Analysts praise vertex pharmaceuticals (VRTX) acquired on Thursday Alpine immunoscience (ALPN) — the $4.9 billion deal that sent Alpine stock into the stratosphere.
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Alpine may have a best-in-class treatment for IgA nephropathy, a chronic kidney disease that often leads to end-stage renal disease. The drug pobetacicept blocks a receptor called BAFF and a ligand called APRIL. There are multiple competitors ahead of Alpine in this space. Novartis (NVS), Otsuka Pharmaceutical, bella therapeutics (bella).
But analysts say Alpine’s new drug could eventually lead its class.
“Despite being one to two years behind its competitors, in our view pove has superior APRIL/BAFF inhibition compared to other APRIL/BAFF inhibitors, and is expected to improve clinical (efficacy) “It is potentially best-in-class because of its potential to improve performance,” Bank of America said. Securities analyst Jeff Meacham said in a note. “Additionally, pove has the convenience of one (subcutaneous) injection every four weeks, and we expect it to be well received by prescribers.”
In the stock market’s morning trading, Alpine stock soared 36.6% to 64.26. Shares soared 20.8% on Wednesday amid rumors of a deal. Vertex Pharmaceuticals shares also rose 1% to 401.57. Vera stock also jumped 4.5% to 43.50.
Vertex Pharmaceuticals adds kidney disease pipeline
The companies expect the transaction to close in the second half of this quarter. Leerink Partners analyst Thomas Smith said in a note that the deal values Alpine stock at $65 per share, representing a premium of about 67% to Tuesday’s closing price.
“Overall, we believe the acquisition of Alpine is a strong strategic fit for Vertex. Vertex will leverage its resources and expertise in large-scale clinical development and commercial experience/infrastructure in specialized markets to “We can maximize the value of pove.”
The deal also speaks to Vertex Pharmaceuticals’ confidence that Alpine can pivot pobetacicept to other related diseases, Smith said. In a news release, the companies pointed out that pobetacicept may have promise in autoimmune diseases such as membranous nephropathy and lupus nephritis.
Leerink’s Smith has an Outperform rating on Alpine stock.
Notably, this $4.9 billion price tag is more than what Novartis paid for Chinook Therapeutics and its potential IgA nephropathy treatment. Novartis acquired Chinook for $3.5 billion.
But Meacham, the Bank of America analyst, said Vertex Pharmaceuticals is simply “putting money into good work.” Investors have long awaited an encore to Vertex’s leading cystic fibrosis treatment franchise. Vertex has already entered the kidney disease field as a treatment for his APOL1-mediated kidney disease, a genetic disease that causes progressive kidney damage.
“While it has been a long time since Vertex has made an acquisition of this size, management has emphasized that this is the right transaction at the right time and that Vertex will not be considering any future acquisitions,” he said.
He reiterated his buy rating on Vertex stock.
Alpine stock has a high evaluation
According to IBD Digital, Alpine stock is ranked among the top biotech stocks. Additionally, Alpine stock has a perfect Relative Strength Rating of 99, which ranks its performance in the top 1% of all stocks, regardless of industry group. Alpine stock also has a strong overall rating of 97, which is a measure of a stock’s key fundamental and technical indicators.
The Vertex Pharmaceuticals stock has a promising overall rating of 87.
Follow Alison Gatlin on Platform X, formerly known as Twitter. @IBD_AGatlin.
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