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Biotech Stock Roundup: BIIB's Q4 Results, CBAY Up on GILD's Acquisition & Other Updates
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It has been a busy week for the biotech sector, with earnings results. Biogen (BIIB - Free Report) reported disappointing results for the fourth quarter. Concurrently, mergers and acquisitions continue to be in the spotlight as pharma and biotech majors look to bolster their product portfolio/pipeline.
Recap of the Week’s Most Important Stories:
Biogen’s Q4 Results: Biogen reported lower-than-expected results for the fourth quarter as both earnings and sales missed their respective estimates. Consequently, shares lost. Adjusted earnings per share (EPS) of $2.95 missed the Zacks Consensus Estimate of $3.16. Earnings also declined 27% year over year, attributable to closeout costs for Biogen’s controversial Alzheimer’s drug, Aduhelm, and lower revenues. On a constant currency basis, earnings were flat.
Total revenues came in at $2.39 billion, down 6% on a reported basis (5% on a constant-currency basis) from the year-ago quarter’s level. This was due to lower sales of all key drugs, multiple sclerosis drugs like Tecfidera and Tysabri, as well as spinal muscular atrophy drug, Spinraza. Sales missed the Zacks Consensus Estimate of $2.45 billion.
For 2024, revenues are expected to decline by a low to mid-single-digit percentage from the 2023 level. Core pharmaceutical revenues, comprising product sales plus Leqembi revenues, are expected to be flat year over year in 2024. Adjusted earnings are expected to be in the range of $15.00-$16.00, implying growth of approximately 5% at the midpoint of the guided range.
Biogen also announced that the European Commission (EC) has authorized Skyclarys (omaveloxolone) for the treatment of Friedreich’s ataxia in adults and adolescents aged 16 years and above.
Gilead to Acquire CBAY: Gilead Sciences, Inc. (GILD - Free Report) announced that it will acquire clinical-stage biopharmaceutical company, CymaBay Therapeutics, Inc. , for $32.50 per share in cash or a total equity value of $4.3 billion. Shares of CBAY surged on the acquisition news as the offer price represents 27% of the company’s closing share price as of Feb 9, 2024.
The acquisition, approved by both Gilead and CymaBay’s boards of directors, is expected to be closed in the ongoing quarter, subject to regulatory approvals and other customary closing conditions. The acquisition will add CymaBay’s investigational lead product candidate, seladelpar, to Gilead’s pipeline.
Seladelpar is an investigational, oral, selective peroxisome proliferator-activated receptor delta agonist, shown to regulate critical metabolic and liver disease pathways. The candidate is under review in the United States for the treatment of primary biliary cholangitis with a target action date of Aug 14, 2024. A potential approval will boost Gilead’s revenue growth. The transaction is likely to be neutral to Gilead’s bottom line in 2025 and significantly accretive thereafter.
Gilead has been looking to bolster its portfolio/pipeline since growth in its legacy HIV business slowed down and it suffered a few pipeline setbacks. However, investors probably deemed the deal to be expensive and the share price did not show any significant movement.
VRTX, CRSP Win EC Nod for Casgevy: Vertex Pharmaceuticals (VRTX - Free Report) and partner CRISPR Therapeutics (CRSP - Free Report) announced that the EC has granted conditional marketing approval to their one-shot gene therapy, Casgevy, for treating two debilitating blood disorders — sickle cell disease (SCD) and transfusion-dependent beta thalassemia (TDT).
The gene therapy is approved for patients 12 years and above with severe SCD characterized by recurrent vaso-occlusive crises or TDT, for whom hematopoietic stem cell (HSC) transplantation is appropriate and a human leukocyte antigen matched related HSC donor is not available. The FDA approved Casgevy for the SCD indication in December 2023 and for the TDT indication in January 2024.
CRISPR also announced that it will sell approximately $280 million of its common shares to a select group of institutional investors in a registered direct offering, at a price of $71.50 per share, representing a premium of greater than 10% to the company’s 30-day volume-weighted average price.
Performance
The Nasdaq Biotechnology Index has gained 0.24% in the past five trading sessions. Among the biotech giants, Moderna has lost 13.44% during the period. Over the past six months, shares of Vertex have surged 19.61%. (See the last biotech stock roundup here: Biotech Stock Roundup: GILD, AMGN & BMY’s Q4 Results, MOR Up on NVS Deal & More)
Image Source: Zacks Investment Research
What's Next in Biotech?
Stay tuned for more earnings and pipeline updates.
