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.

It’s fi­nal­ly over: Bio­gen, Ei­sai scrap big Alzheimer’s PhI­I­Is af­ter a pre­dictable BACE cat­a­stro­phe rais­es safe­ty fears

Months after analysts and investors called on Biogen and Eisai to scrap their BACE drug for Alzheimer’s and move on in the wake of a string of late-stage failures and rising safety fears, the partners have called it quits. And they said they were dropping the drug — elenbecestat — after the independent monitoring board raised concerns about…safety.

We don’t know exactly what researchers found in this latest catastrophe, but the companies noted in their release that investigators had determined that the drug was flunking the risk/benefit analysis.

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Lisa M. DeAngelis, MSKCC

MSK picks brain can­cer ex­pert Lisa DeAn­ge­lis as its next CMO — fol­low­ing José Basel­ga’s con­tro­ver­sial ex­it

It’s official. Memorial Sloan Kettering has picked a brain cancer expert as its new physician-in-chief and CMO, replacing José Baselga, who left under a cloud after being singled out by The New York Times and ProPublica for failing to properly air his lucrative industry ties.

His replacement, who now will be in charge of MSK’s cutting-edge research work as well as the cancer care delivered by hundreds of practitioners, is Lisa M. DeAngelis. DeAngelis had been chair of the neurology department and co-founder of MSK’s brain tumor center and was moved in to the acting CMO role in the wake of Baselga’s departure.

Penn team adapts CAR-T tech, reengi­neer­ing mouse cells to treat car­diac fi­bro­sis

After establishing itself as one of the pioneer research centers in the world for CAR-T cancer therapies, creating new attack vehicles to eradicate cancer cells, a team at Penn Medicine has begun the tricky transition of using the basic technology for heart repair work.

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Tal Zaks. Moderna

The mR­NA uni­corn Mod­er­na has more ear­ly-stage hu­man da­ta it wants to show off — reach­ing new peaks in prov­ing the po­ten­tial

The whole messenger RNA field has attracted billions of dollars in public and private investor cash gambled on the prospect of getting in on the ground floor. And this morning Boston-based Moderna, one of the leaders in the field, wants to show off a few more of the cards it has to play to prove to you that they’re really in the game.

The whole hand, of course, has yet to be dealt. And there’s no telling who gets to walk with a share of the pot. But any cards on display at this point — especially after being accused of keeping its deck under lock and key — will attract plenty of attention from some very wary, and wired, observers.

“In terms of the complexity and unmet need,” says Tal Zaks, the chief medical officer, “this is peak for what we’ve accomplished.”

Moderna has two Phase I studies it wants to talk about now.

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It's not per­fect, but it's a good start: FDA pan­elists large­ly en­dorse Aim­mune's peanut al­ler­gy ther­a­py

Two days after a fairly benign review from FDA staff, an independent panel of experts largely endorsed the efficacy and safety of Aimmune’s peanut allergy therapy, laying the groundwork for approval with a risk evaluation and mitigation strategy (REMS).

Traditionally, peanut allergies are managed by avoidance, but the threat of accidental exposure cannot be nullified. Some allergists have devised a way to dose patients off-label with peanut protein derived from supermarket products to wean them off their allergies. But the idea behind Aimmune’s product was to standardize the peanut protein, and track the process of desensitization — so when accidental exposure in the real world invariably occurs, patients are less likely to experience a life-threatening allergic reaction.

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Rit­ter bombs fi­nal PhI­II for sole lac­tose in­tol­er­ance drug — shares plum­met

More than two years ago Ritter Pharmaceuticals managed to find enough silver lining in its Phase IIb/III study — after missing the top-line mark — to propel its lactose intolerance toward a confirmatory trial. But as it turned out, the enthusiasm only set the biotech and its investors up to be sorely disappointed.

This time around there’s little left to salvage. Not only did RP-G28 fail to beat placebo in reducing lactose intolerance symptoms, patients in the treatment group actually averaged a smaller improvement. On a composite score measuring symptoms like abdominal pain, cramping, bloating and gas, patients given the drug had a mean reduction of 3.159 while the placebo cohort saw a 3.420 drop on average (one-sided p-value = 0.0106).

Ear­ly snap­shot of Ad­verum's eye gene ther­a­py sparks con­cern about vi­sion loss

An early-stage update on Adverum Biotechnologies’ intravitreal gene therapy has triggered investor concern, after patients with wet age-related macular degeneration (AMD) saw their vision deteriorate, despite signs that the treatment is improving retinal anatomy.

Adverum, on Wednesday, unveiled 24-week data from the OPTIC trial of its experimental therapy, ADVM-022, in six patients who have been administered with one dose of the therapy. On average, patients in the trial had severe disease with an average of 6.2 anti-VEGF injections in the eight months prior to screening and an average annualized injection frequency of 9.3 injections.

Alex Ar­faei trades his an­a­lyst's post for a new role as biotech VC; Sanofi vet heads to Vi­for

Too often, Alex Arfaei arrived too late. 

An analyst at BMO Capital Markets, he’d meet with biotech or pharmaceutical heads for their IPO or secondary funding and his brain, trained on a biology degree and six years at Merck and Endo, would spring with questions: Why this biomarker? Why this design? Why not this endpoint? Not that he could do anything about it. These execs were coming for clinical money; their decisions had been made and finalized long ago.

Arde­lyx bags its first FDA OK for IBS, set­ting up a show­down with Al­ler­gan, Iron­wood

In the first of what it hopes will be a couple of major regulatory milestones for its new drug, Ardelyx has bagged an FDA approval to market Ibsrela (tenapanor) for irritable bowel syndrome.

The drug’s first application will be for IBS with constipation (IBS-C), inhibiting sodium-hydrogen exchanger NHE3 in the GI tract in such a way as to increase bowel movements and decrease abdominal pain. This comes on the heels of two successful Phase III trials.