Will a 'risk-off' mindset hasten cell therapy M&A? Iovance surges on buyout chatter
Is it time for some cell therapy M&A?
Investors of Iovance Biotherapeutics certainly thought so, sending its stock $IOVA up as much as 40% after Bloomberg reported that the cancer-focused biotech is talking to potential buyers.
While 2019 saw a number of high-profile gene therapy company takeovers — led by Roche’s $4.3 billion bid of Spark as Astellas went for Audentes, Biogen snapped up Nightstar and Vertex absorbed Exonics — large players appeared to prefer partnering on the cell therapy front, particularly when it comes to cancer. Hal Barron put his weight behind Rick Klausner’s startup as he rebuilt GlaxoSmithKline’s cancer pipeline. Takeda turned to MD Anderson to license their natural killer cell therapy.
So a wholesale acquisition of Iovance, which has enjoyed a nice surge since reporting positive preliminary data with its tumor infiltrating lymphocyte (TIL) therapy, could mark something of a return of major M&A interest since the go-go days of CAR-T.
The company didn’t comment on the chatter during its earnings call. But analysts quickly got to work picking out who the suitors might be.
“Both Takeda and Gilead have demonstrated with past deals that they are interested in cell [therapy],” Stifel analyst Benjamin Burnett wrote in a note. “Because of Kymriah, Novartis also comes to mind.”
Baird’s Madhu Kumar threw Bristol-Myers Squibb, Merck and Roche into the mix.
“While we would have assumed this process would start after top-line data from the registrational studies in post-PD-1 MM and post-chemo CC, our conversations with investors over the last year have made clear that an offer with a decent premium would be welcome,” he added. “And in light of the high-risk macro environment driven by coronavirus and the upcoming election, this risk-off mindset, in our view, might support a more proximal takeout scenario for IOVA shares.”
BLA filings for lifileucel in post-PD-1 metastatic melanoma as well as LN-145 — a “breakthrough” treatment for post-chemo cervical cancer — are both expected by the end of this year, according to execs.
Boris Peaker of Cowen pegs the peak sales potential in each of these indications at $1 billion, translating to a potential $4 to $6 billion takeout value, “albeit based on optimistic assumptions.”
Social image: Iovance