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Which stocks in the fund could be M&A targets and why?

It’s hard to single out any one stock. Any of the more established biotechs like Telix or Neuren, those with assets in late-stage development such as Botanix and Dimerix, or those with exciting and compelling early-stage data like Clarity, Immutep, PYC Therapeutics, Arovella or Argenica.Immutep is an obvious target for Merck if they can successfully navigate their phase three trial. Keytruda contributed 42 per cent of Merck’s overall revenue in 2023 and is fast approaching a patent cliff in 2028. Merck is driven to maintain an 80 per cent market share in the treatment of non-small cell lung cancer and Efti provides them the best avenue to do this.This is an incredibly exciting period for the Australian biotech sector and a lot is going to happen over the next 12 months. We have seen some strong performance following a year in the US in which 2023 saw record levels of capital raised in the sector and record-setting new product registrations, but it is still only the early stages of a new bull market.