10 Biotechs That Could be Bought Out Thanks to the Trump Bump
November 18, 2016
By Alex Keown, BioSpace.com Breaking News Staff
WASHINGTON – Since the election of President-elect Donald Trump, biotech and pharma stocks have surged. Add a potential change in the U.S. tax laws to make it easier for companies to bring off-shore money back into the United States and we could be in for a resurgence of M&A activity.
Michael Brush, writing for MarketWatch, points to 10 companies that are “ripe for a buyout” under a Trump administration. The estimated $112 billion kept offshore by pharma companies would energize the M&A frenzy, if the tax cuts are implemented. Citing multiple analysts, Brush pegged the 10 companies that would likely be acquisition targets. Although Brush did not go into detail as to why the companies could be snapped up, each of them has been rumored to be acquisition targets in the recent past.
1. Biogen
For months Biogen has been talked about as a potential takeover target due to its volatile stock prices and lagging revenue from its MS pipeline. Last year, the company underwent a restructuring deal and terminated about 11 percent of its employees. Roche has been suggested as a potential buyer at one point, but there are concerns over Biogen’s experimental Alzheimer’s drug, aducanumab. The drug has shown promise in early clinical trials, but many companies have been burned by failed late-stage Alzheimer’s treatments.
2. Incyte Corporation
Incyte Corporation has had its share of troubles this year after it halted its Phase III trial of its approved blood cancer drug Jakafi for the treatment of patients with advanced or metastatic pancreatic cancer. That was preceded by the company’s decision to call an early halt to a Phase II trial studying the use of Jakafi for the treatment of metastatic colorectal cancer. Some analysts have suggested the company could be a target of cash-rich Gilead Sciences due to sales of Jakafi and its increased clinical pipeline. The lowered stock price from its January failures could spur a buyout, some analysts have suggested.
3. BioMarin
There have been rumors that BioMarin could be snapped up by Sanofi , particularly after that company lost out in acquiring Medivation. Roche has also been thought of as a potential suitor for the company. BioMarin has a promising pipeline, including BMN 190 (cerliponase alfa) for a rare neurodegenerative disease, CLN2, its phenylketonuria candidate pegvaliase. The company stumbled earlier due, in large part, to the failure of its Kyndrisa program for Duchenne muscular dystrophy (DMD).
4. Neurocrine Biosciences
The company, which has a $4 billion value, has a promising pipeline. Two drugs in the pipeline, valbenazine (Tourette’s treatment) and elagolix (Endometriosis and Uterine Fibroids.), could become blockbusters with about $2 billion in potential each, according to analysts at Piper Jaffray.
5. Axovant
As other companies fail to succeed in Alzheimer’s drug therapy development, Axovant could find a way, which would generate a massive amount of revenue for the company if true. On October 6, Axovant announced that its first patients had been screened for its confirmatory Phase III trial of RVT-101 in Alzheimer’s. It also indicated the U.S. Food and Drug Administration (FDA) had granted the study a Special Protocol Assessment (SPA). The trial, called MINDSET, is an international, multi-center, double blind, placebo-controlled 24-week trial.
6. Sarepta Therapeutics
Sarepta Therapeutics got a shot in the arm in September after it became the first to win U.S. Food and Drug Administration approval of its DMD drug eteplirsen (Exondys 51). Still, the news wasn’t all grand. When the drug was approved, BioSpace reported as part of the approval, Sarepta will need to conduct a two-year, randomized controlled trial to verify the drug’s benefits. At its core, more data is needed to prove that the drug actually improves motor functions. If that trial fails, FDA approval could be withdrawn. In September, RBC upgraded the stock to a buy.
7. Tesaro
Tesaro had been on a roll since early July when the company announced its ovarian cancer treatment, Niraparib, an oral, once-daily PARP inhibitor, met its endpoints of progression-free survival (PFS) in a Phase III trial. Tesaro is expected to file for approval with the U.S. Food and Drug Administration (FDA) by the end of this year, with a final decision expected in 2017. The continued successes of niraparib has caused speculation that Tesaro could be a takeover target. Companies that have been rumored to be interested in Tesaro include Gilead , Amgen , Celgene and Pfizer .
8. Ionis
Ionis has faced a few tough months due to criticism due to the financial impact of Nusinersen, the first antisense drug from Ionis’ neurological disease franchise to advance to regulatory review. Ionis has several drugs in joint development with other companies, including Janssen. The company did face a setback after its partner GlaxoSmithKline opted to not initiate a Phase III study of its CARDIO-TTR drug program for the treatment of patients with TTR amyloidosis.
9. The Medicines Co.
The Medicines Company has had its share of troubles and earlier this year was exploring a possible sale. Although earlier this month, the company received a shot in the arm when it reported positive results from data of patients enrolled in the ORION -1 Phase II study of inclisiran. Inclisiran is an investigational GalNAc-conjugated RNAi therapeutic targeting PCSK9 being developed for the treatment of hypercholesterolemia.
10. Acadia
Acadia has been rumored to be an acquisition target due to its Parkinson’s disease drug Nuplazid, which is used to treat psychosis associated with the drug. Although Nuplazid currently comes with a black box warning from the U.S. Food and Drug Administration regarding increased mortality in elderly patients, the drug has the potential to generate $1 billion in revenue, according to analysts. Because of applications Nuplazid could have with Alzheimer’s disease, companies like Biogen could be interested.