Thursday, January 3, 2019
Celgene upgraded to Neutral from Sell at Goldman Sachs
Goldman Sachs analyst Terence Flynn upgraded Celgene (CELG) to Neutral and raised his price target for the shares to $88 from $71 after the company entered into a definitive agreement to be acquired by Bristol-Myers Squibb (BMY). While the analyst still sees execution risk on Celgene’s pipeline, he now expects the shares to move on M&A potential. He sees a balanced risk/reward relative to his new price target. Flynn takes no view on the likelihood of the proposed merger closing.
https://thefly.com/landingPageNews.php?id=2843495
Corbus to collaborate with Kaken to commercialize Lenabasum in Japan
Corbus Pharmaceuticals announced that they have entered into a strategic collaboration with Kaken Pharmaceutical Co. for the development and commercialization in Japan of Corbus’ investigational drug lenabasum for the treatment of systemic sclerosis and dermatomyositis, two rare and serious autoimmune diseases. Under the terms of the agreement, Kaken receives an exclusive license to commercialize and market lenabasum in Japan for systemic sclerosis and dermatomyositis. Kaken will make an upfront payment to Corbus of $27M. Corbus will be eligible to receive in addition up to $173M upon achievement of certain regulatory, development and sales milestones as well as double-digit royalties. Current patient numbers for systemic sclerosis and dermatomyositis1 in Japan are 28,000 and 9,000, respectively, according to the companies. Yuval Cohen, PhD., CEO of Corbus, said, “Kaken is a well-regarded leader in rare autoimmune diseases in Japan with a proud history of scientific and medical innovation. By working together, we believe we can expand the Japanese footprint for lenabasum alongside Corbus’ ongoing efforts in the U.S. and E.U. This collaboration is an important next step in achieving our vision of becoming the global leader in treating inflammatory diseases by focusing on the endocannabinoid system.”
Green Growth reaffirms commitment to takeover Aphria
GREEN GROWTH REAFFIRMS COMMITMENT TO ACQUIRE APHRIA: On Monday, Green Growth Brands reaffirmed its commitment to launch an offer to purchase all shares of Aphria . “Since we announced our intention to launch the takeover of Aphria we have seen two things. First, Aphria shareholders are welcoming a 45%+ premium offer because they understand the significant value that can be unleashed by our combined teams, assets and geographies. Second, a real interest in the market to understand Green Growth and our valuation,” Green Growth chief executive officer Peter Horvath said. “When investors consider our trailing revenue, recent license wins in Nevada, and a buildout in the new market of Massachusetts they agree that it is not a question of if Green Growth reaches C$7.00 per share, but when. We understand that there are some in the market who want to focus on destroying value at Aphria, but we are committed to creating it.” The company said it is “confident in the certainty of a C$300M financing at C$7.00 per share. Over 10% of Aphria’s shareholders have already indicated their support of the offer.” It added that “Aphria’s board has two options: Engage with Green Growth as a serious buyer to create real value or continue their endless analysis which will result in the destruction of shareholder value.”
Alexion, Biogen seen as potential targets after Celgene buyout
Shares of Celgene (CELG) are on the rise after the company announced that it has agreed to be acquired by Bristol-Myers Squibb (BMY) in a cash and stock transaction with an equity value of about $74B, or $102.43 a share. Commenting on the news, Piper Jaffray analyst Christopher Raymond told investors that the deal is a “big positive” for the sector and argued that Alexion Pharmaceuticals (ALXN) and Biogen (BIIB) would seem to make sense as potential targets among large-caps.
BRISTOL-MYERS TO BUY CELGENE: Bristol-Myers Squibb and Celgene announced that they have entered into a definitive merger agreement under which the former will acquire the latter in a cash and stock transaction with an equity value of approximately $74B. Under the terms of the agreement, Celgene shareholders will receive 1.0 Bristol-Myers Squibb share and $50 in cash for each share of Celgene. Celgene shareholders will also receive one tradeable Contingent Value Right for each share of Celgene, which will entitle the holder to receive a payment for the achievement of future regulatory milestones. The Boards of Directors of both companies have approved the combination. Based on the closing price of Bristol-Myers Squibb stock of $52.43 on January 2, 2019, the cash and stock consideration to be received by Celgene shareholders at closing is valued at $102.43 per Celgene share and one CVR. When completed, Bristol-Myers Squibb shareholders are expected to own approximately 69% of the company, and Celgene shareholders are expected to own approximately 31%. The combined company will have nine products with more than $1B in annual sales. Giovanni Caforio, Chairman and CEO of Bristol-Myers Squibb, will continue to serve as Chairman of the Board and CEO of the company when the transaction closes. Two members from Celgene’s Board will be added to the Board of Directors of Bristol-Myers Squibb. Bristol-Myers Squibb and Celgene expect to complete the transaction in the third quarter of 2019.
