Analyst thinks this drugmaker could be next after Alpine’s $4.9B acquisition

Shares of this drugmaker are on the rise after Alpine Immune Sciences (ALPN), whose lead candidate is similar to the former’s, said it would be acquired by Vertex Pharmaceuticals (VRTX). In a research note post-deal, Evercore ISI noted that with Alpine off the market, Vera Therapeutics (VERA) is now “the only free-standing B cell modulator in the IgAN space and it’s trading at just $2B in value.”

ALPINE ACQUISITION: Vertex Pharmaceuticals and Alpine Immune Sciences announced that the companies have entered into a definitive agreement under which Vertex will acquire Alpine for $65 per share or approximately $4.9B in cash. The transaction was unanimously approved by both the Vertex and Alpine Boards of Directors and is anticipated to close later this quarter.

Under the terms of the merger agreement, Vertex will acquire Alpine for $65 per share in cash, for a total equity value of approximately $4.9B, or approximately $4.6B net of estimated cash acquired. A subsidiary of Vertex will commence a cash tender offer to purchase all outstanding shares of Alpine common stock. The transaction is expected to close in the second quarter of 2024, subject to certain conditions, including the tender of a majority of the outstanding shares of Alpine common stock and the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and other customary conditions.

Alongside the deal announcement, Alpine shared updated clinical data for povetacicept in IgA nephropathy, which will be presented as a late breaking poster at the World Congress of Nephrology April 13-16 in Buenos Aires, Argentina. The company said that as of March 01, 41 patients with IgAN had received povetacicept 80 or 240 mg subcutaneously every 4 weeks. Treatment with povetacicept 80 mg SC Q4W has been associated with a clinically meaningful improvement in proteinuria, with a 64.1% reduction from baseline in urine protein to creatinine ratio at 36 weeks, associated with stable renal function as assessed by estimated glomerular filtration rate.

At this same time, 4/6 had achieved remission, as defined as UPCR less than 0.5 g/g, greater than or equal to 50% reduction in UPCR from baseline, and stable renal function. Resolution of hematuria, as defined as negative or trace/small hematuria in patients with non-negative/trace hematuria at baseline, was achieved in all patients with data available at 36 or more weeks. Treatment with povetacicept 240 mg SC Q4W has been associated with similar improvements in proteinuria, stable renal function, and remission, based on initial data through 12 and 24 weeks. Treatment with both doses was associated with significant reductions in the key disease-related biomarker Gd-IgA1, with the 80 mg dose achieving a 68.9% reduction at 40 weeks, and the 240 mg dose achieving a 78.6% reduction at 20 weeks. Both doses achieved reductions in IgA/C3 and Gd-IgA1/C3 ratios, which are additional severity and prognostic biomarkers in IgAN. Both doses have been well tolerated in IgAN, with no instances of IgG less than 3 g/L and no severe infections.

DEAL LIKELY TO CLOSE: Following the news, several Wall Street firms downgraded Alpine Immune Sciences to Neutral-equivalent ratings, including H.C. Wainwright, Wedbush, Wolfe Research, and RBC Capital. The latter noted that with no pipeline overlapping, there is a high likelihood of the deal closing.

Meanwhile, Morgan Stanley cut Alpine Immune Sciences’ rating to Equal Weight from Overweight with a price target of $65, up from $47. The firm said that in addition to announcing the deal, Alpine shared updated 36-week data from the ongoing Phase 1b/2a RUBY-3 study of povetacicept in IgA Nephropathy, or IgAN, which it believes further confirms povetacicept’s potential best-in-class profile in IgAN with a convenient once monthly dosing profile.

SOLID ACQUISITION: More bullish on  Vertex Pharmaceuticals, Evercore ISI upgraded the stock to Outperform from In Line with a $438 price target after the “surprise move” to acquire Alpine Immune Sciences for $65 per share or $4.9B in cash. The firm thinks this is “a solid acquisition” aligned with Vertex’s emerging footprint in nephrology following advancement of inaxaplin in AMKD and VX-407 in ADPKD.

VERA SEEN BOOSTED BY NEWS: After Alpine Immune Sciences and Vertex Pharmaceuticals announced that the companies have entered into a definitive agreement under which Vertex will acquire Alpine for $65 per share, or $4.9B in cash, Evercore ISI noted that Alpine is transitioning to Phase 3 development later this year for povetacicept in IgAN. The B cell modulator space within IgAN is “hot,” with Alpine marking the second acquisition in the class in the last 10 months, adds the firm, which sees Alpine trailing Otsuka, Vera Therapeutics (VERA) and Novartis (NVS), who are already in Phase 3, by about one to two years.

With Alpine now off the market, Vera is now “the only free-standing B cell modulator in the IgAN space and it’s trading at just $2B in value,” says Evercore. The firm expects Vera will trade up on the Alpine acquisition news. Evercore has an Outperform rating and $50 price target on Vera shares.

PRICE ACTION: In morning trading, shares of Alpine have jumped about 37% to $64.28, while Vertex’s stock has advanced almost 1% to $401.50. Shares of Vera Therapeutics have also gained about 3% to $42.83.