One of the hot topics in the biopharmaceutical world are mergers & acquisitions (M&A). In case of a buyout, investors often benefit of a massive premium. Therefore, there are always lots of buyout rumors in the news about the next potential biotech takeover targets. Which company is going to get bought? Who will buy? And in which company should investors consider investing in?
In 2022, several biotech firms have been snapped by big pharmaceutical companies. As the valuations of many biotech companies have fallen sharply, we at Biotech Investments expect to see increasing M&A activity during the remainder of 2023.
Below you can find the official Biotech Investments M&A target list containing the hottest takeover targets in biotech industry for H2 2023.
Alnylam Pharmaceuticals
Alnylam Pharmaceuticals is a biopharmaceutical company that focuses on developing RNA interference (RNAi) therapeutics for the treatment of rare genetic, cardio-metabolic, and hepatic infectious diseases. The company was founded in 2002 and is headquartered in Cambridge, Massachusetts, USA.
The Americans have several approved drugs on the market. Onpattro (patisiran) was approved in 2018 as the first-ever RNAi therapeutic approved by the FDA for the treatment of polyneuropathy caused by hereditary transthyretin-mediated amyloidosis (hATTR) in adults. One year later, the RNAi therapeutic Givlaari (givosiran) was approved for the treatment of adult patients with acute hepatic porphyria (AHP). In 2020, the FDA approved Oxlumo (lumasiran), an RNAi therapeutic indicated for the treatment of primary hyperoxaluria type 1 (PH1) in adults and pediatric patients aged 6 years and older. Finally, Alnylams’s 4th drug drug named Amvuttra (vutrisiran) was approved in 2022 by the FDA for the treatment of hATTR in adults.
In addition, Alnylam has an industry-leading research pipeline. For example, the company is currently conducting phase 3 clinical trials for vutrisiran for the treatment of ATTR amyloidosis with cardiomyopathy. In addition, the Americans are developing Fitusiran, a novel and highly innovative RNAi therapeutic for the treatment of hemophilia A and B with or without inhibitors. Fitusiran is currently investigated in phase 3 clinical trials.
While Alnylam, with a market cap of $28 billion, is no longer a bargain, an acquisition for one of the world’s largest pharmaceutical companies could still pay off strategically.
Market cap: $24.2 billion
Axsome Therapeutics
Axsome Therapeutics is a biopharmaceutical company based in New York City, focused on developing therapies for central nervous system (CNS) disorders. The company was founded in 2012 and has since gained recognition for its innovative approach to developing treatments for difficult-to-treat conditions.
Axsome Therapeutics currently has two FDA-approved drugs on the market. The first is Auvelity, a combination of dextromethorphan and bupropion that is used to treat treatment-resistant depression (TRD) and major depressive disorder (MDD). The second is Sunosi (Solriamfeto), a dopamine and norepinephrine reuptake inhibitor (DNRI) indicated to improve wakefulness in adult patients with excessive daytime sleepiness associated with narcolepsy or obstructive sleep apnea (OSA). Both drugs have blockbuster potential.
In addition to its approved drugs, Axsome Therapeutics has a robust pipeline of investigational products targeting a range of CNS disorders such as narcolepsy, Alzheimer’s disease agitation, or multiple sclerosis (MS) cognitive dysfunction.
Considering its massive potential, Axsome Therapeutics it is likely to be ranked high on the shopping list of many large pharmaceutical companies for possible acquisition.
Market cap: $3.3 billion
BioMarin Pharmaceutical
BioMarin Pharmaceutical Inc. is a biotechnology company that specializes in developing therapies for rare genetic diseases. The company was founded in 1997 and is headquartered in San Rafael, California, with operations in the United States, Europe, Latin America, and Asia. BioMarin’s mission is to improve the lives of patients with serious rare diseases by developing innovative therapies.
BioMarin has several approved drugs on the market. Aldurazyme is an enzyme replacement therapy for the treatment of mucopolysaccharidosis I (MPS I), a rare genetic disorder that affects the body’s ability to break down certain sugars. Aldurazyme is manufactured by BioMarin and commercialized by Sanofi Genzyme in the US, EU, and internationally. Naglazyme is an enzyme replacement therapy for the treatment of mucopolysaccharidosis VI (MPS VI). In addition, BioMarin has with Kuvan a medication for the treatment of phenylketonuria (PKU), a genetic disorder that prevents the body from properly processing an amino acid called phenylalanine.
BioMarin has also a very robust clinical research pipeline. Valoctocogene roxaparvovec is a gene therapy for the treatment of hemophilia A. The drug has been approved for conditional use in the European Union and is marketed as Roctavian. In the U.S., Roctavian is currently under regulatory review. In addition, several other drug candidates are being evaluated in phase 1 clinical trials.
After BioMarin’s share price has corrected sharply in recent months, the company could once again end up on the shopping lists of large pharmaceutical companies.