ALEXION, BIOGEN COULD BE NEXT: In a research note following the news, Piper Jaffray’s Raymond told investors that he remains “bullish on biotech” and that he views Celgene’s acquisition as a “big positive” for the sector. While he acknowledged that Celgene has its challenges with about 64% of its revenue facing generic entry beginning in 2022, he argued that “this is clearly positive” to the sector in that it reminds investors of upside potential in the space. When large-cap biotechs find themselves under duress, more often than not the exit is a take-out and the announced acquisition in light of Celgene’s recent history of clinical, regulatory, and operational setbacks and subsequent share price decline certainly fits this pattern, Raymond noted. The analyst believes the market is likely to ask “who’s next?” Among large-caps, Alexion Pharmaceuticals and Biogen would seem to make sense as potential targets, Raymond said, adding that BioMarin Pharmaceutical (BMRN) could also be a perennial takeout candidate as an immediate bolt-on rare disease business for any strategic buyer. While any small to mid cap could likely be seen as a take-out candidate, the analyst believes Aimmune Therapeutics (AIMT), Deciphera Pharmaceuticals (DCPH) and Rigel Pharmaceuticals (RIGL) in particular “could make sense to any strategic buyer” as all three have assets with clearly defined clinical profiles that could “fit nicely” within established commercial infrastructures.
CELGENE BUYOUT POSITIVE FOR FATE: In a research note of his own, Piper Jaffray analyst Edward Tenthoff told investors that he believes Bristol-Myers Squibb’s agreement to acquire Celgene is in part driven by the long-term potential of cellular therapies to treat cancer. As such, the analyst argued that the deal is a positive for Fate Therapeutics (FATE), which he noted is developing a pipeline of allogeneic and induced pluripotent stem cell natural killer and T-cell therapies. Fate is a potential acquisition target for its “rich cell therapy pipeline and platform,” Tenthoff contended, adding that it remains a top pick for 2019. He reiterated an Overweight rating and a $23 price target on Fate’s shares.
DiaMedica Therapeutics announces FDA clearanc of IND application to DM199
DiaMedica Therapeutics announced that the FDA has accepted DiaMedica’s Investigational New Drug application (“IND”) for the initiation of a Phase Ib clinical trial of DM199 in patients with moderate or severe Chronic Kidney Disease, or CKD, caused by Type I or Type II diabetes. The multi-site clinical study will enroll 32 subjects to evaluate DM199 safety, tolerability and drug levels in this specific population. The study will enroll subjects over a 12 day period and will also include other end points that include renal biomarkers. The results from this Phase Ib study will assist DiaMedica in the design of upcoming Phase II studies in patients suffering from rare diseases and CKD. The DM199 drug levels from this Phase Ib study will also help determine the optimal dose levels for testing in the Phase II studies.
Agenus gets $1M from Gates Foundation to enable QS-21 innovations
Agenus (AGEN) announced that the Bill & Melinda Gates Foundation awarded it a grant of ~$1M to develop an alternative, plant cell culture-based manufacturing process to ensure the continuous future supply of Agenus’ proprietary QS-21 Stimulonadjuvant, a key component of multiple vaccines targeting infectious and endemic diseases. Agenus’ QS-21 Stimulon is a proprietary adjuvant, currently incorporated as part of Glaxo Smith Kline’s (GSK) highly efficacious Shingrix vaccine. Additionally, Agenus’ QS-21 Stimulonis used in GSK’s Mosquirix vaccine and numerous other clinical-stage vaccines, including Agenus’ own cancer vaccines. Given the criticality of QS-21 in making vaccines efficacious, Agenus plans to develop a cell-culture based, environment friendly manufacturing technique as an alternative future supply. QS-21 is currently extracted from Chilean soap bark trees, exclusively sourced from a localized area in Chile. “We are delighted to be working in partnership with the Bill & Melinda Gates Foundation in our efforts to revolutionize the way we produce QS-21,” said Dr. Garo Armen, Chairman and CEO of Agenus. “The Gates Foundation has recognized the value of consistent supply of high-quality QS-21 to power vaccines. We appreciate their commitment to bringing innovation to drive access to important therapies.”
Celgene downgraded to Market Perform from Outperform at Leerink
Leerink analyst Geoffrey Porges downgraded Celgene (CELG) to Market Perform from Outperform after the company agreed to be acquired by Bristol-Myers (BMY), stating that “the best deal is sometimes the only deal.” He lowered his price target on Celgene shares to $102 from $112.
Subscribe to:
Posts (Atom)