March 31, 2017
By Mark Terry, BioSpace.com Breaking News Staff
The first quarter of 2017 was not huge for merger-and-acquisition activity in the biopharma industry. But hope springs eternal for investors and analysts. Bret Jensen, writing for Seeking Alpha, looks at three biotech that he thinks could be acquired in the second quarter.
There have been rumors recently that Paris-based Sanofi is wrapping up talks to acquire Burlington, Mass.-based Flexion Therapeutics. Flexion is a specialty pharma company focused on musculoskeletal conditions such as osteoarthritis. The company’s lead product is Zilretta (FX006), which on February 23 enrolled the first patient in a clinical trial to evaluate the safety of repeat administration for OA of the knee.
Sanofi lost out to Pfizer when it acquired Medivation, and to Johnson & Johnson in a bid for Actelion. Jensen writes, “Sanofi’s major shareholders are getting impatient for the company to record a ‘win’ on the M&A front to put it mildly. In addition, several of Flexion’s top executives came from Sanofi. Flexion’s compound Zilretta to treat osteoarthritis of the knee is expected to be approved early this summer. This would be a perfect fit for Sanofi given its leadership in the United States for the single injection market for nyaluronic acid-based products that are also used to treat osteoarthritis pain.”
Flexion is currently trading for $27.
There were rumors in January—probably started on Twitter—that Pfizer was in talks to buy Acadia Pharmaceuticals. Of course, in June it was rumored that AstraZeneca was considering buying it. And in April of 2016, Biogen (BIIB) was floated as a potential buyer. Other companies cited as potential suitors include Gilead Sciences, Teva Pharmaceutical Industries, Otsuka Pharmaceutical Co. Ltd., Bristol-Myers Squibb and AbbVie.
The company’s sole product is Nuplazid (pimavanserin), which was recently approved by the U.S. Food and Drug Administration (FDA) for Parkinson’s psychosis. Sales have beat expectations and, as Jensen notes, anecdotally, “the drug is also seeing ‘off label’ use in treating the same symptoms in other types of dementia such as Alzheimer’s. The drug is in late stage trials for the treatment of psychosis in both Alzheimer’s and schizophrenia.”
Parkinson’s alone is likely a $1 billion market, and if approved in Alzheimer’s and schizophrenia, could triple that.
Acadia is currently trading for $34.72.
Earlier this month, Vertex Pharmaceuticals opted to buy cystic fibrosis (CF) drug candidate CTP-656 from Concert Pharmaceuticals. It paid $160 million in cash for global development and commercial rights. The drug is basically the same as Vertex’s Kalydeco, but uses deuterium atoms instead of hydrogen atoms, which makes it longer lasting.
A Vertex acquisition would be a big one, likely around $30 billion.
Jensen notes, “The company ‘derisked’ its pipeline considerably on Wednesday by announcing successful Phase III trial results in two studies assessing its combination of tezacaftor and ivacaftor in patients with cystic fibrosis. The company plans to file marketing applications in both the United States and Europe in early 2018. This combination is intended to treat patients who have one or two copies of a genetic mutation that is the most common cause of cystic fibrosis, a progressive lung disease that affects about 30,000 people in the U.S.”
Vertex is currently trading for $108.34.
