- Chardan analyst Gbola Amusa maintained a Neutral on Spark and lifted the price target from $60 to $114.50.
- Credit Suisse analyst Martin Auster maintained a Neutral rating and $47 price target.
Chardan: Uniqure Could Be Next M&A Target
The $4.3-billion deal Roche stitched up with Spark follows Novartis AG (NYSE: NVS)'s $8.7-billion acquisition of another AAV-based gene therapy company, AveXis, at a 72-percent premium to the 30-day volume-weighted average stock price, Chardan's Amusa said in a Monday note.
The analyst said he is leaving open his still-alpha generative long-Uniqure NV (NASDAQ: QURE)/short Spark trade, which was opened Nov. 7, 2016.
The Roche-Spark news supports Amusa's M&A thesis on Uniqure, which is rated a Buy and was named Chardan's top pick for 2019, the analyst said. The expectation is predicated on the following factors, he said:
Now that AveXis and Spark have been acquired, Uniqure is the only public company left with an AAV-based gene therapy asset, which has both Breakthrough Therapy and PRIME designations.
Uniqure has the potential to be the market leader in hemophilia B with AMT-061, as it could be of high interest to big biopharma companies.
The low market cap of Uniqure relative to Spark and AveXis before their respective M&A announcements renders it attractive.
Credit Suisse: Big Pharma Views Hemophilia As Significant Value Driver
The deal value offered for Spark implies the "re-emergence of Spark's hemophilia A gene therapy program with a competitive profile and substantial value assigned to additional pipeline programs, such as SPK-3006 for Pompe, and the technology platform," Credit Suisse's Auster said in a note.
The analyst said he expects the deal to strengthen Roche's position in the hemophilia space, which it has recently identified as a significant growth driver.
Credit Suisse sees the deal as likely to increase M&A interest among other gene therapy names in its coverage universe, including BioMarin Pharmaceutical Inc. (NASDAQ: BMRN), Sarepta Therapeutics Inc (NASDAQ: SRPT), PTC Therapeutics, Inc. (NASDAQ: PTCT), Ultragenyx Pharmaceutical Inc (NASDAQ: RARE) and Solid Biosciences Inc (NASDAQ: SLDB).
Among these, the firm views Sarepta as the most likely M&A candidate, given its $10-billion market cap; the deepest gene therapy pipelines in the industry; emerging large-scale manufacturing capacity; and first-mover position with its DMD gene therapy lead program.
The M&A interest in hemophilia-based gene therapy bodes well for BioMarin's risk-reward, with a Phase 2 data readout for its valrox hemophilia A candidate due in the second quarter of 2019, Auster said.
"We believe valrox currently holds a first-mover position among Hem A gene therapies in development with a 1.5-year-plus potential lead to market."
The Price Action
At last check Monday:
- Spark shares were soaring 120.19 percent to $113.53.
- Uniqure was jumping 31.4 percent to $54.66.
- Sarepta was advancing 2.44 percent to $143.40.
- BioMarin shares were rallying 4.31 percent to $91.66.
- Solid Biosciences was gaining 8.7 percent to $9.74.
- PTC shares were moving up 1.49 percent to $33.43.
- Ultragenyx was surging 6.07 percent to $63.45.
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|Feb 2019||Bernstein||Downgrades||Outperform||Market Perform|
|Feb 2019||BMO Capital||Maintains||Market Perform||Market Perform|
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