Alex Philippidis Senior News Editor Genetic Engineering & Biotechnology News

Which Biopharmas Do Wall Street Watchers View As Top Buyout Candidates?

You could wallpaper your living room with all the speculation and unfulfilled predictions churned out by analysts, investors, journalists, and other Wall Street watchers about what companies may end up being taken over by whom.

So it’s more than notable that of the “Nine Takeover Targets of 2015” spotlighted around this time last year by GEN, one company is actually being acquired—Medivation, for which Pfizer is shelling out $14 billion in a deal intended to strengthen the pharma giant’s oncology portfolio.

Notwithstanding that blockbuster deal, the value of mergers and acquisitions (M&A) during the first 8 months of this year actually shrank compared to a year ago, despite an increase in the total number of transactions. During January–August 2016, the total value of biotech M&A slipped nearly 18% to $77.448 billion from $94.27 billion a year earlier, even as the number of deals ballooned to 869 from 655 in January–August 2015, according to the monthly Biotech Report of the Zephyr database of M&A, IPO, private equity, and venture capital deals.

More than likely, that decline reflects a preference by buyers for smaller, multi-million-dollar “bolt-on” acquisitions, in which a drug or pipeline is combined into the buyer’s portfolio, rather than the multi-billion-dollar mergers that reshaped big pharma nearly a decade ago. Whatever their value, the increasing number of M&A deals can be expected to generate even more buzz about additional biopharmas eventually being bought by or merged with other companies—such as the ones highlighted in this GEN List.

As in past years, the 2016 edition of our Takeover Targets combines some new names with a few usual suspects included in past year’s GEN Lists. For each company mentioned, this list explains where talk of acquisitions has surfaced, and why. Small- to medium-capitalization biopharma companies continue to dominate Wall Street speculation by showing promise for reasons ranging from approvals for new products and rising sales to successful clinical programs in indications that are expected to generate billions in new revenues.

Acadia Pharmaceuticals

Having gained FDA approval in April for its Nuplazid™ (pimavanserin), indicated for hallucinations and delusions associated with Parkinson’s disease psychosis, Acadia Pharmaceuticals has found itself at the center of takeover talk through for much of this year.

One reason why is the 80% surge in Acadia‘s stock price since the approval, announced April 29. Another reason is the drug’s bullish sales forecast. The Motley Fool healthcare analyst Brian Feroldi cited projections that Nuplazid could generate more than $3 billion in annual peak sales when he included the company as one among five potential acquisition targets for a big pharma. And that $3 billion, he added, “could prove to be a conservative number if Nuplazid also wins label expansion claims for Alzheimer's disease psychosis or schizophrenia,” for which the drug is in late-stage studies.

“I think that's a big enough number to grab the attention of many big pharma companies, and that's why it wouldn't surprise me one bit to see one of them make an offer to buy Acadia outright,” Feroldi concluded.

Agreeing with that assessment is Brian Nichols of BNL Finance: “We think $10 billion is possible, at least $5 billion, and as current expectations prove too conservative and Wall Street starts to take Nuplazid’s potential serious, M&A offers will become more serious too.”

Two biotech giants have been among many speculated as potential buyers of Acadia. Michael Yee of Morningstar has said that Biogen expressed interest in buying the company, while Ken Cacciatore, analyst at Cowen & Co., has cited Teva Pharmaceutical as a possible acquirer. In a note to investors, Cacciatore has pegged a potential price for Acadia at $6 billion—$1 billion more than what analyst Charles Duncan of Piper Jaffray projected as a price target for Acadia.

Needham has cited Teva among 11 potential suitors for Acadia, a list that included AstraZeneca, Allergan, Eli Lilly, Lundbeck, Merck, Novartis, and Takeda Pharmaceutical.

Alexion Pharmaceuticals

Citing their own anonymous sources, perhaps the same ones, Bloomberg and Reuters both reported last month that Roche was exploring financing options for acquiring Alexion. Because Roche did not immediately deny the reports, Jim Cramer of CNBC and predicted that the pharma giant will eventually buy Alexion. Other market watchers see Alexion eventually being bought, though they have not named Roche as a potential buyer. Barron’s on June 29 named the company among 15 biotechs that it said “Could Be Takeover Targets,” while Do Kim, an analyst with BMO Capital Markets, also named the company as an acquisition possibility.

However,’s Adam Feuerstein has taken an opposite view, predicting no acquisition will occur: “Sure, Roche would like to dig into the orphan drug market, but buying Alexion would not produce much cost-saving synergies because the two companies don't have overlapping research or manufacturing capabilities.”

