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Roche (RHHBY) to Acquire Jecure and Enter the NASH Space

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Swiss pharma giant Roche Holdings (RHHBY - Free Report) entered into a definitive agreement to acquire biotechnology company Jecure Therapeutics, Inc.

Roche’s subsidiary, Genentech will obtain full rights to Jecure’s entire preclinical portfolio of NLRP3 inhibitors. The latter began operating in 2015 following a seed financing from founding investor Versant Ventures.  It has raised $20 million in a Series A round from Versant in 2017 to continue to develop and advance its portfolio of NLRP3 inhibitors.

Jecure Therapeutics is focused on the discovery of novel therapeutics for the treatment of non-alcoholic steatohepatitis (NASH) and liver fibrosis. Jecure’s lead program has identified small molecule inhibitors of the NLRP3 inflammasome, a novel target and pro-inflammatory driver of NASH.

The financial terms of the acquisition were not disclosed.

The acquisition will enable Roche to foray into the promising NASH space, which has been the focus of late.

Most recently, another Swiss pharma, Novartis AG (NVS - Free Report) entered into a clinical development agreement with Pfizer (PFE - Free Report) . The agreement includes a clinical trial to evaluate the combination of tropifexor (LJN452) and one or more Pfizer compounds for the treatment of NASH. The compounds include an Acetyl CoA-Carboxylase (ACC) Inhibitor (PF-05221304), a Diacylglycerol O-Acyltransferase 2 (DGAT2) Inhibitor (PF-06865571), and a Ketohexokinase (KHK) Inhibitor (PF-06835919).

Shares of Roche have gained 4.4% so far this year compared with the industry’s growth of 12.8%.

 

Meanwhile, Roche has been quite active on the acquisition front. Being a leading health care company, Roche focuses on developing and commercializing innovative diagnostic and therapeutic products and services, which help in early detection and prevention of diseases as well as their treatment and monitoring.

During the first quarter of 2018, Roche acquired Flatiron Health and Ignyta, Inc. While Flatiron Health will help accelerate development and delivery of breakthrough medicines for oncology patients, Ignyta’s lead molecule, entrectinib targets tumors with one of the two genetically defined gene rearrangements — ROS1 fusions in NSCLC and NTRK fusions across a broad range of solid tumors. The candidate is currently being evaluated in an ongoing phase II trial, which, if successful, will support NDA submission.  The deal will further strengthen the company's strong pipeline. In July 2018, Roche acquired Foundation Medicine Inc. to broaden its healthcare portfolio, and aims to further advance molecular insights and the broad availability of high-quality comprehensive genomic profiling, both key enablers for the development of new cancer treatments and optimal patient care.

Zacks Rank & Key Pick

Roche carries a Zacks Rank #3 (Hold).

A better-ranked stock in the healthcare sector is Gilead Sciences, Inc. (GILD - Free Report) , which sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Gilead’s earnings per share estimates increased from $6.60 to $6.93 for 2018 over the past 60 days. Estimates for 2019 are also up by 30 cents.

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