This year wasn’t big for mergers and acquisitions in biopharma, particularly compared to 2015 and 2016.
This year wasn’t big for mergers and acquisitions in biopharma, particularly compared to 2015 and 2016. Many industry watchers and investors are paying close attention to Congress’ tax plan, which would potentially cut the corporate tax rate from about 35 percent to 20 percent, and would allow companies to repatriate funds from overseas accounts at a one-time tax rate of 10 percent. If they were to go through, many of the larger biopharma companies would find themselves sitting on a large pile of cash.
Although Congress conservatives claim the companies will then create more jobs, a far more likely outcome is they will buy other companies, at least in the biopharma industry—which typically results in layoffs over personnel redundancies. But the acquisitions usually result in stronger pipelines and boosted stock prices. Zacks looks at four possible acquisition targets for 2018 in the biopharma space.
Headquartered in Novato, California, BioMarin focuses on developing drugs for rare diseases. On Dec. 11, the company updated its work on valoctocogene roxaparvovec, a gene therapy treatment for severe hemophilia at the American Society for Hemophilia Annual Meeting. Three patients who had been given the therapeutics 48 weeks before had Factor VIII levels that were in or near the normal range. And median annualized bleed and factor VIII use rates for the cohort were zero after Week 4.
BioMarin’s market cap is around $14 billion, and the rare disease space is a hot one, with less competition and high drug price tags. The company’s Vimizim and Kuvan are doing well in the market and the company also had an earlier-than-expected thumbs-up this year for Brineura for children with CLN2 disease, a form of Batten disease.
Zacks writes, “BioMarin has already been the target of takeover speculation. Companies like Gilead, Amgen and Roche may be interested in buying BioMarin.”
Based in Boston, Vertex markets two drugs for cystic fibrosis (CF), Kalydeco and Orkambi. On Dec. 12, Vertex announced that it and CRISPR Therapeutics had signed a deal to co-develop and co-commercialize CTX001, an investigational gene editing treatment using CRISPR/Cas9 for sickle cell disease and beta-thalassemia. This is an expansion of a previous deal.
Zacks writes, “The company is optimistic that the positive trend of CF sales will continue in 2018 as it gains additional reimbursement approvals for Orkambi in ex-U.S. markets and gets approval to launch tezacaftor (VX-661)/ivacaftor combination medicine. Meanwhile, the company has also made decent clinical progress across multiple CF studies this year and has meaningful pipeline catalysts. The market cap of Vertex is around $36 million.”
Located in Wilmington, Delaware, Incyte focuses on oncology. On Nov. 15, the company announced that the first patient had been treated in its RESET pivotal trial of Jakafi (ruxolitinib) compared to anagrelide in patients with essential thrombocythemia who are resistant to or intolerant of hydroxyurea (HU). Jakafi is a JAK1/JAK2 inhibitor that has been approved in patients with polycythemia vera and myelofibrosis.
The other product it has on the market is Iclusig. The company’s market cap is more than $20 billion. Both drugs are doing well for rare cancers, and the pipeline would be an incentive for most companies as well. Zacks writes, “Incyte’s pipeline boasts candidates like immune therapy epacadostat—being studied in combination with anti-PD-L1 agents of Merck, Bristol-Myers and others—and Olumiant for rheumatoid arthritis—approved in Europe and regulatory application to be filed in the United States in January 2018.”
Headquartered in New Haven, Connecticut, Alexion focuses on rare diseases. Its products include Soliris (eculizumab) for patients with paroxysmal nocturnal hemoglobinuria (PNH), atypical hemolytic uremic syndrome (aHUS), and anti-acetylcholine receptor antibody-positive generalized myasthenia gravis. It also has Strensiq (asfotase alfa) for hypophosphatasia (HPP) and Kanuma (sebelipase alfa) for lysosomal acid lipase deficiency.
Zacks writes, “Alexion also has a robust pipeline of sever candidates under development including Soliris follow-up candidate, ALXN1210. Roche, Pfizer or Novartis may be interested in buying Alexion. The market cap of Alexion is more than $25 billion.”