Behind the takeover talk is the expectation of rising sales for Alexion’s main marketed drug Soliris® (eculizumab), the first and so far only treatment approved for two conditions: paroxysmal nocturnal hemoglobinuria (PNH), to reduce hemolysis, and atypical hemolytic uremic syndrome (aHUS), to inhibit complement-mediated thrombotic microangiopathy. As Feuerstein noted, Soliris sales have been predicted to reach about $1.5 billion this year and soar further to peak at annual sales of $3 billion to $6 billion, depending which analyst you believe.

Alexion is well on its way to exceeding 2016 sales forecasts for Soliris, having generated $1.366 billion in the first half of this year, up 10.5% from a year ago. Soliris accounted for 94% of Alexion’s first-half 2016 revenues—though that percentage is expected to slip now that the company’s marketed enzyme replacement therapies include Strensiq® (asfotase alfa) for perinatal/infantile- and juvenile-onset hypophosphatasia (HPP) and Kanuma® (sebelipase alfa) for lysosomal acid lipase deficiency (LAL-D).


Relypsa’s July 21 announcement that it was being acquired for $1.53 billion by Galenica Group stoked speculation that it wouldn’t be long before Ardelyx itself would also find a buyer.

“Ardelyx has a treatment that has properties very similar to Relypsa's Veltassa®, so if companies were interested in purchasing Relypsa then they might be interested next in Ardelyx,” Wedbush analyst Liana Moussatos told Moussatos and another Wedbush analyst, Kelechi Chikere, said July 21 in a note to investors that Sanofi was a prime potential buyer for Ardelyx, since Sanofi signed a two-year agreement last year with Relypsa to provide commercial support complementing Relypsa’s sales force for Veltassa (patiromer for oral suspension).

In August, Citigroup analysts Yigal Nochomovitz, Ph.D., and Yang Huang included the company among six biotechs they predicted “could be M&A targets next” following the Pfizer–Medivation deal. A month earlier, Bret Jensen in Investors Alley said talk of Ardelyx being acquired was being fueled in no small part by its pipeline. The company has a hyperkalemia treatment candidate, RDX227675, entering Phase III trials, as well as tenapanor, which is in registration studies for irritable bowel syndrome with constipation (IBS-C) and for end-stage renal disease (ESRD) in patients on dialysis. The company could file up to three NDAs next year, said Jensen, who said Allergan “seems a logical suitor” for Ardelyx given Allergan’s interest in expanding its gastrointestinal holdings.

Last year, tenapanor failed a Phase IIa trial in stage 3 chronic kidney disease patients with type 2 diabetes and albuminuria, after which Ardelyx paid $15 million upfront and $10 million in R&D costs to regain worldwide tenapanor rights from AstraZeneca. However, during 2015, tenapanor succeeded in Phase IIb studies in patients with IBS-C and in hyperphosphatemic patients with chronic kidney disease on hemodialysis. 


Biogen attracted intense investor speculation in August, after The Wall Street Journal reported that the company had become the subject of takeover interest from Merck & Co. and Allergan, citing unnamed sources.

Behind their reported interest is Biogen’s relatively strong results—it finished the second quarter with GAAP net income of $1.05 billion, up 13% from a year ago—as well as dominance of the nearly $20 billion-a-year market for multiple sclerosis drugs. Leading that market is Biogen’s Tecfidera® (dimethyl fumarate), which racked up $1.933 billion in revenues in the first half of this year, up 13% from January–June 2015. Yet Tecfidera’s Q2 revenue of $987 million fell short of the $991 million average projected by analysts surveyed by Bloomberg News.

A companywide sales slowdown prompted Biogen last year to reduce its workforce by 11%, or about 880 employees, in a restructuring that included termination of several pipeline drug development programs. Biogen over the past year has named new managers to head its sales and R&D operations and has sought to narrow its therapeutic focus to neurological and opthalmological treatments. The company is spinning off its hemophilia business as an independent, publicly traded company, a move expected to be completed next year.

Given CEO George Scangos’ planned retirement, combined with the company’s strong quarterly results and strong pipeline, “the company is considered an attractive takeover opportunity,” Sarah Collins of Market Realist wrote on September 9. On September 24, Brian Nichols of BNL Finance included the company as one of 10 biotechs whose stocks are “most likely to soar behind M&A.”

BioMarin Pharmaceutical

BioMarin Pharmaceutical has been on every list of takeover targets compiled by GEN since the first such list published in 2013, the year Roche was rumored to be interesting in buying the company for $15 billion. Roche has been mentioned this year too as a potential buyer, with shares jumping 9% on the morning of July 7 based on a report to that effect by Betaville, which cited anonymous sources.

Numerous news outlets, financial firms, analysts, and others have repeatedly talked about BioMarin ending up being bought someday, somehow, by some other company. This year, according to 24/7 WallSt., takeover speculation has been further fueled by the company’s strong first- and second-quarter results. During the first half of this year, BioMarin revenues jumped 18.5% over January–June 2015 to $536.9 million, more than halfway to the $1 billion mark projected by Thomson Reuters I/B/E/S.

