March 13, 2017
By Mark Terry, BioSpace.com Breaking News Staff
More rumors that Gilead is close to acquiring Incyte caused Incyte’s stock to jump on Friday. Incyte are currently trading for $148.11, up from Friday’s $135.49.
Rumors that Gilead should or might acquire Incyte are not new. Incyte, based in Wilmington, Del., is often brought up as a hot acquisition target. In a 2016 survey conducted by Evercore ISI, 244 biotech industry observers listed it as their top target. The top three buyers usually cited are Gilead, Eli Lilly & Co. and Novartis .
Incyte has two products on the market, Jakafi and Iclusig. Jakafi is a JAK1 and JAK2 inhibitor to treat polycythemia vera. In May 2016, it acquired the European rights to leukemia drug Iclusig from Ariad Pharmaceuticals .
Although Gilead’s overall focus and success has been in hepatitis C and HIV, it has been deliberately trying to move beyond those indications. It only has a single commercial cancer drug, Zydelig, for relapsed chronic lymphocytic leukemia (CLL), non-Hodgkin lymphoma (NHL), and relapsed small lymphocytic lymphoma (SLL). It has eight drugs in clinical trials for hematology and oncology indications, three of which are Phase III trials. If any of those make it to market, Jakafi and Iclusig would fight right into a growing oncology portfolio.
However, the market seems somewhat skeptical of this rumor. Gilead , which has been trending downward for the last year, dropped through part of the day Friday before popping slightly to its currently $67.94. Alicia McElhaney, writing for TheStreet, seems to interpret that as an indication investors don’t believe it will happen. She notes that, “Gilead … has been poised to buy a biotech for months—its pipeline is waning, and it’s flush with cash. Investor sentiment, while excited that a deal could finally be inked, didn’t lend much legitimacy to the report.”
TheStreet’s sister publication, The Deal, was pushing for Gilead to acquire Tesaro . Tesaro has been rumored to be a takeover target since at least July 2016. The company reportedly isn’t actively looking for a sale, but because of the apparent interest, has spoken to investment banks, including Citigroup, on how best to respond to offers.
Tesaro’s potential new cancer drug, niraparib, was granted Priority Review on December 20, 2016 by the U.S. Food and Drug Administration (FDA). Niraparib is a PARP inhibitor, a new form of drug treatment. It is being evaluated in patients with recurrent epithelial ovarian, fallopian tube, or primary peritoneal cancer after response to platinum-based chemotherapy. The PDUFA date is June 30, 2017.
There are also rumors that Paris-based Sanofi (SNY) is in talks with Tesaro.
The interest, however, in Incyte, isn’t just because of Jakafi. It has a potential blockbuster, epacadostat, which is involved in several ongoing clinical trials, including as combination therapies with Merck’s Keytruda for melanoma, AstraZeneca ’s duralumab for several advanced solid tumors, and Sanofi ’s Opdivo.
Bhuvnesh Rai, writing for Simply Wall Street, notes, “While immunotherapy treatments such as Keytruda and Opdivo are popular, they still have substantial room for improvement in terms of patient survival rates, where Incyte’s Epacadostat might help. The success of these trials can generate more than a billion dollars in annual sales for Incyte. Another notable investigational drug in the pipeline is baricitinib, to treat moderate to severe rheumatoid arthritis, that Incyte is developing with Eli Lilly and seeking marketing approval in the U.S., EU, and Japan. While news from Europe has been positive, the U.S. FDA has extended the review period for the drug.”
