw Cediranib EU Application: AstraZeneca (AZN - Free Report) announced the withdrawal of its regulatory application in the EU for its experimental ovarian cancer treatment, cediranib. The company decided to withdraw the application due to health authority questions that remained outstanding at a late stage of the review process (Read more: AstraZeneca Withdraws Cediranib Marketing Application in EU).
Meanwhile, the company presented positive results from a late-stage study evaluating a combination of Bydureon (GLP-1 receptor agonist) and Forxiga (SGLT-2 inhibitor) in type II diabetes patients. Results showed that the combination significantly reduced blood sugar, weight and systolic blood pressure compared to either medicine alone (Read more: AstraZeneca Diabetes Drug Combination Positive in Phase III).
Performance
LARGE CAP PHARMA Industry Price Index
LARGE CAP PHARMA Industry Price Index
All major pharma stocks were up over the last five trading days with the NYSE ARCA Pharmaceutical Index gaining almost 1%. Lilly gained 3.1% during this period. Over the last six months, Bristol-Myers (BMY - Free Report) declined 10.2% while AstraZeneca was up 21.7% (See the last pharma stock roundup here: Acquisitions & Deals Pick Up Pace, Aerie Up on Positive Data).
What's Next in the Pharma World?
Watch out for the usual pipeline and regulatory updates as well as deals and collaborations.
Zacks' Best Investment Ideas for Long-Term Profit
Today you can gain access to long-term trades with double and triple-digit profit potential rarely available to the public. Starting now, you can look inside our stocks under $10, home run and value stock portfolios, plus more. Want a peek at this private information? Click here >>