Net product revenue from Morquio A syndrome enzyme replacement therapy Vimizim® (elosulfase alfa) nearly doubled in Q2, zooming nearly 72% for the first half to $179.4 million. Also boosting BioMarin revenues is the first and only FDA-approved phenylketonuria (PKU) treatment Kuvan® (sapropterin dihydrochloride), net product revenue for which jumped 51% year-over-year, to $166.9 million.

Another factor in this year’s takeover talk is the theory by some analysts that companies that lost out to Pfizer for Medivation will try to snap up other large biotechs. “Many investors that speak to us believe that this could include BioMarin,” Jefferies analyst Jeffrey Holford wrote in an August 22 note to clients quoted by CNBC. According to, Jefferies and Goldman Sachs believe a potential buyer for BioMarin is Sanofi, having been publicly rebuffed in its effort to buy Medivation back in the spring.

Gilead Sciences

Kevin Kedra, an analyst with Gabelli, told Barron’s on September 21 that Allergan could be positioning itself to acquire Gilead, posing the not-so-rhetorical question: “What if [Allergan CEO and President] Brent Saunders is playing chess while the market is playing checkers?” by making smaller strategic acquisitions that would lead to buying Gilead, especially of nonalcoholic steatohepatitis (NASH) drug developers. Kedra cited Allergan’s planned acquisition of Tobira Therapeutics for up to $1.695 billion.  

One analyst disagreed publicly with Kedra: “Nope, not gonna happen,” declared Max Nisen in BloombergGadfly. “If [Allergan] is serious about liver disease, then buying the industry leader makes some sense. But everything Allergan is doing suggests it’s positioning itself as a competitor to Gilead’s NASH drugs, not a parent.” A day after buying Tobira, Allergan bought another smaller NASH player, snapping up Akarna Therapeutics for $50 million upfront.

Other market watchers have pegged Gilead as an M&A play. Writing in The Motley Fool, Sean Williams noted that Gilead shares had fallen by roughly one-third between June 2015 and last month. One reason was falling sales caused by larger discounts to insurers for its hepatitis C blockbuster drug Harvoni® (ledipasvir/sofosbuvir).

Another was clinical setbacks: On September 22, Gilead halted a Phase II/III trial of its GS-5745 in ulcerative colitis patients, six months after halting six trials of cancer candidate Zydelig® (idelalisib) in combination with other treatments, following reports of deaths and other adverse effects. Williams said Gilead could be attractive to either Pfizer or Merck & Co. Ken Kam of Marketocracy wrote in Forbes July 20 that Gilead was “the type of game-changing acquisition” needed by Merck, reasoning that it “could dramatically lower the overhead if the two were to merge,” with the combined company better able to grow profits much faster than either company could achieve alone.


Growing revenue from its marketed drug Jakafi® (ruxolitinib) has allowed Incyte to expand and build its commercial infrastructure in the U.S. and Europe, all while continuing to discover and develop new treatments in oncology and inflammation. “The combination of growing revenue and strong R&D makes Incyte a great acquisition target,” Simos Simeonidis, Ph.D., managing director/senior biotech analyst at RBC Capital Markets, declared July 14 in Barron’s, which has listed the company among 15 potential takeover targets.

Jakafi is indicated for intermediate- or high-risk myelofibrosis as well as polycythemia vera (PV) in patients with inadequate response or intolerance to hydroxyurea. In June, Incyte raised hopes of an expanded PV indication when it trumpeted 28-week Phase III data showing Jakafi was superior to best available therapy for the blood cancer. Incyte’s potential for oncology pipeline growth makes the company a takeover target, Brian Abrahams of Jefferies told CNBC.

Jakafi’s success makes it “a currently marketed product large enough to count”—one criterion for “the ideal acquisition candidate in this environment,” John McCamant, editor of The Medical Technology Stock Letter, wrote on July 25. A month later, 24/7 WallSt extolled Incyte’s clinical-stage compounds—baricitinib (Phase III for rheumatoid arthritis, Phase II completed in psoriasis and diabetic nephropathy), ruxolitinib cream (Phase II for alopecia areata), and INCB52793 (Phase I/II for advanced malignancies)—saying the three “could drive several billion in revenue, something important for an acquiring company looking to acquire assets.” 

Also in August, Gabelli called the company an especially attractive target along with BioMarin Pharmaceutical (see above). Todd Hagopian of Marketocracy pegged Incyte as one of four potential acquisition targets for Gilead after it was outbid when Pfizer agreed to shell out $14 billion for Medivation. The high price of that deal enhances Incyte’s takeover odds, Eric Schmidt of Cowen told CNBC

Intercept Pharmaceuticals

The scramble to develop treatments for nonalcoholic steatohepatitis (NASH) has drawn analysts and market watchers to Intercept Pharmaceuticals. Reuters stoked speculation by reporting on February 12, based on anonymous sources, that the company was considering a sale after receiving interest from potential buyers. Six months later, Reuters quoted a note to investors from BMO Capital Markets analyst Do Kim, who included Intercept among companies to watch for as possible acquisition targets.

