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Acceleron (XLRN) Stock Up on Takeover Rumors for $11 Billion

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Shares of Acceleron Pharma Inc. jumped 6.69% to $178.87 on rumors of a potential takeover by a pharma giant.

Per a Bloomberg report, the company is in advanced discussions to be acquired by a pharma/biotech bigwig for $11 billion or $180 per share.

While the name of the bigwig wasn’t mentioned in the report, Bristol Myers Squibb (BMY - Free Report) , which already has owns an 11.5% stake in Acceleron, is an obvious suitor.

Acceleron is focused on the discovery, development, and commercialization of therapeutics to treat serious and rare diseases. The key focus areas are hematology, pulmonary, and neuromuscular.

Acceleron’s stock has gained 39.8% in the year so far against the industry’s decline of 2.5%.

Zacks Investment ResearchImage Source: Zacks Investment Research

The companies pursuing Accelereon are most likely being lured by its promising pipeline candidate — sotatercept — which is being evaluated for the treatment of pulmonary arterial hypertension.  Acceleron is executing on its phase III development of the same following positive results from the phase II study, PULSAR. The candidate is being developed in collaboration with Bristol Myers.

This apart, the company earns royalties on sales of Reblozyl (luspatercept-aamt), which has been developed as part of its global collaboration with Bristol Myers.  Reblozyl is approved for the treatment of anemia in in certain blood disorders. A potential acquisition by Bristol Myers will give it full commercialization rights to both drugs on successful development.

Per a report from The Wall Street Journal, pharma giant Merck (MRK - Free Report) is in advanced talks for acquiring Acceleron to boost its rare disease business.

PAH space represents potential and hence Acceleron is likely to be in the spotlight.  We remind investors that Johnson & Johnson (JNJ - Free Report) acquired Switzerland-based Actelion in 2017 for $30 billion to gain access to its PAH franchise.

While mergers & acquisitions have always taken centerstage in the biotech sector, there hasn’t been much happening on that front in the year so far, barring a few. However, as the economic situation improves, the pace is expected to pick up as pharma/biotech bigwigs constantly eye lucrative acquisitions to bolster their portfolio/pipeline and combat rivalry.

Acceleron currently carries a Zacks Rank #3 (Hold).  You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.



 


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