Business Corpus: AveXis Pops 80% On Novartis Buyout As Celgene Rumored To Eye OthersBuyout and partnership news sent biotechs flying on Monday as Novartis bid $8.7 billion to take out AveXis, rumors emerged Celgene could swipe Agios and Ionis partnered with AstraZeneca in liver disease. The post AveXis Pops 80% On Novartis Buyout As Celgene Rumored To Eye Others appeared first on Investor's Business Daily.

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Buyout and partnership news sent biotechs flying on Monday as Novartis (NVS) bid $8.7 billion to take out AveXis (AVXS), rumors emerged that Celgene (CELG) could swipe Agios Pharmaceuticals (AGIO), and Ionis Pharmaceuticals (IONS) partnered with AstraZeneca (AZN) to make a liver disease treatment.

At the close on the stock market today, AveXis rocketed 81.6%, at 210.46, easily hitting its highest point since going public in February 2016. Novartis lifted 1.1%, to 81.07. Agios surged 9.3%, to 80. Celgene was flat, at 86.94, though it was up more than 1% after hours.

Meanwhile, Dow Jones stock Merck (MRK) popped 5.3% to end the regular session at 56.18, on data showing its drug Keytruda improved overall survival as a first treatment option for some lung cancer patients. Key rival Bristol-Myers Squibb (BMY) dipped on the news.

And Acadia Pharmaceuticals (ACAD) hit its lowest closure point since June 2013 on a CNN story detailing deaths in patients taking its only approved drug, Nuplazid. Nuplazid treats psychosis in patients with Parkinson's disease, and is being tested in an array of other conditions.

Novartis To Buy AveXis

Novartis agreed to pay $218 per share of AveXis in an offer that represents an 88% premium to where AveXis closed on Friday. The deal is a 72% premium to AveXis' 30-day volume-weighted average stock price, AveXis said in a news release.

AveXis is developing AVXS-101, a gene therapy treatment for spinal muscular atrophy diagnosed in young children. The drug would rival Biogen (BIIB) and Ionis' Spinraza, which is already approved to treat the condition. Biogen stock, though, fell a fraction, to 257.52, though rose 1% in extended trading.

RBC analyst Brian Abrahams credited the deal for "breathing life into (the) sector," in a note. The biotech group has been under pressure recently. Shares sank to as much as a two-month low on Friday, but collectively advanced 3.2% on Monday.

This "could be the (mergers and acquisitions) kick-start that the sector has awaited in our view," he said. "There has been anticipation, but no major deal and trepidation on drug pricing and risk-highlighting negative catalysts (have kept) sentiment down of late."

The transaction is expected to close midyear. The price will go up to $225 per share of AveXis stock if Novartis decides to extend the close date to Oct. 6. If AveXis terminates the deal, it will owe Novartis a $284 million fee. If Novartis terminates the deal, it owes AveXis $437 million.

PTC Therapeutics (PTCT) jumped 1.9%, to 26.18, on the news. PTC is in the early stages of making a treatment for spinal muscular atrophy, alongside Roche (RHHBY).

"While this asset remains early, it has shown early positive signals, and we could see increased attention today given the value that Big Pharma is clearly willing to place on SMA assets once they are further de-risked," RBC's Abrahams said.

Merck Surges On Keytruda

Immuno-oncology drug Keytruda significantly outperformed chemotherapy in patients with advanced lung cancer, Merck said in a news release. The study, dubbed Keynote-042, tested Keytruda as a single drug vs. chemo in patients who have the PD-L1 protein in at least 1% of their tumor cells.

The study examined overall survival. Interim analysis shows Keytruda kept patients alive longer than chemotherapy as lone treatments. Safety was in line with earlier studies. Merck will now continue the study to determine Keytruda's impact on progression-free survival.

Patients who have PD-L1 protein in 1%-49% of their tumors represent 10%-15% of the overall market in lung cancer, Evercore analyst Umer Raffat said in a note. Bristol's rival drug, Opdivo, failed to improve progression-free survival in patients with PD-L1 in at least 5% of their tumors, he noted.

