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.

Qual­i­ty Con­trol in Cell and Gene Ther­a­py – What’s Re­al­ly at Stake?

In early 2021, Bluebird Bio was forced to suspend clinical trials of its gene therapy for sickle cell disease after two patients in the trial developed cancer. As company scientists rushed to assess whether there was any causal link between the therapy and the cancer cases, Bluebird’s stock value plummeted – as did those of multiple other biopharma companies developing similar therapies.

While investigations concluded that the gene therapy was unlikely to have caused cancer, investors and the public may be more skittish regarding the safety of gene and cell therapies after this episode. This recent example highlights how delicate the fields of cell and gene therapy remain today, even as they show great promise.

Chris Gibson (Photo By Vaughn Ridley/Sportsfile for Web Summit via Getty Images)

Re­cur­sion founders gin for­tunes as IPO back­ers show­er $436M on one of the biggest boasts in AI -- based on some very small deals

In the AI drug development world, boasting often comes with the territory. Yet few can rival Recursion when it comes to claiming the lead role in what company execs like to call the industrialization of drug development, with promises of continued exponential growth in the number of drugs it has in the pipeline.

On Friday, the Salt Lake City-based biotech translated its unicorn-sized boasts into a killer IPO, pricing more than 24 million shares at the high end of its range and bringing in $436 million — with a large chunk of that promised by some deep-pocket backers.

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Q1: A flood of in­vestor cash drove biotech's num­bers to new record highs, and the tor­rent of cash is mov­ing up­stream fast

If you thought biotech was booming last year, wait until you get a load of the numbers from Q1 2021.

On virtually every level, with one exception, the money engine was working around the clock in the first 3 months of this year. Venture capital has reached such a fever peak that the average B round now weighs in at an average mega-weight value of $100 million. The money flow is also finding its way to the mouth of the R&D river, where discovery work now merits the big bucks instead of cautionary seed funds.

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UP­DAT­ED: New Kaiser analy­sis shows how lim­it­ing price ne­go­ti­a­tions to tar­get­ed drugs may bet­ter fo­cus up­com­ing leg­is­la­tion

As Congress considers whether to adopt sweeping new legislation to lower prescription drug prices across the board, the Kaiser Family Foundation is out with a new report on Monday showing how a more targeted approach on a subset of drugs might be a more efficient way to save government funds.

“This analysis shows that Medicare Part D and Part B spending is highly concentrated among a relatively small share of covered drugs, mainly those without generic or biosimilar competitors,” wrote Juliette Cubanski, deputy director of the program on Medicare policy at KFF, and Tricia Neuman, SVP of KFF. “Focusing drug price negotiation or reference pricing on a subset of drugs that account for a disproportionate share of spending would be an efficient use of administrative resources, though it would also leave some potential savings on the table.”

James Garner, Kazia CEO (PR Newswire)

Kazia swipes an ex-Sanofi mol­e­cule for £1M up­front as they look to repli­cate their Genen­tech snag

Kazia has spent most of its young life trying to develop a single Genentech castoff it swiped for $5 million into a brain cancer drug. Now, with that molecule in a pivotal trial, the Aussie biotech is adding another old Big Pharma asset to its reserves.

Kazia announced Monday they in-licensed a small molecule called EVT801 from Evotec for a nominal upfront fee – $1.4 million — and $428 million in potential milestones. The company said they plan to launch a Phase I trial for the drug, a new VEGFR inhibitor, later this year.

Tillman Gerngross (Adagio)

Till­man Gern­gross' Covid-19 an­ti­body moon­shot scores $336M with the help of new ace CFO. Is an IPO next?

Less than a year into its existence, serial biotech entrepreneur Tillman Gerngross’ antibody play Adagio has raced ahead into a pivotal trial for its lead drug for Covid-19 on the back of some very promising preclinical data. Now, crossover investors led by Peter Kolchinsky at RA are rolling up the Brinks truck — and that could spell an IPO in the offing for Adagio.

Adagio has bagged $336 million as part of a Series C round led by RA Capital to advance lead single-shot antibody ADG20 through a pivotal Phase I/II/III trial for the treatment of mild to moderate Covid-19 patients at high risk of infection, the biotech said Monday.

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When is a drug re­al­ly a de­vice? Court knocks down FDA ap­peal in try­ing to sort that grey area

It’s always a surprise when a court has to step in to tell the FDA that it erred in performing one of its main duties: classifying whether a medical product is drug or a device.

But that’s what the US Court of Appeals for the District of Columbia did on Friday, making clear to the world’s top drug regulator that Genus Medical Technologies’ contrast agent barium sulfate (also known as Vanilla SilQ) should not be considered a drug, as the FDA had said, but a medical device.

Jami Rubin (EQRx)

Ja­mi Ru­bin, once fa­bled for grilling bio­phar­ma ex­ecs, de­camps to head fi­nance at drug pric­ing dis­rupter

As Goldman Sachs’ top pharmaceutical analyst, Jami Rubin was known for asking the tough questions. Now, as she takes the lead on EQRx’s mission to rewrite the rules of drug pricing, we’ll see how good her answers are.

Rubin made the jump to biotech on April 5, becoming EQRx’s new CFO, the company said Monday. She’s coming from PJT Partners, where she’s been a partner providing strategic guidance for biotech and pharmaceutical companies for the last couple years. With EQRx’s recent $500 million Series B round in the books, it wouldn’t be a surprise if she was already lining up a public debut.

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Seagen gets Au­gust PDU­FA for Pad­cev ex­pan­sions; Adap­tate pulls in new cash for gam­ma delta T cell an­ti­bod­ies

Seagen is riding the wave of two new priority reviews straight to the FDA.

The Bothell, WA-based biotech and their partners at Astellas announced Monday that two supplemental BLAs for Padcev had been accepted by US regulators. FDA has set Aug. 17 as the PDUFA date for the reviews.

“With our recent regulatory submissions, we intend to provide the highest level of clinical evidence supporting Padcev use — overall survival data from a randomized Phase III trial — and expand availability in multiple countries where there is unmet medical need,” said Astellas oncology chief Andrew Krivoshik.