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4 Biotechs That Could Be Potential Takeover Targets in 2022
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Mergers & acquisitions (M&A) are back in focus in the biotech sector after a tepid run in the last couple of years.
Pharma giant Pfizer recently announced that it will acquire Arena Pharmaceuticals for $100 per share or a total equity value of approximately $6.7 billion to further expand its portfolio. Per rumors, South-Korean conglomerate Samsung Group is reportedly in talks to acquire Biogen (BIIB - Free Report) .
Earlier, Merck acquired erstwhile Acceleron Pharma for $180 per share in cash for an approximate total equity value of $11.5 billion to build its rare diseases portfolio.
The acquisition will give Merck access to Accelereon’s promising pipeline candidate — sotatercept — which is being evaluated for the treatment of pulmonary arterial hypertension (PAH), a progressive and life-threatening blood vessel disorder.
Sanofi has been quite active on the M&A front this year. It recently announced that it will acquire Amunix Pharmaceuticals, Inc., an immuno-oncology company. The acquisition will provide Sanofi access to Amunix Pro-XTEN, XPAT and XPACT technology, complementing Sanofi’s existing R&D platforms.
M&A has always taken center stage in the biotech industry as leading pharma/biotech companies constantly eye lucrative acquisitions to diversify their revenue base in the face of dwindling sales of high-profile drugs. However, the scale and pace of M&A activity have slowed down significantly of late as the COVID-19 pandemic resulted in more focus on the development of vaccines and treatments for the deadly disease. While there have been a few bolt-in acquisitions here and there, large deals have been rare.
Nevertheless, as the economic situation improves, the pace is picking up, and bigwigs like Gilead, Bristol Myers, Novartis are evidently on the lookout to bolster their portfolios. While oncology and immuno-oncology are the key areas of focus, treatments for rare diseases and gene-editing companies also promise potential, making them lucrative investment areas. Moreover, companies investing in mRNA technology are gaining a lot of attention, given the success of the technology in the development of COVID-19 vaccines.
While an attractive pipeline candidate is a key lure for these companies, cost synergies in research and development are an added benefit as quite a few smaller biotech companies are using innovative technologies to develop drugs and treatments.
Below we discuss companies that have promising drugs/candidates in the pipeline and could be potential takeover targets:
Image Source: Zacks Investment Research
BioMarin (BMRN - Free Report) has been on the takeover radar for quite some time now. The company's portfolio consists of a few commercialized products and multiple clinical and pre-clinical product candidates. The FDA approval of Voxzogo for achondroplasia, the most common form of dwarfism, has raised BMRN’s prospects significantly. It was also approved in the EU. Other approved drugs in the company’s portfolio continue to do well. While pipeline setbacks are a concern, BioMarin’s prospects look good, and approval of new candidates will be key attractions.
Adaptimmune , a clinical-stage biopharmaceutical company, is focused on the development of novel cancer immunotherapy products. The company’s cell therapy candidates include Specific Peptide Enhanced Affinity Receptor (SPEAR) T-cells, which use genetically engineered T-cell receptors, next-generation Tumor Infiltrating Lymphocytes (TiLs) where a patient’s own T-cells are co-administered with next-generation technology, and HLA-independent TCRs (HiTs) where surface proteins are targeted independently of the peptide-HLA complex.
The pipeline progress has been encouraging. Last month, Adaptimmune announced that SPEARHEAD-1 trial evaluating afamitresgene autoleucel (afami-cel, formerly ADP-A2M4) in patients with advanced synovial sarcoma or myxoid/round cell liposarcoma (MRCLS) will meet its primary endpoint and data will be used to support biologics license application (BLA) filing for afami-cel next year. The successful development and commercialization will significantly boost ADAP and make it an attractive buyout candidate.
CRISPR Therapeutics (CRSP - Free Report) is one of the leading gene-editing companies. It is focused on developing transformative gene-based medicines for serious diseases using its proprietary CRISPR/Cas9 platform. CRISPR’s lead product candidate, CTX001, is an investigational, autologous, gene-edited hematopoietic stem cell therapy that is being evaluated for the treatment of transfusion-dependent beta thalassemia (TDT) and severe sickle cell disease (SCD). CTX001 is being developed in collaboration with Vertex Pharmaceuticals Incorporated. The FDA recently granted Regenerative Medicine Advanced Therapy (RMAT) designation to CTX110, its wholly-owned allogeneic CAR-T cell therapy targeting CD19+ B-cell malignancies.
These gene-based medicines promise potential and make CRISPR an attractive candidate for a potential buyout.
Alnylam Pharmaceuticals (ALNY - Free Report) is another company that should attract eyeballs. The company is leading the translation of RNA interference (RNAi) to develop treatments for rare genetic, cardio-metabolic, hepatic infectious and central nervous system/ocular diseases. Alnylam’s commercial RNAi therapeutic products are Onpattro (patisiran), Givlaari (givosiran), Oxlumo (lumasiran), as well as Leqvio (inclisiran), with partner Novartis, which has obtained global rights to develop, manufacture and commercialize inclisiran under a license and collaboration agreement. The uptake of all these products has been good. ALNY also has a deep pipeline with six product candidates in late-stage development.