Last month, Credit Suisse analyst Alethia Young cited an important reason for investor interest in Intercept: Its lead product candidate Ocaliva® (obeticholic acid) has advanced to Phase III in NASH, ahead of Gilead Sciences’ Phase II NASH candidate simtuzumab: “A combination of regimens will be an important part of the treatment paradigm and we think Intercept is positioned well here long-term,” Young wrote, according to Investor’s Business Daily.

Ocaliva improved fibrosis in 35% of patients, versus 19% on placebo, noted Brian Nichols of BNL Finance: “It is just a matter of time before big pharma pays a big premium for this NASH leader,” Nichols said September 24 when he included Intercept as one of “10 Biotech Stocks Most Likely to Soar Behind M&A.” Many of those 10, he added, are NASH drug developers: “The race to develop an effective treatment for NASH might be the most competitive and urgent space in all of biotech.”

Intercept and competitors are eager to tap into a market that RBC Capital Markets analyst Michael Yee has pegged as potentially between $5 billion to $10 billion a year. Wedbush Securities analyst Liana Moussatos told The Deal May 7 that Intercept could be bought for as much as $10.3 billion, or more than five times the combined $1.745 billion that Allergan has disclosed spending to acquire NASH drug developers Tobira Therapeutics and Akarna Therapeutics. Needham and Barron’s have also identified Intercept as a takeover target

Kite Pharma

Kite Pharma’s status as a leading developer of chimeric antigen receptor (CAR) T-cell therapies—and the clinical missteps of rival Juno Therapeutics—have positioned the company as a potential top takeover target. Kite last month reported positive topline data for its lead product candidate KTE-C19 in the Phase II portion of a Phase I/II trial in patients with non-Hodgkin's lymphoma (NHL), a step toward an eventual filing of a biologics license application for the candidate by year’s end.

 Juno, on the other hand, acknowledged in a July regulatory filing that four patients died in trials related to its CAR T-cell candidates. Three of the deaths occurred the Phase II ROCKET trial of its acute lymphoblastic leukemia (ALL) candidate JCAR015, and the other during a trial of JCAR014, designed to treat patients with ALL as well as NHL and relapsed or refractory (r/r) chronic lymphocytic leukemia.

“Due to Juno’s stumble, Kite is poised to be the first CAR-T competitor to the market, potentially years in front of its next competitor, which will allow them to become the [Gilead Sciences] of this particular aggressive new oncology market,” Ken Kam of Marketocracy wrote July 20 in Forbes, drawing an analogy to Gilead’s successful development of groundbreaking hepatitis C treatments.

Two months later, another Marketocracy analyst, Todd Hagopian, said bluebird bio as well as Kite could bring CAR T-cell treatments to market quickly, before adding: “I believe that the CAR-T market is going to be huge in the future, and Kite will be the first-mover in the segment.” That could make Kite an attractive acquisition for Gilead, Hagopian added.

Todd Campbell of E.B. Capital Markets opined in The Motley Fool that Kite could find itself choosing between multiple suitors: “Given the potential for an accelerated timeline to market in a multibillion dollar indication, Kite Pharma could be attractive to a number of larger companies.” 


Tesaro has been at or near the top of investors’ takeover target lists since announcing on June 29 that its Phase III NOVA trial of its oral, once-daily poly(ADP-ribose) polymerase (PARP) inhibitor niraparib met its endpoints of progression-free survival (PFS) in patients with ovarian cancer. The median PFS for patients treated with niraparib was 21.0 months, compared to 5.5 months for placebo.

Those results caused Tesaro shares to more than double in value, as Wall Street watchers concluded that the company was a leader in PARP inhibitors (PARPi). However, the category includes competition. AstraZeneca already has a PARPi on the market, the ovarian cancer drug Lynparza® (olaparib), while Clovis Oncology in August won FDA’s acceptance for review of its NDA for its ovarian cancer candidate rucaparib.

Tesaro has been cited as a possible acquisition target for several biopharma giants, including Amgen, Celgene, Pfizer, and Gilead Sciences. Speculation about Gilead was enhanced after Gabelli & Co. analyst Jing He wrote in a note to investors: “Although a PARPi deal would not move the needle for Gilead, we expect the company to be more active in growing its pipeline with deals in the second half.”

A team of Baird analysts offered another reason why Tesaro has sparked takeover interest. Its pipeline, which includes the Phase I/II anaplastic lymphoma kinase inhibitor TSR-011, and rolapitant, a Phase I neurokinin-1 receptor antagonist designed to prevent chemotherapy-induced nausea and vomiting.


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