September 9, 2016
By Mark Terry, BioSpace.com Breaking News Staff
Now that the Pfizer acquisition of Medivation is on the road to finalization, investors are gazing around to see what other juicy oncology targets are out there. After all, Sanofi , Gilead Sciences , Merck , Celgene , Amgen and AstraZeneca were all interested in buying Medivation.
Ken Kam, writing for Forbes, sat down with Todd Hagopian, who runs a biotech fund at Marketocracy, to discuss three possible oncology companies that might be acquisition targets.
At the top of Hagopian’s list is Puma Biotechnology . Headquartered in Los Angeles, Puma focuses on in-licensing drug candidates that are either currently in clinical trials or have already completed clinical studies for the treatment of cancer. Most recently, on August 22, Puma announced that the European Medicines Agency (EMA) had validated its Marketing Authorization Application (MAA) for neratinib as an extended adjuvant of HER2-positive early-stage breast cancer that has been previously treated with trastuzumab (Herceptin)-based adjuvant therapy.
Hagopian notes that neratinib has also been submitted to the U.S. Food and Drug Administration (FDA). “This could lead to approval in both regions in 2017. This makes the next six to nine months an ideal time for a company to come in and make a strategic acquisition.”
He believes an acquisition price might be in the $80 per share range. Puma is currently trading for $59.02.
Next up is Jazz Pharmaceuticals , based in Dublin. At its second-quarter financial report, the company indicated $381.1 million in total revenue for the quarter, up from $333.7 million in the same quarter in 2015. When it acquired Celator Pharmaceuticals , it picked up Vyxeos, a late-stage drug to treat acute myeloid leukemia.
Hagopian notes that Jazz has an extensive portfolio of drugs for narcolepsy that are likely to hit the market soon, two current cancer therapeutics, and two more that are likely to be approved next year or in 2018. He projects a possible acquisition of $195 per share. are currently trading for $121.63.
And last up is Kite Pharma , which is a leader in developing CAR-T immune-oncology therapies. Headquartered in Santa Monica, California, Kite has four pipeline products in Phase II trials, four in Phase I and 10 in pre-clinical phases.
Hagopian projects a possible acquisition price in the $80 range. Kite is currently trading for $60.98.
Overall, Hagopian feels that Pfizer paid too much for Medivation, but that it’s going to stimulate buying in the biotech sector. “One of the reasons that I wrote that Biotech acquisitions were going to become hot commodities,” he said, “was because the valuations had declined to a point where they could be scooped up at a discount. … This will be an important catalyst, as analysts and investors will begin to reevaluate the industry’s current valuations, in light of the industry leaders still valuing the company pipelines in the same way as they did a couple of years ago before the Biotech decline.”
