4 Solid Gene Therapy Buyout Bets Post Audentes-Astellas Deal
Zacks Investment Research | Dec 04, 2019 09:37PM ET
The ongoing M&A wave in the pharma/biotech sector gains further momentum from the significant rally in the share price movement of gene therapy company Audentes Therapeutics, Inc. (NASDAQ:BOLD) earlier in the week. The stock’s impressive upsurge followed the Japanese company Astellas Pharma Inc’s announcement to acquire Audentes for a cash consideration of $60 per share or a total deal value of approximately $3 billion. The offer price represents a premium of 110% to Audentes’ closing share price of $28.61 on Dec 2, 2019.
It is interesting to note that attractive modest valuations on account of a disappointing run in 2018 rekindled interest in the ever-volatile biotech sector from the start of this year. Evidently, the spotlight is back on mergers & acquisitions. A slowdown in mature products due to increasing competition and the rise of biosimilars forced most pharma behemoths to target lucrative buyouts in the biotech space to bolster their pipelines. While oncology and immuno-oncology are the key areas of focus, companies targeting non-alcoholic steatohepatitis (NASH), rare diseases and candidates based on gene therapy also promise great potential, thereby making the respective areas profitable for investments.
Bristol-Myers Squibb Company (NYSE:BMY) , one of the largest pharma giants, acquired leading biotech company Celgene (NASDAQ:CELG) for a whopping $74 billion in what could be a major acquisition of recent times. Thereafter, a slew of deals was struck with most companies eyeing smaller entities with impressive pipelines, the latest being the Swiss pharma leader Novartis, which reached an agreement to acquire U.S.-based biopharmaceutical company, The Medicines Company, for $9.7 billion.
Earlier in the year, Roche (OTC:RHHBY) announced that it will acquire gene therapy company Spark Therapeutics Inc. However, the buyout has been getting delayed, dampening hopes of investors.
Nevertheless, the recent acquisition announcement by Astellas brings the gene therapy space into prominence once again.
What is Gene Therapy?
Gene therapy enables to mitigate the adverse effects of a malfunctioning disease-causing gene. The therapy intends to add a functional gene to a person's system, replacing the malfunctioning one to cure diseases. The gene is delivered to a cell though a carrier known as vector. The therapy has a different approach from the traditional drug treatments as the underlying cause can be treated with it.
Gene therapy is set to become one of the most vital spaces with high prospects in the volatile biotech sector. The promising therapy is being evaluated for varied diseases, such as hemophilia, Duchenne muscular dystrophy (DMD), Parkinson's disease, cancer among others.
Gene Therapy Companies in Focus
Given the potential of the therapy to treat complex diseases, the companies developing candidates using gene therapy are in focus. Let us consider a few players with promising drugs/candidates in their portfolios/pipelines as they appear attractive targets of acquisition:
uniQure N.V. (NASDAQ:QURE) is one of the most promising players in this space with a focused pipeline of innovative gene therapies for hemophilia B and Huntington’s disease. Etranacogene dezaparvovec is its lead gene therapy candidate and includes an AAV5 vector incorporating the Factor IX-Padua variant. The company is currently conducting a pivotal study in patients with severe and moderately-severe hemophilia B. The candidate is granted a Breakthrough Therapy Designation by the FDA. In early September 2019, the company completed patient enrollment in its HOPE-B pivotal study of etranacogene dezaparvovec for the treatment of patients with severe and moderately severe hemophilia B. uniQure expects to provide top-line Factor IX (FIX) activity data on all patients before the end of 2020 and submit a Biologics License Application (BLA) for the marketing authorization of etranacogene dezaparvovec in 2021.
With a market cap of $2.85 billion, this company is the front runner for a likely buyout. uniQure currently carries a Zacks Rank #2 (Buy). You can see Original post
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