An­a­lysts’ top 10 biotech takeover tar­gets are con­cen­trat­ed in two key ar­eas

CEO Schwan of Swiss drug­mak­er Roche ad­dress­es the an­nu­al news con­fer­ence in Basel Get­ty


While Cred­it Su­isse was siz­ing up the amount of over­seas mon­ey that will soon be avail­able to the top buy­ers in bio­phar­ma, their an­a­lysts put to­geth­er a list of top takeover tar­gets, ranked by mar­ket cap. I’m pulling out the top 10 here to go along­side the main sto­ry — for End­points News In­sid­ers — on who has $171 bil­lion to play with, along with sug­ges­tions on how they can spend that mon­ey.

A few key words leap out at us in this as­sess­ment. One is on­col­o­gy, which is grab­bing the li­on’s share of the mon­ey in the deal­mak­ing world. Two more: Rare dis­eases. Reg­u­la­tors are quick to hur­ry these new drugs along, with de­vel­op­ers us­ing small stud­ies to of­fer proof of ef­fi­ca­cy and safe­ty. And the price tags can be ex­treme. That’s a win­ning com­bi­na­tion for many of the buy­ers out there.

What’s not par­tic­u­lar­ly win­ning are the mar­ket caps you see be­low. These com­pa­nies may be at­trac­tive, but on­ly at the right price. I go through an ex­er­cise some­times where I imag­ine what Roche CEO Sev­erin Schwan would say in pri­vate about some of these num­bers.

Now add a takeover pre­mi­um.

I’m us­ing the Cred­it Su­isse num­bers for the re­port, but they’ve shift­ed a lit­tle.


1 Ver­tex $VRTX
Mar­ket cap: $37 bil­lion
Fo­cus: Cys­tic fi­bro­sis and rare dis­eases

The scoop: Ver­tex ex­ecs have been hav­ing a hey­day with new, promis­ing da­ta for their CF com­bos. The com­pa­ny pulled off a re­mark­able feat in switch­ing from hep C — now dom­i­nat­ed by Gilead — to CF. In­vestors have bid up their shares, in­trigued by the up­side of a buy­out deal for a com­pa­ny that ap­pears to some to be a tempt­ing tar­get, even at this gar­gan­tu­an val­u­a­tion. The math, though, will not be easy.


2 Alex­ion $ALXN
Mar­ket cap: $24 bil­lion
Fo­cus: Hema­tol­ogy/rare dis­eases

Lud­wig Hantson

The scoop: The big as­set here is Soliris, of course, which has a num­ber of ri­vals in the clin­ic. But Alex­ion has been turn­ing heads with ‘1210, its next-gen suc­ces­sor for PNH. And even though the rest of the pipeline has lit­tle to of­fer, with Lud­wig Hantson look­ing for new as­sets as he moves the com­pa­ny to Boston, any buy­er would have lit­tle trou­ble in swal­low­ing the op­er­a­tions. Big ques­tion re­mains the same as Ver­tex. How do you make these num­bers work?


3 In­cyte $IN­CY
Mar­ket cap: $21 bil­lion
Fo­cus: On­col­o­gy and hema­tol­ogy

The scoop: This one seems more in the realm of the pos­si­ble. The biotech has a mar­ket­ed prod­uct and a lead as­set in IDO1 that’s grabbed a lot of at­ten­tion. Pricey? And how. But this is one way to make a quick splash.


4 Bio­Marin $BM­RN
Mar­ket cap: $15 bil­lion
Fo­cus: Rare dis­eases

The scoop: Bio­Marin has been on the top 10 list of buy­out tar­gets for so long, it seems to have brand­ed it­self as an at­trac­tive ac­qui­si­tion. But through the years, it’s been all smoke and no fire. The com­pa­ny is a leader in rare dis­eases, which quite a few big buy­ers would ben­e­fit from.


5 Alk­er­mes $ALKS
Mar­ket cap: $7.9 bil­lion
Fo­cus: Schiz­o­phre­nia, de­pres­sion

The scoop: Alk­er­mes has had its ups and downs in the last cou­ple of years. which is one rea­son why the stock has nev­er ful­ly re­turned to peak form af­ter the drub­bing it took in ear­ly 2016 on the first round of bad news for ‘5461 in de­pres­sion. The biotech has since made a re­mark­able turn­around there, set­ting up high ex­pec­ta­tions that keep Alk­er­mes in the top 10. The com­pa­ny has some mar­ket­ed prod­ucts and a late-stage pipeline for po­ten­tial buy­ers to in­spect. But the stock has been much low­er with­out trig­ger­ing a bid. What’s the big mo­ti­va­tion to move now?


