Biotechs got a shot in the arm on Monday, with $1+ billion acquisitions of 2015 and 2017 IPOs.
Gene therapy biotech Spark Therapeutics spiked 120% on Monday after announcing that it would be acquired by Roche for about $4.8 billion. Its stock closed above $113, a 393% premium to its January 2015 offer price. Spun out of the Children's Hospital of Philadelphia with backing from Sofinnova, Spark is developing a gene therapy cure for rare diseases.
Ultra-rare bone disease biotech Clementia Pharmaceuticals (CMTA) soared 74% on Monday after French pharma Ipsen said it would acquire the firm for $1.3 billion. It closed at about $26; the stock had previously been trading near its August 2017 offer price of $15. Backed by OrbiMed, BDC Capital, and NEA, Clementia is developing an oral small molecule therapy that it acquired from Roche in 2013.
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A number of gene therapy IPOs jumped on Monday following the Roche-Spark news, including 2018's AVROBIO (AVRO; +22%) and Homology Medicines (FIXX; +11%), 2017's Nightstar Therapeutics (NITE; +12%), 2016's Audentes Therapeutics (+11%) 2015's REGENXBIO (+16%), and 2014's uniQure (+34%). 2016 gene editing biotech CRISPR Therapeutics also surged 25%.
Including a few mega-mergers, the space has experienced a wave of consolidation in the past few years, as large pharmaceuticals seek revenue growth from outside sources. These pharmas may be attempting to de-risk drug development by partnering with, investing in, and acquiring clinical-stage biotechs developing promising drug candidates. That makes biotech IPOs prime acquisition candidates. Gene therapy has been an area of especially high interest, notably Novartis' acquisition of 2016 biotech IPO AveXis for $8.7 billion.
