Replies to post #190921 on Biotech Values

[masterlongevity]

icpt is clear for #4

[ghmm]

GILD (possible acquisitions):

They seem to have an interest in lung diseases with a few private company acquisitions of late and though it wasn't their best deal Myogen a while back.

UTHR and Actelion always get mentioned a lot probably because they are mature and perhaps nearing peak sales (but I've thought that for a while).

It seems to me GILD likes to acquire earlier (I believe a few of the private companies were still P2 assets). Along those lines as a dark horse speculation I wonder if they would consider a company like FGEN which could bring them into a few bigger areas though not the near term revenue potential.

[ciotera]

considering what to buy

Out of that list, my bet would be on number 6 (Hem/Onc) or 7 (Cardio) and if I were them, I would acquire someone with strong international presence (which GILD lacks), maybe an EU-based company. And I would make it large enough to matter. But obviously this would be a big change in their M&A philosophy.

[marthambles]

Possibly Corbus in the lung area.

[mr_o]

6. Hem/Onc

TGTX would potentially be a good fit. GILD could then market tgtx's PI3K as a next gen idelalisib.

[willyw]

What should GILD buy?

2. HCV - ditto, unless they have some hidden need I don't know about

So that leaves:

3. HBV
4. Other anti-viral
5. NASH
6. Hem/onc

So the sweet spot for me would be 3-6 above.

I'm not very knowledgeable about things other than HCV, but before I diversified too much, I would make sure that I had a lock on HCV. As it sits today, GILD has a *near* lock on the market. All they need to do is a few simple things to make sure that no one else wants to venture into HCV and lose money trying to compete w/ GILD.

It appears that BMY is no longer a large player and will likely cease to be one in a few years (unless they add to their program).
MRK does not pose a substantial threat to GILD it appears (or has kept it well hidden at the very least).

BUT...if the loose components of best or near best in class compounds could be combined, they could give GILD a run for the money. GILD may currently have the best nuke, but it doesn't appear to have the best other complimentary compounds, such as a best in class PI or NS5A.

Imagine holding 3 aces instead of just just one. Even one more best in class might assure that success.

And lets turn it around. What if I wanted to compete with GILD? What would I need? Abbvie might need a nuke to add to their 2nd gen regimen, and then the game would be on.

IF the Alios nukes turned out to be good, then a superior PI and NS5A would be important. So in game theory..... GILD might purchase a compound, not only to add to their arsenal, but to prevent it's purchase by another.



Just to add to this line of thought..... ENTA is presenting tomorrow and has it's Q1 ER tomorrow morning.

We don't know much about ENTA's NS5A, or their nuke, or their cyclophillin inhibitor, but any of these could be a worthy addition and would also prevent further collaboration with ABBV.
IF any of these were best in class they could be an interesting acquisition, as well as some salt in the wound for their competitor. : )

Having said that, it may be that ENTA may not be for sale, but if they were to have a best in class, or two best in class.... it would potentially be a valuable acquisition, for a number of reasons. And if it were so, that they didn't want to be acquired, might they enter into a joint agreement, such as they did w/ Novartis or ABBV? I'm not up to speed on the politics or PCness of this, but the economics might be persuasive.

If it so happened that ENTA's NASH program showed promise, this would be one more reason this might be a worthy acquisition.
Based on ENTA current share price, it would also be a bargain.

In these reasons, it might be a far better deal than Vertex.

Yes, this same logic might also apply towards ACHN, but I do not think it has a best in class nuke, but it has a very good NS5A (although, perhaps not best in class).
~W

[mcbio]

So that leaves:

3. HBV

4. Other anti-viral

5. NASH

6. Hem/onc

7. Cardiovascular - that seems a bit dubious

8. Other (inflammation etc.)

So the sweet spot for me would be 3-6 above.

I'd nominate Chimerix in 4.

Any other ideas from people here?

Hey, why not TRIL for 6? I can dream right? Haha. I'll nominate MGNX for that spot as well (though MGNX does have many partners, GILD is one of them). For all they offer and novelty of programs/platform, I don't find MGNX all that expensive (and, not surprisingly, I'm very much long).

[vinmantoo]

Peter, I agree that HBV would be a great opportunity. Does you are anyone else know what companies have anti-HBV drugs in trials?