Image: Bigstock
4 Biotechs That Could Be Potential Takeover Targets in 2022
Mergers & acquisitions (M&A) are back in focus in the biotech sector after a tepid run in the last couple of years.
Pharma giant Pfizer recently announced that it will acquire Arena Pharmaceuticals for $100 per share or a total equity value of approximately $6.7 billion to further expand its portfolio. Per rumors, South-Korean conglomerate Samsung Group is reportedly in talks to acquire Biogen (BIIB - Free Report) .
Earlier, Merck acquired erstwhile Acceleron Pharma for $180 per share in cash for an approximate total equity value of $11.5 billion to build its rare diseases portfolio.
The acquisition will give Merck access to Accelereon’s promising pipeline candidate — sotatercept — which is being evaluated for the treatment of pulmonary arterial hypertension (PAH), a progressive and life-threatening blood vessel disorder.
Sanofi has been quite active on the M&A front this year. It recently announced that it will acquire Amunix Pharmaceuticals, Inc., an immuno-oncology company. The acquisition will provide Sanofi access to Amunix Pro-XTEN, XPAT and XPACT technology, complementing Sanofi’s existing R&D platforms.
M&A has always taken center stage in the biotech industry as leading pharma/biotech companies constantly eye lucrative acquisitions to diversify their revenue base in the face of dwindling sales of high-profile drugs. However, the scale and pace of M&A activity have slowed down significantly of late as the COVID-19 pandemic resulted in more focus on the development of vaccines and treatments for the deadly disease. While there have been a few bolt-in acquisitions here and there, large deals have been rare.
Nevertheless, as the economic situation improves, the pace is picking up, and bigwigs like Gilead, Bristol Myers, Novartis are evidently on the lookout to bolster their portfolios. While oncology and immuno-oncology are the key areas of focus, treatments for rare diseases and gene-editing companies also promise potential, making them lucrative investment areas. Moreover, companies investing in mRNA technology are gaining a lot of attention, given the success of the technology in the development of COVID-19 vaccines.
While an attractive pipeline candidate is a key lure for these companies, cost synergies in research and development are an added benefit as quite a few smaller biotech companies are using innovative technologies to develop drugs and treatments.
Below we discuss companies that have promising drugs/candidates in the pipeline and could be potential takeover targets:
BioMarin (BMRN - Free Report) has been on the takeover radar for quite some time now. The company's portfolio consists of a few commercialized products and multiple clinical and pre-clinical product candidates. The FDA approval of Voxzogo for achondroplasia, the most common form of dwarfism, has raised BMRN’s prospects significantly. It was also approved in the EU. Other approved drugs in the company’s portfolio continue to do well. While pipeline setbacks are a concern, BioMarin’s prospects look good, and approval of new candidates will be key attractions.
Adaptimmune , a clinical-stage biopharmaceutical company, is focused on the development of novel cancer immunotherapy products. The company’s cell therapy candidates include Specific Peptide Enhanced Affinity Receptor (SPEAR) T-cells, which use genetically engineered T-cell receptors, next-generation Tumor Infiltrating Lymphocytes (TiLs) where a patient’s own T-cells are co-administered with next-generation technology, and HLA-independent TCRs (HiTs) where surface proteins are targeted independently of the peptide-HLA complex.
The pipeline progress has been encouraging. Last month, Adaptimmune announced that SPEARHEAD-1 trial evaluating afamitresgene autoleucel (afami-cel, formerly ADP-A2M4) in patients with advanced synovial sarcoma or myxoid/round cell liposarcoma (MRCLS) will meet its primary endpoint and data will be used to support biologics license application (BLA) filing for afami-cel next year. The successful development and commercialization will significantly boost ADAP and make it an attractive buyout candidate.
CRISPR Therapeutics (CRSP - Free Report) is one of the leading gene-editing companies. It is focused on developing transformative gene-based medicines for serious diseases using its proprietary CRISPR/Cas9 platform. CRISPR’s lead product candidate, CTX001, is an investigational, autologous, gene-edited hematopoietic stem cell therapy that is being evaluated for the treatment of transfusion-dependent beta thalassemia (TDT) and severe sickle cell disease (SCD). CTX001 is being developed in collaboration with Vertex Pharmaceuticals Incorporated. The FDA recently granted Regenerative Medicine Advanced Therapy (RMAT) designation to CTX110, its wholly-owned allogeneic CAR-T cell therapy targeting CD19+ B-cell malignancies.
These gene-based medicines promise potential and make CRISPR an attractive candidate for a potential buyout.
Alnylam Pharmaceuticals (ALNY - Free Report) is another company that should attract eyeballs. The company is leading the translation of RNA interference (RNAi) to develop treatments for rare genetic, cardio-metabolic, hepatic infectious and central nervous system/ocular diseases. Alnylam’s commercial RNAi therapeutic products are Onpattro (patisiran), Givlaari (givosiran), Oxlumo (lumasiran), as well as Leqvio (inclisiran), with partner Novartis, which has obtained global rights to develop, manufacture and commercialize inclisiran under a license and collaboration agreement. The uptake of all these products has been good. ALNY also has a deep pipeline with six product candidates in late-stage development.
Alnylam currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.