Pharma is definitely interested in making more deals. But what biotechs will come under the magnifying glass? BioSpace takes a look at companies that analysts see as near-term targets for buyouts.
Where one deal occurs, others follow. That’s the theme emerging as analysts parse potential M&A targets with the biopharma deal environment heating up.
With a strong return to M&A in the first half, most experts agree we’re going to see plenty more deals to come.
Despite the flood of recent deals, Big Pharmas are still facing tough patent expiries and appear to have a lot of cash to spend, H.C. Wainright wrote in a June 29 note. Buyers are especially seeking companies with assets in MASH, rare disease, immunology, oncology and central nervous system (CNS) disorders, following on other deals in these disease areas.
Wainright flagged Beam Therapeutics, Immunocore and psychedelics drug developer AtaiBekley as potential targets at the time. The latter, of course, went on to be acquired by Eli Lilly for $3.8 billion a few weeks later.
Below, BioSpace takes a look at biotechs that analysts see as potential targets for M&A, from sleep disorder biotech Alkermes to CAR T icon Legend Biotech.
Alkermes
Thanks to Eli Lilly’s $6.3 billion acquisition of Centessa Pharmaceuticals in March, Alkermes is looking like a strong next bet in the sleep market, according to a July 19 note from Stifel.
Centessa’s lead asset was cleminorexton, an oral orexin receptor 2 (OX2R) agonist being trialed for narcolepsy types 1 and 2 as well as idiopathic hypersomnia (IH). Orexin is a key neuropeptide that regulates the sleep-wake cycle; drugs that activate the pathway could help address excessive daytime sleepiness as well as improve attention, cognition and fatigue.
The orexin class has pipeline-in-a-product potential that is drawing significant M&A interest, Leerink said in a July 19 note covering other activity in the space.
Alkermes is one of the companies on the forefront of the orexin class. The company is expecting a Phase 2 readout for its lead asset, alixorexton, in IH in the fourth quarter. Experts told Stifel that IH could be the next big thing in the insomnia market behind narcolepsy.
A win in these studies could also suggest a future for the drug class in non-sleep indications like attention deficit hyperactivity disorder (ADHD), the firm wrote.
“There’s reasons for optimism that this could show real proof-of-concept and increase excitement for the orexin class beyond sleep,” Stifel said.
In this vein, Alkermes is also developing the orexin ALKS 7290, with Phase 1b data from 50 patients with ADHD expected in the fourth quarter. A Phase 2 will likely follow in 2027 with 300 adults.
After all was said and done, the Centessa deal amounted to a value of just under $8 billion. Alkermes’ current market cap slightly tops that, at $9 billion, according to Stifel. The company has four approved medicines in the neuro space already, Lybalvi, Aristada, Vivitrol and Lumryz.
“Alkermes offers an opportunity to participate in the new/exciting OX2R class, but with a meaningful floor value that offers downside protection,” Stifel wrote.
Dyne Therapeutics
If you ask analysts, Alnylam Pharmaceuticals needs to make an acquisition. The RNAi specialist cut $200 million off its full-year guidance when reporting second quarter earnings last week, losing $10.8 billion in market cap in the process as investors reeled.
Oppenheimer believes that neuromuscular disease biotech Dyne Therapeutics could be a natural fit, according to a July 16 note. The company is awaiting a January 2027 decision from the FDA on the approval of exon skipper zeleciment rostudirsen (z-rostudirsen) for Duchenne muscular dystrophy, with a confirmatory Phase 3 trial underway. If approved, the therapy could tap into a $700 million market opportunity, according to Jefferies.
The biotech’s profile has risen as competitors like Avidity Biosciences have produced positive data, according to Oppenheimer. Avidity was bought by Novartis last year for $14.6 billion, showing that Big Pharma is willing to spend big cash for neuromuscular disease assets.
Dyne recently received the FDA’s go ahead to advance the siRNA therapy DYNE-302 into human trials for facioscapulohumeral muscular dystrophy (FSHD). Avidity’s RNA therapy delpacibart braxlosiran (del-bax) provided early validation for Novartis’ gambit with positive biomarker data in FSHD that was released in June 2026. Both therapies target the DUX4 gene.
