Biotech Stock Roundup: AbbVie 4Q Results Impress, Ablynx to be Acquired by Sanofi

Acquisitions once again remained in focus this week with Ablynx agreeing to be acquired by Sanofi SNY in a deal worth approximately €3.9 billion. Seattle Genetics SGEN also announced its intention to acquire Cascadian Therapeutics for about $614 million. Meanwhile, earnings results were in focus with AbbVie ABBV reporting a strong quarter and providing an upbeat outlook for 2018.

Recap of the Week’s Most Important Stories

A Look at Q4 Earnings Results: Companies like Celgene CELG, AbbVie, Biogen and Vertex VRTX reported fourth quarter results over the last five trading sessions. Celgene (Read more: Celgene Q4 Earnings & Sales Beat on Solid Revlimid) and Vertex topped earnings as well as revenue estimates while Biogen topped revenues but missed on earnings (Read more: Biogen Q4 Earnings Miss, Sales Top, 2018 View Upbeat). Vertex also announced that it has selected two next-generation correctors, VX-659 and VX-445, to move into late-stage development as part of two different triple combination regimens for people with cystic fibrosis (“CF”). Over the last one year, Vertex’s shares are up 93.5% compared to the 6.8% gain recorded by the industry it belongs to.

AbbVie’s shares jumped following the release of better-than-expected fourth quarter 2017 results and an upbeat outlook for 2018. Results were driven by the performance of Humira, Imbruvica and Mavyret (Read more: AbbVie Soars on Q4 Results: Key Takeaways from the Earnings Call). AbbVie is a Zacks Rank #2 (Buy) stock - you can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Ablynx to be Acquired by Sanofi for €3.9 Billion: Belgium-based biopharma company Ablynx has agreed to be acquired by French pharma giant, Sanofi, at a price of €45 per share in cash, or approximately €3.9 billion. The announcement comes just a few weeks after Novo Nordisk had announced its interest in acquiring Ablynx in a deal valued at approximately €2.6 billion. Ablynx had rejected Novo Nordisk’s offer with the company’s Board saying that the proposal fundamentally undervalued Ablynx and its growth prospects.

A look at Ablynx’s pipeline shows that the company could well be in a position to launch its first product, caplacizumab (anti-vWF; acquired thrombotic thrombocytopenic purpura - aTTP), this year. Caplacizumab is currently under review in the EU while a regulatory application will be filed in the United States in the first half of 2018. The estimated annual market opportunity for aTTP, a life-threatening blood clotting disease, is expected to be about €1.2 billion. The company also has a broad range of partnerships with the potential to generate more than €10.6 billion in milestones plus royalties. Other pipeline candidates also address significant market opportunities. The company has more than 45 programs in its pipeline and eight Nanobodies in clinical development. The acquisition is expected to close by the end of the second quarter of 2018 (Read more: Sanofi on a Buyout Spree This Month, to Buy Ablynx for $4.8B).

Bellicum Down on FDA Clinical Hold: Bellicum Pharmaceuticals’s shares are down almost 30% following the company’s announcement that the FDA has placed a clinical hold on U.S. studies being conducted on BPX-501. The hold was placed after three cases of encephalopathy were deemed as possibly connected to BPX-501. The company said that the cases were complex with certain factors like prior failed transplants, prior history of immunodeficiency, concurrent infection, and administration of rimiducid in combination with other medications.

Bellicum is now waiting to receive a formal notice from the FDA as to the steps needed to be taken for the resumption of the studies. The clinical hold will not impact an ongoing registration study in Europe.

Seattle Genetics to Boost Pipeline with Cascadian Acquisition: Seattle Genetics announced that it will be acquiring Cascadian Therapeutics for $10 per share in cash, or about $614 million. With this acquisition, slated to close in the first quarter of 2018, Seattle will be adding tucatinib to its pipeline. Tucatinib is an investigational oral, small molecule tyrosine kinase inhibitor (“TKI”) that is highly selective for HER2, a growth factor receptor that is overexpressed in several cancers, including breast, colorectal, ovarian and gastric. The candidate is currently in a pivotal phase II program for HER2+ metastatic breast cancer and complements Seattle’s existing pipeline.

Performance

Medical - Biomedical and Genetics Industry 5YR % Return

Medical - Biomedical and Genetics Industry 5YR % Return

The Nasdaq Biotechnology Index declined 1.5% over the last five trading sessions. Among major biotech stocks, Alexion declined 4.6% while Gilead GILD gained 3.1%. Over the last six months, Biogen was up 20.1% while Regeneron lost 25.4%.

What's Next in the Biotech World?

Watch out for Amgen’s AMGN fourth quarter results which will be out after the market closes today (Read more: Will Amgen Benefit From Growth Drugs in Q4 Earnings?). Meanwhile, the FDA is expected to issue a decision regarding the label expansion of AMAG Pharmaceuticals’s Feraheme on February 2. AMAG is looking to expand the label beyond the current chronic kidney disease (“CKD”) indication to include all eligible adult patients with iron deficiency anemia (“IDA”).

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