April 14, 2016
By Alex Keown, BioSpace.com Breaking News Staff
CHICAGO – It’s been a tough 2016 for biotech stocks and that means some companies that have depressed stock prices could become a good target for acquisition, an analyst at The Motley Fool is speculating this morning.
The Fool’s Todd Campbell highlights three companies that could be in the sights of some M&A-minded executives—Kite Pharma, Medivation Inc. and Portola Pharmaceuticals. Campbell noted there are several reasons these companies could be attractive candidates, including clinical milestones, possible expansions and looming regulatory decisions.
Shares of Santa Monica-based Kite Pharma have been up and down over the first three months of 2016, in part due to safety concerns over its CAR-T therapies. But, the company has four clinical trials underway and the results could send the stock soaring. If results are promising, particularly for lead study of KTE-C19 for the treatment of refractory, aggressive non-Hodgkin lymphoma, Kite could have a strong next few years. Analysts are predicting sales of $1.7 billion for KTE-C19 if the drug is approved. KTE-C19 is designed to genetically modify a patient’s T cells to express a Chimeric Antigen Receptor (CAR) designed to target the antigen CD19, a protein expressed on the cell surface of B-cell lymphomas and leukemias. KTE-C19 has had some negative press after the death of a patient, but Kite said it was determined the experimental medication had no role in the death of the patient with a low prognosis. Kite could also benefit from several immuno-oncology deals it struck, including one with and one with Seattle-based Alpine Immune Sciences, Inc. One company that could eye Kite is Amgen, which is already collaborating with Kite on an oncology therapy, Campbell said.
San Francisco-based Medivation may have already been in play as far as being an M&A target. The company reportedly rejected a bid by Paris-based Sanofi . As a result of the rumors, company stock popped in after-hours trading about 11 percent, with a current price of $45.73. Sanofi apparently is not the only company considering Medivation, and the Bay Area drug company reportedly wants a higher price than initial bids. The company is the maker of prostate drug, Xtandi, which is generating about $2 billion in revenue. Medivation also has other cancer drugs in its developmental pipeline, pidilizumab, for the treatment of B-cell lymphoma and other blood cancers, as well as talazoparib for breast cancer.
Since January, shares of Portola stock have been on a steady decline following mixed results for its factor Xa anticoagulant drug, betrixaban. Recent clinical trial data comparing betrixaban to Sanofi’s Lovenox yielded mixed results, which has not helped shares of Portola. The U.S. Food and Drug Administration (FDA) is expected to rule later this year, but there’s no telling how the recent trial data will impact their decision. Campbell speculated Bristol-Myers Squibb could be a possible suitor, which markets its own factor Xa anticoagulant, Eliquis. Campbell speculated BMS might also be interested in Portola’s other late stage anticoagulant andexanet alfa. Portola filed a New Drug Application with the U.S. FDA for andexanet alfa, which would be the first approved drug for factor Xa anticoagulants.
