Immatics NV (IMTX)

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IMTX: S/A Article of Interest:

https://seekingalpha.com/news/4077812-patent-cliffs-could-fuel-increased-ma-in-oncology-this-year-cantor-says

Cantor sees strong year ahead for oncology M&A
Mar. 10, 2024 12:08 PM ETKura Oncology, Inc. (KURA) Stock, BCYC Stock, IMCR Stock, ALXO Stock, CGON StockJNJ, NVS, BMY, PFE, MRK, EXEL, GERN, FUSN, VSTM, KPTI, SNDX, MRUS, URGN, DCPH, MOR, ARVN, HARP, IDYA, SWTX, RVMD, ORIC, ZNTL, LEGN, RLAY, IMTX, PMVP, OLMA, DAWN, JANX, AMAM, ERAS, NUVLBy: Val Brickates Kennedy, SA News Editor9 Comments
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Cantor Fitzgerald sees another strong year ahead for oncology M&A, with companies focused on antibody drug conjugates, radiopharmaceuticals and T-cell engagers expected to attract increased attention from major drugmakers looking to replenish pipelines.

Impending patent cliffs will be a big motivator for deals. According to Cantor, around $182B in revenue is at risk over the next four years due to patent expirations, with oncology products accounting for 42% of that number.

Several of the industry's biggest are set to lose patent protection by 2029, including Bristol Myers (BMY) Yervoy, Pomalyst and Opdivo; Johnson & Johnson’s (JNJ) Imbruvica; Merck’s (MRK) Keytruda; Pfizer’s (PFE) Ibrance; and Roche’s (OTCQX:RHHBY) Perjeta, according to Cantor.

Meanwhile, the global market for oncology drugs is expected to grow from $180B in 2022 to $323B in 2028, a rate that is “unparalleled to other therapeutics areas,” Cantor said. In comparison, the global biopharmaceutical market is expected to swell from $978B in 2022 to $1.39T in 2028.

Cantor estimates the industry should see between five and 17 acquisition deals this year, noting that three have already been announced to date: J&J/Ambrx (AMAM), Merck/Harpoon (HARP), and Novartis (NVS)/Morphosys (MOR).

The investment bank also pointed out that the pool of potential buyers is fairly deep as pretty much every major drugmaker has a presence in oncology, with Novo Nordisk (NVO) being a notable exception.

So what type of assets will Big Pharma be seeking out?

Cantor still sees a preference for de-risked assets but noted that proof-of-concept data for oncology drugs can often be achieved in Phase 1/2 testing. Drug candidates addressing larger markets, such as breast, lung or colorectal cancer, should be particularly attractive to potential buyers.

While small molecule candidates will probably account for around 50% of the deals, Cantor says complex biologics have been gaining in popularity. The bank sees assets such as antibody drug conjugates, radiopharmaceuticals and T-cell engagers as being particularly attractive acquisition targets this year, while synthetic lethality and TCR therapies could also see increased interest.

Cantor sees several companies in its coverage universe as potentially attracting suitors this year, including Kura (NASDAQ:KURA), Bicycle (NASDAQ:BCYC), Immunocore (NASDAQ:IMCR), ALX Oncology (NASDAQ:ALXO), Arvinas (ARVN), Immatics (IMTX), Verastem (VSTM), Oric (ORIC), and CG Oncology (NASDAQ:CGON).

Potential targets outside of its coverage include Day One (DAWN), Deciphera (DCPH), Erasca (ERAS), Exelixis (EXEL), Fusion (FUSN), Geron (GERN), Ideaya (IDYA), Karyopharm (KPTI), Janux (JANX), Legend Biotech (LEGN), Merus (MRUS), Nuvalent (NUVL), Olmea (OLMA), PMV (PMVP), Relay Therapeutics(RLAY), Revolution Medicines (RVMD), Syndax (SNDX), SpringWorks Therapeutics (SWTX), UroGen (URGN), and Zentalis (ZNTL).