BioPharma, Pharma

‘Under-the-radar’ companies could become hot acquisition targets in 2018

Nearly a dozen companies were identified in a report as potentially attractive for buyouts by larger firms. Japanese companies could be big players.

The year 2018 is less than halfway through and has already seen some high-profile merger and acquisition activity in biotechnology and pharmaceuticals.

Last month, there was Novartis’ $8.7 billion acquisition of AveXis, which is developing a gene therapy for spinal muscular atrophy. But this month, Japanese drugmaker Takeda Pharmaceutical dwarfed that deal when it completed its $62 billion acquisition of Dublin-headquartered Shire, which media reports called the largest ever takeover by a Japanese company.

But in addition to such high-profile deals, a number of “under-the-radar” companies could also be potential acquisition targets this year. That’s one of the conclusions of a report from Informa forecasting life-sciences M&A in 2018.

Informa provided the section of the report discussing those companies to MedCity News. The section highlights 11 companies – all publicly traded and with market capitalizations ranging from less than $1 billion to more than $10 billion – with existing partnerships or whose pipelines align with those of potential suitors.

In a phone interview, Informa analyst Zara Fulton said the companies are referred to as being “under the radar” for acquisition given that they haven’t generated significant attention and buzz as such, but they have potentially promising therapies in development.

The companies listed in the report are: Acceleron Pharma, with Celgene as a potential suitor; Sangamo Therapeutics, with Gilead Sciences; Acorda Therapeutics, with Biogen, UCB and Mitsubishi Tanabe as potential acquirers; Mesoblast, a potential favorite for the many Japanese companies involved in regenerative medicine; OncoSec, potentially attractive for Merck & Co.; Sarepta Therapeutics, a potential target for Biogen; Ultragenyx Pharmaceutical, with Novartis and Amgen as possible buyers; Global Blood Therapeutics and BioMarin Pharmaceutical, both possible targets for Sanofi; Nektar Therapeutics, a potential option for a Bristol-Myers Squibb buyout; and Alnylam Pharmaceuticals, for which Sanofi and Celgene could compete.

In addition to the report’s position that Mesoblast could see interest from Japanese companies, Fulton said the Shire deal could also start a trend toward Japanese acquisitions of companies in the West. Already, she said, Informa’s analysis is seeing a trend toward Japanese firms acquiring companies with commercialization platforms.

Indeed, 2017 and 2018 have seen several US acquisitions by Japanese drug firms.

Last year, Takeda acquired oncology-focused Ariad Pharmaceuticals for about $5.2 billion. Also last year, Otsuka Pharmaceutical acquired privately held Neurovance, a company developing drugs for attention-deficit hyperactivity disorder, for $100 million upfront and up to up to $150 million in milestones. And this year, Astellas completed its $225 million acquisition of Mitobridge, which is conducting research in diseases associated with mitochondrial dysfunctions. All three US companies are based in Cambridge, Massachusetts.

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