Argenx (NASDAQ:ARGX) Blueprint Medicines (NASDAQ:BPMC) and Sarepta Therapeutics (NASDAQ:SRPT) are likely takeover targets in the biotech sector, according to a Wedbush analyst.
Year-to-date there have been over $70 billion announced acquisitions in the biotech space and for the entire year last year there was just just under $70 billion in deals announced, according to Wedbush analyst David Nierengarten.
"I think this really points to a bottom for the small/midcap sector," Nierengarten said in an interview with CNBC on Monday. "Obviously it's an attractive valuation for acquirers at this point. "I think the acquisitions will continue. They have been robust year-to-date and I think they should continue for the rest of the year."
Nierengarten sees Dutch biotech Argenx (ARGX) as a likely takeover target due to the success of its drug Vyvgart, which is therapy for neuromuscular disease myasthenia gravis.
"It has has a great launch so far," Nierengarten explained. "It did $400 million last year and we think it can do over $1 billion this year. An importantly they have multiple clinical trials set up to expand the indication beyond myasthenia gravis."
Argenx has a key data point for a disease called CIDP in July, according to Nierengarten.
The Wedbush analyst's comments came before a Bloomberg story on Tuesday indicated several drugmakers have been studying the Dutch biotech company and have it on top of their wish lists. Argenx (ARGX) is working with JPMorgan to look at its options in the event of a takeover bid for the $23 billion company. Interest for the company is expected to increase after the July data is released.
Blueprint Medicines (BPMC) is an another potential takeover candidate and it has a commercial drug called Ayvakit, according to Nierengarten. The company has an important PDUFA date for expanding the indication for the drug on Wednesday. Blueprint has a market cap of $3.3 billion.
Sarepta Therapeutics (SRPT) is another potential takeover target after an FDA advisory committee backed the agency’s accelerated approval for SRP-9001 targeted at certain patients with Duchenne muscular dystrophy. The shares surged more than 30% on the news on Monday. The FDA is set to make a final decision on SRP-9001 at its AdCom meeting on May 29. Sarepta has a market cap of $13.9 billion.
"I think that would help not only the gene therapy sector, but also put Sarepta probably in, again, the target for an acquisition from a larger pharma," Nierengarten said.