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Biotech Stock Roundup: BIIB's Q4 Results, CBAY Up on GILD's Acquisition & Other Updates
It has been a busy week for the biotech sector, with earnings results. Biogen (BIIB - Free Report) reported disappointing results for the fourth quarter. Concurrently, mergers and acquisitions continue to be in the spotlight as pharma and biotech majors look to bolster their product portfolio/pipeline.
Recap of the Week’s Most Important Stories:
Biogen’s Q4 Results: Biogen reported lower-than-expected results for the fourth quarter as both earnings and sales missed their respective estimates. Consequently, shares lost. Adjusted earnings per share (EPS) of $2.95 missed the Zacks Consensus Estimate of $3.16. Earnings also declined 27% year over year, attributable to closeout costs for Biogen’s controversial Alzheimer’s drug, Aduhelm, and lower revenues. On a constant currency basis, earnings were flat.
Total revenues came in at $2.39 billion, down 6% on a reported basis (5% on a constant-currency basis) from the year-ago quarter’s level. This was due to lower sales of all key drugs, multiple sclerosis drugs like Tecfidera and Tysabri, as well as spinal muscular atrophy drug, Spinraza. Sales missed the Zacks Consensus Estimate of $2.45 billion.
For 2024, revenues are expected to decline by a low to mid-single-digit percentage from the 2023 level. Core pharmaceutical revenues, comprising product sales plus Leqembi revenues, are expected to be flat year over year in 2024. Adjusted earnings are expected to be in the range of $15.00-$16.00, implying growth of approximately 5% at the midpoint of the guided range.
Biogen also announced that the European Commission (EC) has authorized Skyclarys (omaveloxolone) for the treatment of Friedreich’s ataxia in adults and adolescents aged 16 years and above.
Gilead to Acquire CBAY: Gilead Sciences, Inc. (GILD - Free Report) announced that it will acquire clinical-stage biopharmaceutical company, CymaBay Therapeutics, Inc. , for $32.50 per share in cash or a total equity value of $4.3 billion. Shares of CBAY surged on the acquisition news as the offer price represents 27% of the company’s closing share price as of Feb 9, 2024.
The acquisition, approved by both Gilead and CymaBay’s boards of directors, is expected to be closed in the ongoing quarter, subject to regulatory approvals and other customary closing conditions. The acquisition will add CymaBay’s investigational lead product candidate, seladelpar, to Gilead’s pipeline.
Seladelpar is an investigational, oral, selective peroxisome proliferator-activated receptor delta agonist, shown to regulate critical metabolic and liver disease pathways. The candidate is under review in the United States for the treatment of primary biliary cholangitis with a target action date of Aug 14, 2024. A potential approval will boost Gilead’s revenue growth. The transaction is likely to be neutral to Gilead’s bottom line in 2025 and significantly accretive thereafter.
Gilead has been looking to bolster its portfolio/pipeline since growth in its legacy HIV business slowed down and it suffered a few pipeline setbacks. However, investors probably deemed the deal to be expensive and the share price did not show any significant movement.
Gilead currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
VRTX, CRSP Win EC Nod for Casgevy: Vertex Pharmaceuticals (VRTX - Free Report) and partner CRISPR Therapeutics (CRSP - Free Report) announced that the EC has granted conditional marketing approval to their one-shot gene therapy, Casgevy, for treating two debilitating blood disorders — sickle cell disease (SCD) and transfusion-dependent beta thalassemia (TDT).
The gene therapy is approved for patients 12 years and above with severe SCD characterized by recurrent vaso-occlusive crises or TDT, for whom hematopoietic stem cell (HSC) transplantation is appropriate and a human leukocyte antigen matched related HSC donor is not available. The FDA approved Casgevy for the SCD indication in December 2023 and for the TDT indication in January 2024.
CRISPR also announced that it will sell approximately $280 million of its common shares to a select group of institutional investors in a registered direct offering, at a price of $71.50 per share, representing a premium of greater than 10% to the company’s 30-day volume-weighted average price.
Performance
The Nasdaq Biotechnology Index has gained 0.24% in the past five trading sessions. Among the biotech giants, Moderna has lost 13.44% during the period. Over the past six months, shares of Vertex have surged 19.61%. (See the last biotech stock roundup here: Biotech Stock Roundup: GILD, AMGN & BMY’s Q4 Results, MOR Up on NVS Deal & More)
Image Source: Zacks Investment Research
What's Next in Biotech?
Stay tuned for more earnings and pipeline updates.