Pharma Stock Roundup: Roche, MNK Announce Acquisition Agreements, Regulatory Updates From Novartis

Key announcements this week include a couple of acquisition announcements and regulatory updates from Novartis (NVS - Free Report) .

Recap of the Week’s Most Important Stories

Roche to Buy Cancer-Focused Ignyta for $1.7 Billion: Roche (RHHBY - Free Report) , which has a strong presence in the cancer market, announced its intention to acquire Ignyta in a deal valued at $1.7 billion ($27 per share). Ignyta is focused on the development of precisely targeted therapeutics guided by diagnostic tests for cancer patients. This acquisition will add entrectinib, a selective CNS-active tyrosine-kinase inhibitor (“TKI”) to Roche’s pipeline. Entrectinib, which is being developed for tumors that harbor ROS1 or NTRK fusions, is currently in a pivotal phase II study that could support dual NDA submissions if successful. Entrectinib has Breakthrough Therapy Designation in the United States and PRIME designation in the EU. The deal is expected to close in the first half of 2018 (Read more: Roche Clinches $1.7-Billion Deal to Acquire Ignyta). Roche is a Zacks Rank #3 (Hold) stock - you can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Mallinckrodt to Boost Rare Disease Portfolio with $1.2 Billion Sucampo Acquisition: Another acquisition deal was announced this week with specialty pharma company, Mallinckrodt plc (MNK - Free Report) , saying that it will acquire Sucampo for approximately $1.2 billion ($18 per share). The deal, if it closes in the first quarter of 2018, is expected to boost Mallinckrodt’s 2018 earnings by at least 30 cents per share and 2019 earnings by at least 60 cents per share. The deal will add marketed products, Amitiza and Rescula, to Mallinckrodt’s portfolio and a couple of phase III assets, VTS-270 (Niemann-Pick type C - NPC) and CPP-1X/sulindac (familial adenomatous polyposis - FAP), to its pipeline.

The peak net sales potential of VTS-270 is estimated to be more than $150 million while that of CPP-1X/sulindac is estimated to be more than $300 million. The target is to file for VTS-270 in 2018 (potential approval in 2019) and CPP-1X/sulindac in early 2019 followed by potential approval later in the year.

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