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In the wake of a buoyant year of M&A activity in the biotech sector, 2024 promises more of the same. Drug manufacturers are eager to fortify their pipelines ahead of a mammoth patent cliff set to unfold by 2028.
By the end of this decade, the top 20 pharmaceutical behemoths could witness a colossal erosion of about $180 billion in sales, posits EY analysts. This impending revenue setback is a strong motivating factor behind recent high-profile acquisitions such as Johnson & Johnson’s $2 billion swoop for antibody-drug conjugate specialist Ambrx Biopharma, Pfizer’s $43 billion purchase of Seagen, and Sanofi’s $2.2 billion buyout of Inhibrx. On top of this, Novartis has just acquired German biotech firm MorphoSys for $2.9 billion.
If you’re on the hunt for the next lucrative buyout prospect in the lively biotech arena, cast your gaze upon these three stocks.
Viking Therapeutics (VKTX)
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When last I broached the subject of Viking Therapeutics (VKTX), the stock was fetching around $26 on Feb. 8. Fast forward to today, and it’s surged to $32.23, powered by surging demand for weight loss therapies. Furthermore, market chatter suggests VKTX might be an attractive target for acquisition by a heavyweight like Pfizer.
ADC Therapeutics (ADCT)
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Just a week ago, ADC Therapeutics (ADCT) was trading at $3.90, but it has since surged to $4.86 over favorable clinical trial results in a combination treatment for relapsed follicular lymphoma, as per a company communique. Pfizer CEO Albert Bourla affirms that ADCs have become one of the most captivating prospects in biotechnology. Furthermore, these treatment modalities have been heralded as a “new era in cancer therapy,” in line with observations by Dr. Giuseppe Banna, a Consultant Medical Oncologist specializing in lung and urology tumors, who also serves as the Molecular Lead at the Department of Oncology at Portsmouth Hospitals University.
Arcellx Inc. (ACLX)
Coming soon…
Arcellx: Leading the Charge in Treating Multiple Myeloma
The Potential of anito-cel in Multiple Myeloma Treatment
Arcellx’s lead product candidate, anitocabtagene autoleucel (anito-cel), previously known as CART-ddBCMA, has emerged as a potential game-changer in treating relapsed or refractory multiple myeloma. The therapy’s promise has garnered attention as a beacon of hope for patients grappling with the challenges of this complex condition.
Deepening Collaboration and Market Opportunities
The Executive Vice President of Kite, a Gilead company, expressed enthusiasm at the acceleration of momentum in the CART-ddBCMA multiple myeloma program. The strategic move by Kite to enhance its collaboration with Arcellx points to the increased recognition of the potential of anito-cel and its significance in fulfilling unmet medical needs in the realm of multiple myeloma treatment. This step not only strengthens the pipeline for multiple myeloma but also opens doors to opportunities in the domain of lymphoma.
Strong Financial Performance Amidst Exciting Developments
While Arcellx’s EPS loss of 81 cents fell short of expectations by 12 cents, the company’s revenues of $14.96 million exceeded estimates by $2.37 million. These robust financials underscore the company’s resilience and capacity to thrive as it forges ahead with groundbreaking advancements in the field of biotech and pharmaceuticals. Additionally, with cash, cash equivalents, and securities amounting to approximately $482.7 million as of Sept. 30, the company is well-positioned to sustain its operations through 2026.
On the date of publication, Ian Cooper did not hold (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
