January 23, 2017
By Mark Terry, BioSpace.com Breaking News Staff
The year so far has Takeda Pharmaceutical buying Ariad Pharmaceuticals for $5.2 billion, and Eli Lilly acquiring CoLucid Pharmaceuticals for about $960 million. Keith Speights, writing for The Motley Fool, takes a look at three biotech companies he thinks could be next.
Located in Boulder, Colorado, Clovis Oncology received accelerated approval for its Rubraca as a third-line treatment for advanced ovarian cancer from the U.S. Food and Drug Administration in December. As promising as it is, the company is also evaluating the drug as maintenance treatment for ovarian cancer. It also has an early-stage trial of Rubraca in combination with Roche ’s Tecentriq for gynecologic cancers.
Although Clovis doesn’t have any other drugs in its pipeline, Speights notes that, “Clovis owns global rights for Rubraca. Many biotechs with promising cancer drugs license commercialization rights for some geographies to larger companies. Because Clovis has not done so, it should be more appealing to potential acquirers.”
Clovis is currently trading for $59.74.
Based in New York City, Intercept Pharmaceuticals is regularly brought up as a possible acquisition target, often with the buyer being Foster City, Calif.-based Gilead Sciences . Intercept is ahead in the race to come up with a treatment for non-alcoholic steatohepatitis (NASH). Its obeticholic acid (OCA) is in a late-stage trial for NASH, and showed promise in a mid-stage trial. To date, it’s the only NASH drug to receive breakthrough therapy designation from the FDA. The drug has been approved for treatment of primary biliary cholangitis (PBC), a different inflammatory liver disease.
Speights writes, “While several large drugmakers are already developing potential NASH treatments or have acquired smaller biotechs with NASH candidates, the potential market is lucrative enough that it could draw others into the fray. Intercept’s headstart with OCA could make it a tempting target.”
Intercept is currently trading for $108.45.
Headquartered in Dublin, Jazz Pharmaceuticals focuses primarily on sleep disorders and products related to hematology and oncology. It has Erwinase on the market to treat acute lymphoblastic leukemia (ALL). But it is its Xyrem to treat excessive daytime sleepiness (EDS) and cataplexy, symptoms of narcolepsy, that is expected to drive the company’s revenue. Speights expects that when Jazz publishes 2016 full-year results, Xyrem will have shot past $1 billion in sales.
The FDA approved a generic for Xyrem, but Jazz has filed a patent infringement lawsuit. It also has an experimental drug, Vyxeos, for acute myeloid leukemia (AML), and expects to submit for U.S. approval this year. If approved, analysts project $400 million in peak annual sales.
Speights writes, “Assuming Jazz is successful in fending off generic rivals to Xyrem, the company looks to be one of the best bargains around. The stock currently trades at less than 11 times forward earnings. Wall Street projects annual earnings growth of more than 17 percent over the next few years.”
Jazz is currently trading for $123.84.
