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Aerie (AERI) Rallies 205.6% in the Past Three Months: Here's Why

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Shares of Aerie Pharmaceuticals have skyrocketed in the past three months, outpacing other medical stocks in the industry after the company announced its acquisition deal with Alcon Pharmaceuticals (ALC - Free Report) .

AERI shares have surged 137.5% in the past month against the industry’s decline of 2.6%.

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Aerie recently announced that eye-care company Alcon has agreed to acquire the former for $15.25 per share, equating to a value of approximately $770 million, for the deal. With the acquisition, Alcon will be further strengthening its ophthalmology portfolio.

Post the announcement, shares were up owing to investors’ positive outlook about the premium offering.

Aerie currently has two marketed products in its portfolio, Rhopressa and Rocklatan, both used to treat glaucoma and/or ocular hypertension.

Though the franchise product is yet to have blockbuster sales, it makes Aerie a decent amount of money. Per the company’s recent financial guidance for the full year of 2022, Aerie expects revenues between $130-$140 million from the glaucoma franchise.

Aerie also has several pipeline candidates in the mid-stage to late-stage development phases.

Earlier in August, Aerie dosed its first patient in the phase III COMET-3 study evaluating its pipeline candidate AR-15512 ophthalmic solution as a treatment for the signs and symptoms of dry eye disease (DED). The company intends to complete the registration program of AR-15512 in 2023, and if clinical success is achieved, it also intends to file a new drug application (“NDA”) with the FDA in 2024.

The company has another pipeline candidate AR-13503 SR (Rho kinase and protein kinase C inhibitor sustained-release implant), in its portfolio. The candidate is being evaluated for the treatment of wet age-related macular degeneration (wet AMD) and diabetic macular edema (DME) in the first-in-human clinical study that is currently ongoing.

Through the transaction, Alcon will add not only Rocklatan and Rhopressato its portfolio but also AR-15512, AR-1105, AR-13503 Sr, and a pipeline of other preclinical ophthalmic pharmaceutical product candidates.

The acquisition is set to be completed in the fourth quarter of 2022, subject to approval from Aerie’s stockholders. However, given the rich premium, shareholders are unlikely to object to the deal.

Aerie currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

 

August has been witnessing a number of takeovers in the biopharma industry.

Amgen (AMGN - Free Report) on Aug 4, announced that it is all set to acquire ChemoCentryx , for $52 per share in cash, amounting to approximately $3.7 billion.

The acquisition will add ChemoCentryx’s newly approved drug, Tavneos (avacopan), for treating antineutrophil cytoplasmic antibody (ANCA) associated vasculitis, to Amgen’s inflammation and nephrology portfolio. In addition, ChemoCentryx also has three early-stage drug candidates in its portfolio.

Pfizer (PFE - Free Report) has also entered into a definitive agreement with Global Blood Therapeutics, wherein the former will acquire the latter for approximately $5.4 billion.

With the acquisition, Pfizer will be adding GBT’s sole marketed drug, Oxbryta (voxelotor), for the treatment of sickle cell disease (“SCD”), as well as GBT’s late-stage SCD candidates GBT601 and inclacumab, to its portfolio.


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