Bristol shares touched an eight-month low in intraday trading on the news but recovered somewhat and closed down 0.7%, at 60.48.

AbbVie Spikes On Arthritis News

AbbVie (ABBV) ran up 0.8%, to 90.48, and rose another 1.2% after hours, after its investigational drug upadacitinib beat its own blockbuster Humira in a study of rheumatoid arthritis patients.

Patients received either 15 milligrams of upadacitinib daily, 40 milligrams of Humira every other week, or a placebo. AbbVie examined patients at week 12 for at least a 20% improvement in rheumatoid arthritis symptoms and clinical remission.

The study showed 71% of upadacitinib patients experienced a 20% improvement in symptoms vs. 63% and 36% of Humira and placebo patients, respectively. Of upadacitinib patients, 29% were in clinical remission vs. 18% and 6% of Humira and placebo patients.

"We are excited by these strong results, which add to the body of evidence that support the potential of upadacitinib to be an important treatment option for patients with rheumatoid arthritis," AbbVie spokesperson Michael Severino said in a prepared statement.

Another Buyout For Celgene?

Rumors emerged that Celgene could be eyeing takeovers of Agios or Jounce Therapeutics (JNCE). Agios popped and Jounce surged 7%, to 19.78. A buyout would follow Celgene's recent acquisition of Juno Therapeutics, a cancer biotech.

The report emerged from the Financial Times, which cited unnamed sources. Celgene is reportedly "hunting for acquisition targets with promising drugs" to offset the loss of patent protection for its key blockbuster, Revlimid.

Celgene already partners with Agios and Jounce, both of which are working on cancer drugs. Agios has a market cap of $4.6 billion, eclipsing Jounce's market cap, which remains under $1 billion. Jounce went public last year.

In similar news, Ionis and AstraZeneca announced a partnership to develop a drug to treat nonalcoholic steatohepatitis. Under the terms of the deal, AstraZeneca will pay Ionis a $30 million license fee to take over responsibility for the development and commercialization of the drug.

As the drug advances, Ionis is also eligible to receive up to $300 million in additional development and regulatory milestone payments, as well as tiered royalties up to the low teens on sales of the drug.

Ionis stock advanced 2.3%, to 41.61, as AstraZeneca lifted 1.4%, to 35.90, at the close.

Menlo Dives On Eczema Study

Menlo Therapeutics (MNLO) and Acadia were among the biggest biotech stock losers on Monday. Shares of Menlo tanked 76.8%, falling to 8.17, just three months after going public. The stock had been forming a cup with handle with a 38.92 buy point. Shares rose 2% after hours.

The tumble followed news on Sunday that Menlo's itching drug failed in an eczema study. Menlo found no statistically significant differences between its drug, serlopitant, and a placebo. Chief Executive Steve Basta noted there were still signs of improvement for serlopitant-treated patients.

Serlopitant is also being tested in another skin condition known as prurigo nodularis, itching associated with psoriasis and chronic cough. The setback in eczema doesn't necessarily hurt Menlo's chances for serlopitant in prurigo nodularis, Piper Jaffray analyst David Amsellem said in a note.

"After all, prurigo nodularis is an altogether different condition," he said. "The larger point here is that Menlo decided to run a broad clinical program in (itching) in order to have a handful of potential pathways to market for serlopitant."

Amsellem kept his overweight rating on Menlo.

Acadia Tumbles On Drug Woes

Meanwhile, Acadia dived 23.4%, to 16.50, on a CNN story outlining deaths in Parkinson's patients who took Nuplazid for psychosis.

Nuplazid was approved in 2016 to treat hallucinations and delusions associated with Parkinson's. After its approval, patients continued to experience hallucinations and side effects including death, life-threatening incidents, falls, insomnia, nausea and fatigue, CNN wrote.

Since its approval, more than 700 patients on Nuplazid have died. As of last June, Nuplazid was the only medicine listed as "suspect" in at least 500 death reports. Acadia, though, notes that two studies have shown no difference in the number of deaths reported between Nuplazid and a placebo.

The drug is Acadia's only approved medicine. Acadia is testing Nuplazid in dementia-related psychosis, schizophrenia and depression.

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