• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • TheStreet Smarts
  1. Home
  2. / Investing
  3. / Stocks

3 Potential Biotech Buyout Targets

There are signs that M&A deal activity will pick up in the sector after a couple of subpar years.
By BRET JENSEN
Jan 13, 2023 | 11:30 AM EST
Stocks quotes in this article: ALBO, IPSEY, BTAI, MRK, EXEL, PFE, REPL, RHHBY

My trading week got off to a happy note. One of the bigger biotech holdings in my portfolio was bought out on Merger Monday.

That would be Albireo Pharma (ALBO) , a name I profiled more than once on these pages. Ipsen (IPSEY) purchased it for $42 of cash and one contingent value right a share.

The deal expanded Ipsen's rare disease portfolio with Albireo's drug Bylvay. This compound was recently approved to treat pruritus in certain patients with progressive familial intrahepatic cholestasis both here and in Europe.

The acquisition had better than a 90% buyout premium. It was a nice score even if the majority of my holdings in the stock were within covered call positions. Hopefully, it is another sign that M&A deal activity will pick up in the sector after a couple of subpar years. In today's column I will highlight a few of my small and midcap biotech/biopharma holdings that would also make logical buyout targets.

Let's start with BioXcel Therapeutics (BTAI) . This name is similar to Albireo in that it also has a drug that was recently approved by the FDA. That would be Igalmi which was approved for the acute treatment of agitation linked to schizophrenia or bipolar 1 or 2 disorder in adults last April.

While the initial rollout has been predictably slow, the stock got a nice upgrade in December from Goldman Sachs and the stock has been on real roll in recent months. Another of the company's compounds in development showed good results recently to treat prostate cancer as part of an early stage study within a combination therapy with Merck's (MRK) blockbuster Keytruda. I don't think I would be chasing the name after the recent rally, but would add on pullbacks as its assets could be attractive to a larger concern.

I would be remiss to not mention midcap oncology name Exelixis (EXEL) which recently was my 'stock pick for 2023'. Its key asset is CABOMETYX which is approved for several oncology indications and continues to gain market share. At this point it is a blockbuster with north of $1 billion of annual revenues, nicely profitable and still seeing sales growth in the low teens. The company also has a better than $2 billion cash hoard on its balance sheet.

A buyout at a reasonable premium would instantly be accretive to a larger name like Pfizer (PFE) that wanted to expand its footprint in oncology.

Finally, we have Replimmune (REPL) . This clinical stage concern is focused on using its proprietary Immunotherapy platform to design and develop product candidates that are intended to activate the immune system against cancer. Replimmune is specifically targeting solid tumor types (hot and cold) susceptible to checkpoint inhibitors.

The company has several compounds in development both as part of combination therapies as well as monotherapies. Replimmune recently addressed its funding needs and pick up a key collaboration deal with drug giant Roche (RHHBY) . Given oncology has been one of biggest areas for M&A in recent years, I could easily see Replimmune drawing interest should deal activity pick up in the sector.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, Bret Jensen was long ALBO, BTAI, EXEL and REPL.

TAGS: Mergers and Acquisitions | Investing | Markets | Stocks | Technical Analysis | Trading | Biotechnology

More from Stocks

Market Holds Its Own Amid the Chaos

James "Rev Shark" DePorre
Mar 20, 2023 4:53 PM EDT

Let's check the rotation turning under the surface, the likelihood of rate hikes and why investors are scratching their heads over this action.

Market's Giving Us a Gut-Check, but Not Necessarily a 2000, 2008 Replay

Brad Ginesin
Mar 20, 2023 2:26 PM EDT

Here's why, despite the unravelling of several major banks, Apple can still be owned and AI is still worth investing in.

Trading Foot Locker Now Comes With a Risk

Bruce Kamich
Mar 20, 2023 2:08 PM EDT

Let's see what the outlook looks like after earnings.

How to Trade China's E-commerce PDD Holdings Now

Bruce Kamich
Mar 20, 2023 1:17 PM EDT

Previously know as Pinduoduo, weak consumer spending has plagued the stock.

Market Rotation Hits Reverse

James "Rev Shark" DePorre
Mar 20, 2023 11:51 AM EDT

The Dow and the small caps turned up on Monday, but many charts that I'm looking at are still a mess, and I don't see any reason to put cash to work.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 10:28 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    There are exceptions to conventional trading wisdo...
  • 05:43 PM EDT CHRIS VERSACE

    Latest AAP Podcast

    I'm joined by Real Money contributor Peter Tchir a...
  • 08:20 AM EDT PETER TCHIR

    Pre-CPI Thoughts

    I believe the risk to CPI is "asymmetric." It ...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2023 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login