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Jonathan Poyer

Acquisitions in the News, But Momentum Trading Driving a Select Few Biotech Names. How Long Will That Last?

Updated: Apr 11





Post the Fed meeting the S&P 500 made its 20th all-time high for 2024 while US 2s10s have been inverted for a record 625 days (prior record was 624 in August ’78).



The S&P Select Biotech Index is consolidating around the 50 day moving average with end of quarter rebalancing on the horizon.



The pharma sector remains in the forefront of investor consciousness with headlines of Kate Middleton's cancer diagnosis. The Duchess of Cambridge is apparently undergoing preventative chemotherapy for an undisclosed cancer. In addition, several news outlets including the WSJ are indicating Medicare could cover obesity drugs for patients with comorbidities, such as cardiovascular disease (CVD). Medicare is prevented from covering drugs for obesity alone, but analysts are projecting $100-150 billion plus of peak revenue for obesity therapies with upside from additional insurance coverage.


M&A:


  • Abbvie (ABBV) announced plans to acquire microcap Landos Biopharma (LABP) for ~$137 million plus a potential CVR worth up to an additional $75 million

  • NuVation Bio (NUVB) announced the all stock acquisition of AnHeart Therapeutics (private). The acquisition adds taletrectinib, a next-generation, potentially best-in-class ROS1 inhibitor with Breakthrough Therapy Designations currently enrolling two pivotal studies for the treatment of patients with ROS1-positive NSCLC. The acquisition also adds safusidenib, a potentially best-in-class mutant IDH1 inhibitor currently being evaluated in a global Phase 2 study of patients with grades 2 and 3 IDH1-mutant glioma

  • AstraZeneca (AZN) announced a definitive agreement to acquire Fusion Pharmaceuticals (FUSN) for $21.00 per share in cash ($2 billion upfront) plus a non-transferable contingent value right (CVR) of $3.00 per share in cash (~$400 million) payable upon achievement of a regulatory milestone. Similar to Eli Lily's (LLY) recent purchase of Point Biopharma (PNT), the deal announcement comes ahead of key Ph 2 data for FUSN that is expected in a couple of weeks at AACR

  • Novartis (NVS) announced the expiration of the HSR waiting period for the pending acquisition of MorphoSys (MOR)


Regulatory:


  • Regeneron (REGN) announced a CRL for CD3xCD20 bispecific odronextimab with FDA citing that confirmatory studies need to be underway at time of resubmission. It appears the agency is cracking down on the conduct of confirmatory clinical trials


Clinical:


  • Axsome therapeutics (AXSM) announced AXS-12 met the primary endpoint in the P3 SYMPHONY trial in Narcolepsy

  • Chugai (4519 JT) reported the P3 trial of Enspryng in patients with Generalized Myasthenia Gravis (gMG) did not reach expectations for clinical benefit. The interleukin-6 (IL-6) inhibitor is already approved in neuromyelitis optica spectrum disorder (NMOSD) and is being investigated in several other neurological autoimmune and inflammatory diseases that may benefit from this mechanism. Notably, Tourmaline Bio (TRML) who is developing a long acting IL-6 inhibitor fell on the news despite not having an active clinical trial ongoing in gMG. FcRn competitors Argenx (ARGX) and Immunovant (IMVT) rose given improved positioning


Capital Markets:


  • Nkarta (NKTX) announces a $240 million spot secondary at $10/share after pivoting from oncology (AML) to auto-immunology as biotech specialists continue to gobble up record volumes of paper

  • Madrigal Pharmaceuticals (MDGL) announced an upsized $600 million public offering consisting to fund commercial activities for Rezdiffra (resmetirom) for the treatment of adults with noncirrhotic non-alcoholic steatohepatitis (NASH) with moderate to advanced liver scarring (fibrosis)


Corporate Updates & Earnings:


  • United Therapeutics (UTHR) announced a $1 billion accelerated share repurchase program (~9% of shares outstanding)

  • Dyne (DYN) CEO transition announced with President and CEO Joshua Brumm stepping down and John Cox appointed President, CEO effective immediately

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