4 Gene Therapy Players Likely To Become Buyout Targets In 2019

 | Apr 07, 2019 09:45PM ET

The biotech industry has had a good start in 2019. The deal , Bristol-Myers has offered to acquire big biotech, Celgene (NASDAQ:CELG), for $74 billion. The large-cap companies are looking to acquire or partner with smaller biotech companies to boost their pipeline with newer technologies. Acquisitions, which are done generally by giving a premium on current price, and partnerships, which provide funds to smaller companies to support continued development of pipeline candidates, boost the stock price of the target companies.

A few of the M&A deals so far in 2019 involve companies with promising gene therapy candidates. Gene therapy, a new wave of innovation in pharma space, enables to mitigate the adverse effects of a malfunctioning disease-causing gene. These therapies have a different approach from traditional drug therapies as the underlying cause can be treated instead of the symptoms. These therapies generally target rare indications including hemophilia, Duchenne muscular dystrophy (“DMD”) and Parkinson's disease among others, which will likely lead to higher price realization. The gene therapy segment is expected to attract a lot more attention from pharma players going forward. Better efficacy achieved by gene therapies in clinical studies and likely rise in involvement of pharma companies may lead to higher M&A activity in the gene therapy segment.

In 2018, Novartis acquired AveXis for its gene therapy candidates and Celgene acquired Juno Therapeutics to add CAR T-cell therapy for cancer. In 2019, Roche and Biogen (NASDAQ:BIIB) offered to buy Spark Therapeutics (NASDAQ:ONCE) and Nightstar Therapeutics (NASDAQ:NITE) , respectively. Both Spark and Nightstar are developing gene therapies targeting rare indications. Pfizer (NYSE:PFE) collaborated with innovative gene therapy developer Vivet Therapeutics, a privately-held company. There are several companies in the biotech industry, which are developing gene therapy candidates or shifting their focus to developing similar therapies. Looking at this trend, we expect some more deals targeting gene therapy makers.

We present four companies with promising gene therapy candidates in their pipelines. These companies may become acquisition targets going forward.

uniQure N.V. (NASDAQ:QURE) )

The company is a promising player in the space. It is engaged in creating a pipeline of innovative gene therapies that have been developed both internally and through its collaboration, focused on cardiovascular diseases, with Bristol Myers-Squibb.

The company’s lead candidate AMT-061, an experimental AAV5-based gene therapy incorporating the FIX-Padua variant, is being evaluated in the phase III HOPE-B pivotal study for the treatment of patients with severe and moderately severe hemophilia B. In January 2019, the company received clearance from the FDA to initiate clinical study for AMT-130 for the treatment of Huntington’s disease.

uniQure’s stock has moved up 115.4% so far this year against the industry’s decline. The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here .