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Pharma Stock Roundup: BMY to Buy CELG for $74B, MRK Gets Rights to NASH Candidate

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The pharma sector was relatively lying low this week with some news grabbing attention only towards the end. Top stories this week were Bristol-Myers’ (BMY - Free Report) offer to buy cancer giant Celgene Corporation in a cash and stock deal worth $74 billion and Merck’s (MRK - Free Report) decision to exercise the option to in-license a NASH candidate from partner NGM Biopharmaceuticals.

Recap of the Week’s Most Important Headlines

Bristol-Myers to Acquire Celgene for $74B: Bristol-Myers began the year announcing one of the largest merger deals in the biotech/pharma sector. The company is acquiring cancer drug specialist Celgene in a cash-stock deal valued at $74 billion. Per the transaction, each Celgene shareholder will receive a consideration of $102.43, comprising one share of Bristol-Myers (valued at $52.43 on Jan 2, 2019) and $50 per share in cash. The deal makes strategic sense as the combination will create a premier innovative biopharma giant with leading franchises in oncology, immunology and inflammation and cardiovascular disease. The combined entity with have nine products generating more than $1 billion in sales and is expected to launch six products in the near term. Moreover, the consolidated company will have a deep and diverse early and late-stage pipeline. Following the transaction, Bristol-Myers is expected to realize cost synergies of approximately $2.5 billion by 2022. The company also separately issued adjusted earnings guidance for 2019 in the range of $4.10-$4.20. While shares of Bristol-Myers decline, that of Celgene were up on announcement of the news.

Meanwhile, Bristol-Myers tyrosine kinase inhibitor, Sprycel, gained an FDA nod for its use in pediatric patients in combination with chemotherapy for newly diagnosed Philadelphia chromosome-positive acute lymphoblastic leukemia. Sprycel is also approved for Ph+ chronic myeloid leukemia in chronic phase in pediatric patients.

Merck In-Licenses NASH Candidate, Keytruda Gets 5 Approvals in Japan: Merck exercised its option to in-license a NASH and type II diabetes candidate, NGM313, now renamed as MK-3655 from NGM Biopharmaceuticals, Inc. for $20 million. With this deal, Merck gets exclusive global rights to develop, manufacture and commercialize NGM313, a once-monthly insulin sensitizer. Merck’s one-time option was triggered as NGM completed a phase Ib proof-of-concept study on the candidate. Data from the study presented last November showed that a single dose of the medicine led to a statistically significant reduction in liver fat content (LFC) and improvements in multiple metabolic parameters after five weeks of treatment. Merck plans to initiate a phase IIb study on the candidate while NGM Biopharmaceuticals retains the option to take a 50% cost and profit-sharing partnership for NGM313 once the candidate enters late-stage development.

Meanwhile, the company’s PD-1 inhibitor Keytruda clinched five new label expansion approvals in Japan. These included three approvals as a first-line treatment option for advanced non-small cell lung cancer (NSCLC) and the other two as an adjuvant therapy for melanoma and in advanced microsatellite instability-high (MSI-H) tumors.

Pfizer Starts Pivotal Study on Alopecia Areata Candidate: Pfizer (PFE - Free Report) initiated a global pivotal phase IIb/III study on its oral JAK3 inhibitor candidate, PF-06651600, for the treatment of moderate to severe alopecia areata.  Alopecia areata is a chronic autoimmune skin disease causing hair loss — often patchy — on the scalp, face or body. Top-line data from a phase IIa study on PF-06651600 was presented in September 2018. The study met the primary endpoint of improving hair re-growth on the scalp as compared to baseline over 24 weeks’ regimen.

AbbVie Inks New Immunotherapy Deal: AbbVie (ABBV - Free Report) signed a strategic collaboration with private cancer biotech, Tizona Therapeutics, to develop and commercialize immunotherapies targeting the CD39-enzyme including pre-clinical candidate TTX-030. AbbVie plans to begin clinical studies on TTX-030 in the first quarter of 2019. The company made an upfront payment of $105 million to Tizona for the license to its CD39 program while also buying an equity stake in the company.

The NYSE ARCA Pharmaceutical Index declined 1.4% in the last four trading sessions.


Large Cap Pharmaceuticals Industry 5YR % Return



Large Cap Pharmaceuticals Industry 5YR % Return


Here is how the seven major stocks performed in the last four trading sessions:



All the stocks except AstraZeneca (AZN - Free Report) were in the red in the last four trading sessions with Bristol-Myers declining the most (10.5%). AstraZeneca rose 2.8% in the same period.

In the past six months, Lilly (LLY - Free Report) has been the biggest gainer (28.5%) while Bristol-Myers declined the most (19.2%).

(See the last pharma stock roundup here: GSK, PFE Ink Consumer Health JV, JNJ Hit by Talc Allegations)

What's Next in the Pharma World?

Watch out for pipeline and regulatory updates next week.

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