Gene-therapy stocks are the flavor of the day on Wall Street.
Shares of the gene-therapy firm
more than doubled in premarket trading Tuesday on news that the Japanese drugmaker
would buy the company for around $3 billion, paying $60 per share in cash. Audentes (ticker: BOLD) shares closed on Monday at $28.61.
Analysts said that they expected other gene-therapy companies to trade higher in response.
“There seems to be a demand for late-stage gene therapy companies, and big pharma is willing to pay high premium for such companies,” wrote Citi Research analyst Mohit Bansal in a note published late Tuesday night.
The back story. Shares of Audentes Therapeutics were up 34.2% so far this year as of the close of the market on Monday. The company has a gene therapy in its pipeline for a rare genetic disorder called X-linked myotubular myopathy that it plans to submit for regulatory approval in the U.S. in the middle of next year.
It is planning to begin clinical trials for a gene therapy for Pompe disease, another rare genetic condition. The company has its own gene-therapy manufacturing facility, which sets it apart from some small-cap competitors.
Astellas Pharma’s American depositary receipts (ALPMY) were up 0.9% in premarket trading. The stock of the Japanese drugmaker is up 34.3% so far this year.
What’s new. The Audentes acquisition is the latest in a string of acquisitions of gene-therapy firms by big pharma companies, including
(RHHBY) deal to buy
(NVS) acquisition of AveXis.
Cantor Fitzgerald analyst Kristen Kluska highlighted in a Monday evening note that Audentes had built its own manufacturing facility. Kluska suggested that there are implications for other possible acquisition targets with in-house manufacturing.
“With the significant capital that companies such as Pfizer are putting into manufacturing, we believe large-cap companies would be interested in those companies with in-house capabilities as well as with the expertise,” Kluska wrote.
Looking ahead. In a Tuesday morning note, PiperJaffray analyst Christopher Raymond agreed that more gene-therapy acquisitions were likely, noting that plenty of big pharma firms haven’t yet made major moves into gene therapy.
“We do think with this deal now just the latest in a string of gene therapy take outs, and still many large pharma players without critical mass or meaningful exposure to gene therapy, it’s fair to ask—who’s next?” Raymond wrote.
Gene-therapy names jumped in premarket trading.
(BMRN) was up 1.9%,
(RARE) gained 2.2%,
(MBIO) was up 3.2%, and
(ABEO) rallied 8.5%.
Write to Josh Nathan-Kazis at email@example.com