Market cap: $17.3 billion
CRISPR Therapeutics
CRISPR/Cas9 is one of the hottest technologies of today’s biomedical research. Therefore, leading companies such as CRISPR Therapeutics, Intellia Therapeutics, or Editas Medicine might catch the eye of large pharmaceutical companies trying to step into this field and complement their pipeline with CRISPR/Cas9 technology. One of the leaders in this field is CRISPR Therapeutics.
CRISPR Therapeutics is based in Switzerland and specializes in developing gene therapies using CRISPR/Cas9 technology. The company was founded in 2013 by pioneers in the field of gene editing and has quickly established itself as a leader in the industry.
CRISPR Therapeutics has one FDA-approved drug on the market, called Zynteglo (autologous CD34+ cells encoding βA-T87Q-globin gene), that is used to treat transfusion-dependent beta thalassemia. Zynteglo was approved by the European Medicines Agency (EMA) and the FDA.
In addition to its approved drug, CRISPR Therapeutics has a significant number of other programs in its clinical pipeline, targeting a variety of diseases.
Market cap: $5.1 billion
Intra-Cellular Therapies
Intra-Cellular Therapies is a New York-based biopharmaceutical that develops novel drugs to treat severe neuropsychiatric and neurological diseases such as major depressive disorder (MDD), bipolar depression and Parkinson’s disease.
In December 2019, Intra-Cellular’s first drug named Caplyta (lumateperone) was approved by the FDA for the treatment of adult patients with schizophrenia. Caplyta works by targeting a range of neurotransmitter receptors in the brain, which helps to regulate dopamine and other neurotransmitters. The drug has shown significant improvement in patients’ symptoms in clinical trials. After a rather bumpy start with disappointing sales numbers, CAPLYTA net product sales are developing very positively.
In addition to Caplyta, Intra-Cellular Therapies has a robust pipeline of drug candidates targeting various neurological and psychiatric disorders, including Major Depressive Disorder (MDD) and Alzheimer’s disease agitation.
We at Biotech Investments see several catalysts that could make Intra-Cellular Therapies an interesting acquisition target. On the one hand, CAPLYTA’s sales are growing significantly, on the other hand, the company has several product candidates with the potential to generate billions of dollars in sales in a few years.
Market cap: $6.2 billion
Madrigal Pharmaceuticals
Madrigal Pharmaceuticals made it onto our list due to the promising results of their phase 3 clinical trials with Resmetirom, a potential treatment for nonalcoholic steatohepatitis (NASH). NASH is a condition that has proven extremely difficult to treat. The phase 3 clinical trial program with Resmetirom involved over 950 patients and showed that both the 80-mg and 100-mg daily doses of the drug met the FDA’s criteria for predicting clinical benefit, as seen in liver biopsies taken after 52 weeks.
Following these positive results, Madrigal quickly secured around $300 million in financing to support the development and potential marketing of Resmetirom. With late-stage studies ongoing and plans to file for accelerated approval with the FDA in noncirrhotic NASH with liver fibrosis in the first half of this year, the company is making significant strides towards bringing a NASH treatment to market.
While it’s still uncertain if the therapy will be approved by the end of 2023, investors have already taken note of Madrigal’s progress, reflected in the company’s rising stock price. However, with a market cap hovering around $4.4 billion, Madrigal could still be an attractive acquisition target for large pharmaceutical companies looking to add a potential blockbuster to their pipeline.
Market cap: $5.0 billion
Mirati Therapeutics
Mirati Therapeutics is a clinical-stage biotechnology company focused on the discovery and development of novel targeted therapies for cancer treatment. The company was founded in 1995 and is based in San Diego, California.
Mirati Therapeutics has been the subject of many acquisition rumors. The company recently gained attention for developing Adagrasib, a KRAS inhibitor approved as Krazati for treating previously treated KRAS G12C-mutated non-small cell lung cancer patients. A phase 2 trial showed that combining Adagrasib with Merck’s Keytruda shrinks tumors in 49% of patients with newly diagnosed KRAS G12C-mutated NSCLC.
Mirati is planning a phase 3 trial for the PD-L1-high population with a tumor proportion score of at least 50%. The total addressable market for KRAS inhibitors in the first-line setting is estimated at $1.5 billion for the U.S. and EU, making the company an attractive acquisition target.
Market cap: $2.4 billion
Sarepta Therapeutics
Sarepta Therapeutics is a biotechnology company focused on developing and commercializing innovative RNA-targeted therapeutics for the treatment of rare neuromuscular diseases. The company was founded in 1980 and is headquartered in Cambridge, Massachusetts, USA. Sarepta has several FDA-approved medications for the treatment of different genetic subtypes of Duchenne muscular dystrophy (DMD)
Sarepta’s clinical research program includes the evaluation of novel gene therapies for the treatment of DMD, among several other indications.
In addition to DMD, Sarepta is also developing therapies for other neuromuscular diseases, including limb-girdle muscular dystrophy, Charcot-Marie-Tooth disease, and Pompe disease. The company’s clinical research program for these diseases includes early-stage trials of gene therapy and RNA-based treatments.
Market cap: $12.1 billion