Attractive M&A options? Analysts break down what's hot right...

Attractive M&A options? Analysts break down what's hot right nowZachary BrennanSenior EditorWith the number of biopharma acquisitions in 2022 so far falling below recent years, the investment bank SVB Securities on Sunday published a new report on M&A and where there may be some action in the near term.As far as the acquirers, the report notes that large biopharma companies’ execs have a “broad appetite for M&A and BD,” and companies like Pfizer and Johnson & Johnson are both carrying cash balances of about $33 billion each as of June 30, while other companies like Novartis with $20 billion, and Bristol Myers Squibb with $13 billion, can take the lead.Others, however, may struggle with lost exclusivities later this decade, and look to offset those losses with up-and-comers.advertisementadvertisement“Based upon our forecasts, we note low 2021-30 sales growth rates for JNJ (1%), ABBV (1%), AMGN (-1%), GILD (1%), and REGN (0%), with many companies facing key losses of exclusivity mid-late decade,” the SVB Securities report says, adding that companies may be wary of the Federal Trade Commission’s recent pledge to crack down on pharma mergers, which could potentially stop any huge deals:We expect large-cap biopharma to largely build upon their core therapeutic areas, and we anticipate companies could utilize both M&A and collaborative partnerships to supplement their portfolios. But with M&A, it is difficult to predict individual companies’ future actions because targets need to be willing to sell, and it is a highly competitive market. We note that partnerships can be very successful (e.g., ABBV and GMAB, SAN FP and REGN) and in some cases, these can be precursors to future acquisitions (PFE and Biohaven).Pfizer’s Covid-19 vaccine partner BioNTech is another company that, while indicating they want to invest internally to develop an immuno-oncology pipeline, “could be a major acquirer” thanks to its “impressive cash reserve.”As far as attractive acquisition targets, the report points to rare disease companies, which “have historically been a hot spot for M&A,” and SVB Securities said it believes “this trend is poised to continue with both platform- and product-based names approaching key de-risking catalysts.”For instance, an FDA approval for BioMarin’s hemophilia A gene therapy Roctavian, following a recent EMA thumbs-up, could make it a likely target, especially with the company’s state-of-the-art manufacturing facility, the report says. Analysts also point to Denmark-based Ascendis Pharma, and its platform “that could improve the PK/PD of a plethora of agents,” as well as New Jersey-based Insmed and its “rare pulmonary expertise.”Sarepta Therapeutics and its DMD exon skipper portfolio “continues to see meaningful sales growth,” and the analysts said they “expect interest in the name to pick up in light of the recent BLA filing for accelerated approval of their DMD micro-dystrophin GTx SRP-9001.” That would be the company’s fourth accelerated approval filing.By the end of October, Amicus Therapeutics will also see an up-or-down decision from FDA on its AT-GAA, an investigational two-component therapy for the rare Pompe disease, and which SVB Securities thinks will be approved eventually, particularly once a China-based manufacturing facility can be inspected by the FDA.