October 26, 2016
By Mark Terry, BioSpace.com Breaking News Staff
Merger-and-acquisition activity in 2014 and 2015 was hyperactive, but it’s been slower this year. From January to August of this year, biotech M&A was about $77.448 billion compared to $94.27 billion from the same period last year. There were actually more deals, according to the monthly Biotech Report of the Zephyr database, from 655 in that period in 2015 to 869 this year.
So although mega-deals seem mostly sidelined, many companies are interested in bolt-on deals. Let’s take a look at 10 companies that have been the biggest sources of speculation for acquisition targets.
Acadia Pharmaceuticals , based in San Diego, has been rumored to be a hot acquisition target for some time. The company’s Nuplazid (pimavanserin) was approved by the U.S. Food and Drug Administration (FDA) in May to treat Parkinson’s disease psychosis. Probably a better time to buy would have been before the approval, since the company’s stock has jumped 80 percent since then. But it would still be a hot company, with Nuplazid projected to bring in more than $3 billion in annual peak sales. And if Nuplazid is approved for Alzheimer’s disease psychosis or schizophrenia, it would jump again.
New Haven, Conn.-based Alexion Pharmaceuticals just received Orphan Drug Designation for ALXN 1007 by the FDA for the treatments of patients with Graft-Versus-Host Disease (GVHD) last week. Both Bloomberg and Reuters recently suggested that Roche was considering buying Alexion, and plenty of other analysts think somebody will buy the company. Part of the appeal is its Soliris (eculizumab), the only approved drug for paroxysmal nocturnal hemoglobinuria (PNH), and atypical hemolytic uremic syndrome (aHUS). Soliris is expected to have sales of about $1.5 billion this year, but could range from $3 to $6 billion at peak sales.
3. Ardelyx
Ardelyx , based in Fremont, Calif., focuses on minimally-systemic, small molecule and polymeric drugs that work in the gastrointestinal (GI) tract to treat GI and cardio-renal diseases. Next year is expected to be a big year with three late-stage programs expecting data, including a Phase III trial of tenapanor to treat hyperphosphatemia in ESRD patients on dialysis, RDX227675 in patients with hyperkalemia, and tenapanor for IBSC-C.
4. Biogen
Cambridge, Mass.-based Biogen has been the source of constant M&A rumors—both buyer and target—this year. A lot of this revolves around the softening sales of its multiple sclerosis (MS) franchise. Reportedly both Merck & Co. and Allergan have talked to Biogen over a deal. Sarah Collins, of Market Realist, wrote on September 9 that, with the company’s chief executive officer George Scangos retiring, a strong, but high-risk pipeline, and strong quarterly results, “the company is considered an attractive takeover opportunity.”
BioMarin Pharmaceutical has been identified as a likely acquisition target. It has a strong presence in the rare disease market. There were rumors that Sanofi might pursue the company after it lost out to Pfizer in acquiring Medivation . BioMarin had a tough blow when the FDA rejected its application for Kyndrisa (drisapersen) for Duchenne Muscular Dystrophy (DMD) back in January.
Gilead Sciences , based in Foster City, Calif., is another big company that everyone wants someone to buy. The irony is that over the last 15 years Gilead has gained more than 4,930 percent. But it’s facing headwinds in its domination position in the hepatitis C (HCV) market, although it’s also a huge player in the HIV market. It would probably be a tough one though, because many analysts think it would cost about $150 billion, pushing it firmly into the mega-merger territory.
Incyte is also another company that often makes the list. It has two products on the market, Jakafi and Iclusig. Jakafi is a JAK1 and JAK2 inhibitor to treat polycythemia vera. Simon Simeonidis, managing director and senior biotech analyst at RBC Capital Markets wrote in Barron’s on July 14, “The combination of growing revenue and strong R&D makes Incyte a great acquisition target.”
New York-based Intercept Pharmaceuticals has been cited as a potential acquisition target for Gilead. The company’s Ocaliva (obeticholic acid) was approved by the FDA to treat primary biliary cirrhosis. Of course, it was also rumored to be a target for AstraZeneca , Shire and GlaxoSmithKline . Another reason the company’s had a target on its back is because many companies are working to break into the nonalcoholic steatohepatitis (NASH) market. Increasingly it’s starting to look like combination therapy is the way to go, and Ocaliva shows promise in treating the fibrotic aspects of NASH.
9. Kite Pharma
Kite Pharma , based in Santa Monica, Calif., has also been mentioned as a potential target for acquisition by Gilead. The company is leading the charge in CAR-T immuno-oncology drug development. It was neck-and-neck with Juno Therapeutics until Juno’s JCAR015 was placed on a clinical hold earlier this year after three patient deaths. This cast a shadow on CAR-T in general, but Kite appears to have emerged as the likely leader.
10. Tesaro
Tesaro was recently mentioned as an acquisition target for Gilead. The overall focus here is a new class of cancer drug, PARP inhibitors (PARPi). The only company with a PARPi on the market is AstraZeneca, with Lynparza for BRCA-positive advanced ovarian cancer. There’s competition for it, with Tesaro’s niraparib, AbbVie ’s veliparib, Clovis Oncology ’s rucaparib, and Medivation (now Pfizer ’s talazoparib. But on June 29, Tesaro’s Phase III trial of niraparib met its endpoints of progress-free survival (PFS) in ovarian cancer patients. It’s expected to file with the FDA by the end of this year with a final decision in 2017.