FSHD could be even bigger than DMD. Jefferies predicts the market to be worth about $3 billion, according to a July 30 note. With competitors set to read out trials in the indication in the second half, Jefferies sees this as a key period to “help frame DYN’s differentiation.”
“DYN is becoming an attractive platform play,” the firm wrote.
First Tracks Biotherapeutics
Another company to benefit from deals elsewhere is First Tracks Biotherapeutics, a clinical-stage immunology biotech that is firmly entrenched in a pharma hot spot.
Argenyx helped buoy First Tracks with the $2.2 billion takeout of rival Forte Biosciences earlier this month. Argenyx specifically highlighted the early performance of Forte’s CD122 therapy FB102 in vitiligo and celiac disease.
But First Tracks has something better, according to Leerink Partners. The biotech’s CD122 candidate ANB033 binds to a different isotope than FB102 does and has shown better potency in animal testing. First Tracks’ asset also offers subcutaneous administration, whereas FB102 is delivered via IV infusion.
Forte is also singularly focused on FB102, whereas First Tracks has a small pipeline beyond CD122. It includes ANB101 for inflammatory diseases and rosnilimab, which has shown positive Phase 2 results in rheumatoid arthritis, according to Leerink.
“We view IL-15/CD122 antagonism is emerging as a new immunology & inflammation (I&I) class which has the potential to address several diseases with significant unmet need, implying ‘pipeline in a product’ potential,” the firm wrote in a July 27 note.
Legend Biotech
With Big Pharmas snapping up biotechs in the CAR T space—see Sail Biomedicines below or Gilead Sciences’ $7.8 billion buy of Arcellx—analysts see Legend Biotech as having one of the strongest pipelines in the space.
Last month, Legend revealed a readout for the in vivo CAR T therapy LB2501 in non-Hodgkin lymphoma that Oppenheimer analysts called “best case scenario.” The therapy showed a clean safety profile and efficacy that “stacked up well” to other modalities currently at use in the disease, the analysts wrote in a June 2 note.
Oppenheimer noted that Kelonia Therapeutics was acquired by Eli Lilly for $7 billion just four months after presenting similarly exciting data last year.
“Positive in vivo CART data strengthens chances of LEGN acquisition in our view,” Oppenheimer wrote. “LEGN is perhaps (one of) the most advanced-stage in vivo CART companies that is currently available for acquisition/partnership.”
Legend is already well known for Carvykti, which it markets with Johnson & Johnson for two types of multiple myeloma. The therapy booked $597 million in sales for the first quarter of the year, a 62% increase over the same period a year before, according to Legend’s first quarter earnings report.
Others acquired in the space include earlier-stage biotechs Capstan Therapeutics (AbbVie) for $2.1 billion and Orbital Therapeutics (Bristol Myers Squibb) for $1.5 billion.
Legend is going through some growing pains at the moment. CEO Ying Huang stepped down last week to be replaced on an interim basis by Alan Bash, who currently leads the company’s Carvykti business unit. Oppenheimer said that Huang has deep experience in the space but investors have nevertheless been dissatisfied.
“We believe the new CEO, and their interactions/board alignment, will be critical to turning the story around ahead of Anito-cel market entry in December and potential M&A discussions,” the firm said on July 27.
Sail Biomedicines
We know that Johnson & Johnson wants to buy Sail Biomedicines. The healthcare giant secured the right to acquire the Flagship Pioneering biotech for $2.58 billion down the line as part of a larger immunology research partnership that was revealed last week. The research portion of the deal involved $785 million in initial payments, including a $465 million equity investment.
But the big question is when. Leerink Partners pointed out on July 29 that the deal could happen soon, since J&J’s press release noted that the agreement could dilute its shares this year or early next.
In the meantime, the new partners will work on Sail’s lead program SAIL-0839, an in vivo CAR T cell therapy that targets CD4+ and CD8+.
Sail emerged in October 2023 when Flagship folded two of its entities—Laronde and Senda Biosciences— into one company to work on programmable medicines.