6 Tesaro $TSRO
Mar­ket cap: $4.5 bil­lion
Fo­cus: Can­cer

The scoop: Tesaro has been on the top buy­out list ever since Ze­ju­la was ap­proved. But no one has come up with the cash so far, and every­one has had a chance to run the num­bers. A leader in the PARP field, the biotech would seem to have the per­fect pro­file for an ac­qui­si­tion by any­one in the mar­ket look­ing to pay a pre­mi­um for a can­cer drug. But the top team has yet to make a deal work, de­spite all the buzz.


7 Gala­pa­gos $GLPG
Mar­ket cap: $3.9 bil­lion
Fo­cus: In­flam­ma­tion and im­munol­o­gy

The scoop: Gala­pa­gos finds it­self in a late-stage race with fil­go­tinib on rheuma­toid arthri­tis and Crohn’s, which earned a $725 mil­lion up­front for a part­ner­ship with Gilead. That’s helped keep this biotech in the big leagues among buy­out tar­gets, though it’s a wild­ly com­pet­i­tive field with lots of out­stand­ing play­ers. In­vestors seem to ei­ther love this com­pa­ny or hate it. We’ll find out soon enough who was right. But no one is ig­nor­ing Gala­pa­gos.


8 Puma $PBYI
Mar­ket cap: $3.8 bil­lion
Fo­cus: Can­cer

The scoop: Talk about love and hate. The shorts loved to hate on Puma, cit­ing some is­sues ner­a­tinib had with di­ar­rhea. The FDA wasn’t too con­cerned, though, and the ex­perts on the agency pan­el bare­ly men­tioned an is­sue that they felt could be suc­cess­ful­ly man­aged while treat­ing pa­tients. Puma now has a prod­uct on the mar­ket, and like Tesaro looks like the kind of bolt-on that revs up a lot of the big buy­ers in the on­col­o­gy field.


9 Sarep­ta $SRPT
Mar­ket cap: $3.7 bil­lion
Fo­cus: Duchenne mus­cu­lar dy­s­tro­phy, rare dis­eases

The scoop: What­ev­er you think about Sarep­ta, and every­one thinks some­thing, they have a DMD drug on the mar­ket and it isn’t go­ing any­where. Sure, there was plen­ty of con­tro­ver­sy about the FDA ap­proval on sus­pi­cious da­ta from on­ly 12 pa­tients, but the agency shows no sign of back­ing away now. The biotech, mean­while, has been mak­ing progress with the pipeline, de­ter­mined not to lose its edge as a long list of ri­vals take a shot at DMD. Now that the con­tro­ver­sy has died down, will a big buy­er step in, or do they want to avoid the headache?


10 Por­to­la $PT­LA
Mar­ket cap: $3.2 bil­lion
Fo­cus: Car­dio­vas­cu­lar

The scoop: Last year the com­pa­ny re­port­ed that its an­ti­co­ag­u­lant has just bare­ly failed a key end­point in ex­am­in­ing the drug’s ef­fi­ca­cy (p=0.054) among a key co­hort of pa­tients with el­e­vat­ed D-dimer lev­els. The com­pa­ny went on, though, to do an ex­plorato­ry analy­sis of the re­sults, claim­ing a win in re­duc­ing the risk of ve­nous throm­boem­bolism — or sim­ply, blood clots — for their drug com­pared to enoxa­parin. Reg­u­la­tors agreed, ap­prov­ing the ther­a­py last sum­mer for acute­ly ill pa­tients. Now an­oth­er drug could be poised for an OK, leav­ing Por­to­la in the top 10. Car­dio is one of the tough­est fields in R&D, and some big play­ers may find it eas­i­er to mar­ket these drugs more ef­fi­cient­ly.

Cell and Gene Con­tract Man­u­fac­tur­ers Must Em­brace Dig­i­ti­za­tion

The Cell and Gene Industry is growing at a staggering 30% CAGR and is estimated to reach $14B by 20251. A number of cell, gene and stem cell therapy sponsors currently have novel drug substances and products and many rely on Contract Development Manufacturing Organizations (CDMO) to produce them with adherence to stringent regulatory cGMP conditions. Cell and gene manufacturing for both autologous (one to one) and allogenic (one to many) treatments face difficult issues such as: a complex supply chain, variability on patient and cellular level, cell expansion count and a tight scheduling of lot disposition process. This complexity affects quality, compliance and accountability in the entire vein-to-vein process for critically ill patients.

A lab technician works during research on coronavirus at Johnson & Johnson subsidiary Janssen Pharmaceutical in Beerse, Belgium, Wednesday, June 17, 2020. (Virginia Mayo/AP Images)

UP­DAT­ED: End­points News ranks all 28 play­ers in the Covid-19 vac­cine race. Here's how it stacks up to­day

(This piece was last updated on August 13. Endpoints News will continue to track the latest developments through the FDA’s marketing decisions.)

The 28 players now in or close to the clinical race to get a Covid-19 vaccine over the finish line are angling for a piece of a multibillion-dollar market. And being first — or among the leaders — will play a big role in determining just how big a piece.

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Cal­lid­i­tas bets up to $102M on a biotech buy­out, snag­ging a once-failed PBC drug

After spending years developing its oral formulation of the corticosteroid budesonide, Sweden’s Calliditas now has its sights set on the primary biliary cholangitis field.

The company will buy out France-based Genkyotex, and it’s willing to bet up to €87 million ($102 million) that Genkyotex’s failed Phase II drug, GKT831, will do better in late-stage trials.

Under the current agreement, Calliditas $CALT will initially pay €20.3 million in cash for 62.7% of Genkyotex (or €2.80 a piece for 7,236,515 shares) in early October, then circle back for the rest of Genkyotex’s shares under the same terms. If nothing changes, the whole buyout will cost Calliditas €32.3 million, plus up to  €55 million in contingent rights.

Inside FDA HQ (File photo)

The FDA just ap­proved the third Duchenne MD drug. And reg­u­la­tors still don’t know if any of them work

Last year Sarepta hit center stage with the FDA’s controversial reversal of its CRL for the company’s second Duchenne muscular dystrophy drug — after the biotech was ambushed by agency insiders ready to reject a second pitch based on the same disease biomarker used for the first approval for eteplirsen, without actual data on the efficacy of the drug.

On Wednesday the FDA approved the third Duchenne MD drug, based on the same biomarker. And regulators were ready to act yet again despite the lack of efficacy data.

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Stéphane Bancel speaks to President Donald Trump at the White House meeting on March 2 (AP Images)

UP­DAT­ED: Mod­er­na of­fers steep dis­count in US sup­ply deal — but still takes the crown with close to $2.5B in vac­cine con­tracts

The US pre-order for Moderna’s Covid-19 vaccine is in.

Operation Warp Speed is reserving $1.525 billion for 100 million doses of Moderna’s Phase III mRNA candidate, rounding out to about $15 per dose — including $300 million in incentive payments for timely delivery. Given that Moderna has a two-dose regimen, it’s good for vaccinating 50 million people. The US government also has the option to purchase another 400 million doses for a total of $6.6 billion, or $16.5 per dose.

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Qi­a­gen in­vestors spurn Ther­mo Fish­er’s takeover of­fer, de­rail­ing a $12B+ deal

Thermo Fisher Scientific had announced an $11.5 billion takeover of Dutch diagnostics company Qiagen back in March, but the deal apparently did not sit well with Qiagen investors.

After getting hammered by critics who contended that Qiagen $QGEN was worth a lot more than what Thermo Fisher wanted to spend, investors turned thumbs down on the offer — derailing the buyout even after Thermo Fisher increased its offer to $12.6 billion in July. Qiagen’s share price has been boosted considerably by Covid-19 as demand for its testing kits surged.

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Bayer's Marianne De Backer with Endpoints founder John Carroll, Endpoints@JPM20 (Jeff Rumans for Endpoints News)

UP­DAT­ED: Hunt­ing a block­buster, Bay­er forges an $875M-plus M&A deal to ac­quire women’s health biotech

Bayer has dropped $425 million in cash on its latest women’s health bet, bringing a UK biotech and its non-hormonal menopause treatment into the fold.

KaNDy Therapeutics had its roots in GlaxoSmithKline, which spun out several neuroscience drugs into NeRRe Therapeutics back in 2012. Five years later the team created a new biotech to focus solely on NT-814 — which they considered “one of the few true innovations in women’s health in more than two decades.”

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Xuefeng Yu in Hong Kong, 2019 (Imaginechina via AP Images)

CanSi­no reaps $748M wind­fall from Shang­hai IPO — as it warns Covid-19 vac­cine won't be a huge mon­ey mak­er

CanSino began the year with a clear goal to secure a secondary listing on Shanghai’s STAR market. Then something more urgent came along: As a rising vaccine developer on a mission to bring global standard immunizations to China, it heeded the call to make a vaccine to protect against a virus that would paralyze the whole world.

Xuefeng Yu and his team managed to keep doing both.

More than a month after CanSino’s Covid-19 vaccine candidate is authorized for military use in China, the Hong Kong-listed company has made a roaring debut in Shanghai. It fetched $748 million (RMB$5.2 billion) by floating 24.8 million shares, and soared 88% on its first trading day.

James Wilson, WuXi Global Forum at JPM20

FDA puts up a red light for Pas­sage Bio’s first gene ther­a­py pro­gram, de­lay­ing a pro­gram from James Wilson's group at Penn

Gene therapy pioneer James Wilson spearheaded animal studies demonstrating the potential of new treatments injected directly into the brain, looking to jumpstart a once-and-done fix for an extraordinarily rare disease called GM1 gangliosidosis in infants. His team at the University of Pennsylvania published their work on monkeys and handed it over to Passage Bio, a Wilson-inspired startup building a pipeline of gene therapies — with an IND for PBGM01 to lead the way.

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